10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number 0-33407

APP PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Delaware	30-0431736
(State of Incorporation)	(I.R.S. Employer Identification No.)
1501 East Woodfield Road, Suite 300 East Schaumburg, IL 60173-5837	(847) 969-2700
(Address of principal executive offices, including zip code)	(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, par value $0.001 per share	The NASDAQ Stock Market LLC
(Title of Class)	(Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated filer  x Accelerated Filer  ¨ Non-Accelerated Filer  ¨

Indicate by check mark whether the registrant is a shell company (as determined by rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of June 29, 2007 (the last business day of the registrant’s most recently completed second quarter), the aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $593.6 million or $317.2 million, based on the adjusted Nasdaq closing price of $11.88 per common share on that date, as adjusted for the spin-off described herein. The registrant has no non-voting common stock.

As of March 3, 2008, the registrant had 160,091,099 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the registrant’s 2008 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K.

APP Pharmaceuticals Inc.

FORM 10-K

For the Year Ended December 31, 2007

TABLE OF CONTENTS

		Page
	PART I
Item 1.	Business	1
Item 1A.	Risk Factors	12
Item 1B.	Unresolved Staff Comments	25
Item 2.	Properties	26
Item 3.	Legal Proceedings	26
Item 4.	Submission of Matters to a Vote of Security Holders	27
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	28
Item 6.	Selected Financial Data	29
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	44
Item 8.	Financial Statements and Supplementary Data	45
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	83
Item 9A.	Controls and Procedures	83
Item 9B.	Other Information	84
PART III
Item 10.	Directors, Executive Officers of the Registrant and Corporate Governance	86
Item 11.	Executive Compensation	86
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	86
Item 13.	Certain Relationships and Related Transactions and Director Independence	86
Item 14.	Principal Accountant Fees and Services	86
PART IV
Item 15.	Exhibits and Financial Statement Schedule	86
	Signatures	88

PART I

Item 1. BUSINESS

Unless the context otherwise requires, references in this report to “New APP,” “APP Pharmaceuticals,” “we,” “us” and “our” refer to APP Pharmaceuticals, Inc. and its subsidiaries, including our operating subsidiary APP Pharmaceuticals, LLC (which we refer to as New APP, LLC in this information statement), references to “Old Abraxis” refer to Abraxis BioScience, Inc. prior to the separation and related transactions, references to “New Abraxis” refer to New Abraxis Inc., which was our wholly owned subsidiary prior to the separation and which changed its name to Abraxis BioSciences, Inc. following the separation, and references to the “distribution,” “separation” or “spin-off” refer to the transactions in which the proprietary business was separated from Old Abraxis and New Abraxis became an independent publicly-traded company.

Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K and other documents we file with the Securities and Exchange Commission contain forward-looking statements, as the term is defined in the Private Securities Litigation Reform Act of 1995. In addition, we may make forward-looking statements in press releases or written statements, or in our communications and discussion with investors and analysts in the normal course of business through meetings, webcasts, phone calls and conference calls. Such forward-looking statements, whether expressed or implied, are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated, due to a number of factors, many of which are beyond our control, which include, but are not limited to:

• the market adoption of and demand for our existing and new pharmaceutical products;

• our ability to maintain and/or improve sales and earnings performance;

• the ability to successfully manufacture products in an efficient, time-sensitive and cost effective manner;

• our ability to service our debt;

• the impact on our products and revenues of patents and other proprietary rights licensed or owned by us, our competitors and other third parties;

• our ability, and that of our suppliers, to comply with laws, regulations and standards, and the application and interpretation of those laws, regulations and standards, that govern or affect the pharmaceutical industry, the non-compliance with which may delay or prevent the sale of our products;

• the difficulty in predicting the timing or outcome of product development efforts and regulatory approvals;

• the availability and price of acceptable raw materials and components from third-party suppliers;

• evolution of the fee-for-service arrangements being adopted by our major wholesale customers;

• risks inherent in divestitures and spin-offs, including business risks, legal risks and risks associated with the tax and accounting treatment of such transactions;

• inventory reductions or fluctuations in buying patterns by wholesalers or distributors; and

• the impact of recent legislative changes to the governmental reimbursement system.

Forward-looking statements also include the assumptions underlying or relating to any of the foregoing or other such statements. When used in this report, the words “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict” and similar expressions are generally intended to identify forward-looking statements.

1

Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date hereof. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, whether as a result of new information, changes in assumptions, future events or otherwise. Readers should carefully review the factors described in Item 1A: Risk Factors below and other documents we file from time to time with the Securities and Exchange Commission for a more detailed description of the risks and other factors that may affect the forward-looking statements. Readers should understand that it is not possible to predict or identify all such factors. Consequently, readers should not consider any such list to be a complete set of all potential risks or uncertainties.

Overview

We are a fully-integrated pharmaceutical company that develops, manufactures and markets injectable pharmaceutical products. We believe that we are the only independent U.S. public company with a primary focus on the injectable critical care, anti-infective and oncology markets, and we further believe that we offer one of the most comprehensive injectable product portfolios in the pharmaceutical industry. We manufacture products in each of the three basic forms in which injectable products are sold: liquid, powder and lyophilized, or freeze-dried.

Our products are generally used in hospitals, long-term care facilities, alternate care sites and clinics within North America. Unlike the retail pharmacy market for oral products, the injectable pharmaceuticals marketplace is largely made up of end users who have relationships with group purchasing organizations, or GPOs, and/or specialty distributors who distribute products within a particular end-user market, such as oncology clinics. GPOs and specialty distributors generally enter into collective product purchasing agreements with pharmaceutical suppliers in an effort to secure more favorable drug pricing on behalf of their members.

We began in 1996 with an initial focus on U.S. marketing and distribution of generic pharmaceutical products manufactured by others. In June 1998, we acquired Fujisawa USA, Inc.’s generic injectable pharmaceutical business, including manufacturing facilities in Melrose Park, Illinois and Grand Island, New York and a research and development facility in Melrose Park, Illinois. We also acquired additional assets in this transaction, including inventories, plant and equipment and abbreviated new drug applications that were approved by or pending with the FDA.

On April 18, 2006, we completed a merger with American BioScience, Inc., or ABI, our former parent. In connection with the closing of that merger, our certificate of incorporation was amended to change our original name of American Pharmaceutical Partners, Inc. to Abraxis BioScience, Inc. Old Abraxis was operated as two distinct business segments: the proprietary business and the hospital-based business.

On November 13, 2007, Old Abraxis was separated into two independent publicly-traded companies: our company, APP Pharmaceuticals, Inc., which owns and operates the hospital-based business; and the other which owns and operates the proprietary business. We refer to the proprietary business following the separation as “New Abraxis,” which subsequently changed its name to Abraxis BioScience, Inc. We continue to operate the hospital-based business (which we refer to as “New APP” following the separation) under the name APP Pharmaceuticals, Inc. Our common stock is traded and quoted on the NASDAQ Global Market under the symbol “APPX.”

New APP and New Abraxis entered into a series of agreements in connection with the separation, including a separation and distribution agreement, a transition services agreement, an employee matters agreement, a tax allocation agreement, a manufacturing agreement and various real estate leases. Please refer to Note 7—Related Parties for additional information on the separation related agreements. Also, in connection with the separation, we incurred $1 billion of indebtedness and, in addition, entered into a $150 million revolving credit facility. $700 million of the proceeds from this indebtedness was contributed to New Abraxis, approximately $12 million was used to pay fees and expenses related to the debt financing, approximately $276 million of the proceeds was

2

used to repay in full the then existing revolving credit facility and the remainder was retained by New APP. New APP is solely responsible for servicing the debt. Please refer to Item 8—Financial Statements and Supplementary Data Note 3—Spin-off of New Abraxis in the accompanying audited consolidated financial statements for further details.

Our Products

Injectable Oncology Products

We presently manufacture and market 17 injectable oncology products in 38 dosages and formulations. According to IMS Health, Inc., or IMS, a pharmaceutical market research firm, during 2007 we were the market leader for four of these products in terms of units sold in the United States. Net revenue of our injectable oncology products was $55.3 million in 2007 and represented 9 % of total 2007 revenue.

Our oncology products include:

Carboplatin. Carboplatin is indicated for the initial treatment of advanced ovarian carcinoma in combination with other chemotherapeutic agents and for the palliative treatment of recurrent ovarian carcinoma after prior chemotherapy. Carboplatin is the generic equivalent of Bristol-Myers Squibb Company’s Paraplatin^®. We launched the liquid and lyophilized versions of carboplatin in October 2004, and we received approval for the liquid, 600 mg, multi-dose vial form of the product in February 2006.

Doxorubicin. Doxorubicin is indicated for use in adjuvant therapy for the treatment of breast cancer where there is evidence of axillary lymph node involvement following tumor resection. Doxorubicin has been successful in producing regression in disseminated neoplastic conditions, including several types of leukemias, ovarian, breast and bladder cancers as well as Hodgkin’s disease. Doxorubicin is the generic equivalent of Pharmacia & Upjohn Company’s Adriamycin^®. We launched the liquid version of doxorubicin in August 2007.

Fludarabine. Fludarabine is indicated for the treatment of adult patients with B-cell chronic lymphocytic leukemia whose disease is unresponsive, or has progressed, despite treatment with an alkylinating-agent containing regimen. We launched fludarabine in October 2007.

Fluorouracil. Fluorouracil is part of a class of drugs known as “antineoplastics” which are used in the treatment of various cancers to slow or stop the growth of cancer cells. Fluorouracil is indicated for the palliative management of carcinoma of the colon, rectum, breast, stomach and pancreas and is the generic equivalent of Sicor Pharmaceuticals’ Adrucil^®. We launched the fluorouracil in December 1998.

Ifosfamide. Ifosfamide is a chemotherapy drug used to treat germ cell testicular cancer and is often given in combination with Mesna. Bristol-Myers originally marketed ifosfamide under the brand name Ifex^®. In response to customer requests, we were the first to offer individually packaged generic ifosfamide; our lyophilized form eliminated the need for the refrigerated storage required by the previous generic ifosfamide/mesna kit packaging. We launched ifosfamide in July 2002 with 180-day exclusivity.

Mesna. Mesna is a cytoprotectant used to treat the side effects associated with certain chemotherapy drugs. Bristol-Myers originally marketed mesna under the brand name Mesnex^®. Launched in May 2001, we were the first to market a generic version of mesna.

Injectable Anti-Infective Products

We manufacture and market 21 injectable anti-infective products. According to IMS, we were the United States market leader for ten injectable anti-infective products in terms of units or dollars sold during 2007. Our injectable anti-infective products generated net revenues of $193.7 million in 2007 and represented 30% of 2007 total net revenues.

We believe we offer one of the most comprehensive portfolios of injectable anti-infective products, including eleven different classes of antimicrobials. We believe we are the only generic pharmaceutical company

3

that owns and operates a dedicated cephalosporins manufacturing facility in the United States. The FDA requires dedicated facilities for the manufacture of cephalosporins. We believe that we currently offer the broadest portfolio of generic cephalosporins. According to IMS, the 2007 markets for first, second and third generation cephalosporins exceeded $300 million.

Our anti-infective product line includes:

Ampicillin. Ampicillin is a penicillin based antibiotic, which treats various types of infections of the skin, central nervous system, heart, respiratory tract, sinuses, ear and kidney.

Ampicillin and Sulbactam. Ampicillin and Sulbactam is an injectable antibacterial combination consisting of the seminsynthetic antibiotic ampicillin sodium and the beta-lactamase inhibitor sulbactam sodium. Administered intravenously or intramuscular, Ampicillin and Sulbactam is indicated for the treatment of several skin and skin structure, intra-abdominal and gynecological infections due to susceptible strains of microorganisms. Ampicillin and Sulbactam is the generic equivalent of Pfizer Inc.’s Unasyn^®. We launched this product in November 2006.

Azithromycin. Azithromycin is indicated for the treatment of community-acquired pneumonia and pelvic inflammatory disease when caused by susceptible microorganisms. Azithromycin is the generic equivalent of Pfizer Inc.’s Zithromax^®. We launched this product in February 2006.

Cefotetan. Cefotetan is a second-generation cephalosporin with a broad range of anti-microbial activity. Cefotetan is often used for surgical prophylaxis and offers the longest half-life of any cephalopsorin. AstraZeneca marketed the innovator product under the brand name Cefotan^®. We launched cefotetan in September 2007 and are currently the only company to market cefotetan in the United States.

Vancomycin. Vancomycin is an antibiotic used to treat some types of Staph, Strep or other infections, particularly in patients who are allergic to penicillins or cephalosporins. Eli Lilly originally marketed vancomycin under the brand name Vancocin^®.

Injectable Critical Care Products

We manufacture and market more than 60 injectable critical care products, which includes the eight Anesthetic and Analgesics product families we acquired in June 2006. According to IMS, 13 of our critical products held first position and 9 held second position in the United States market in terms of units sold in 2007. Our critical care product line encompasses a wide range of products essential to hospitals and clinics, ranging from diluents, to heart medications, to steroidal products to sedatives. Our injectable critical care products generated net revenues of approximately $382.8 million for the year ended December 31, 2007. Products acquired in June 2006 totaled $180.7 million for the year ending December 31, 2007.

Our critical care products include:

Diprivan^®. Diprivan^® is a patent protected intravenous sedative-hypnotic agent and the first of a new class of intravenous anesthetic agents—the alkylphenols. Diprivan^® is indicated for the induction of general anesthesia in adult and pediatric patients; maintenance of general anesthesia in adult and pediatric patients; and intensive care unit sedation for intubated, mechanically ventilated adults. Zeneca Pharmaceuticals first commercially introduced Diprivan^® in the United States in 1989, and we purchased this product from AstraZeneca in June 2006. Diprivan^® maintains the number one unit and dollar position in the US market.

Heparin. Injectable heparin is a blood thinner used to prevent and treat blood clotting, especially during and after surgery. We manufacture one of the most comprehensive lines of injectable therapeutic heparin. According to 2007 IMS data, we currently hold the number one unit and dollar share position for injectable therapeutic heparin. The U.S. market for injectable therapeutic heparin vials was 80 million units in 2007.

Naropin^®. Naropin^® is a patent protected long-acting local anesthetic that contains ropivicaine HCI, which is a member of the amino amide class of local anesthetics. Naropin^® is indicated for the production of local

4

or regional anesthesia for surgery and for acute pain management. AstraZeneca developed Naropin^®, and we purchased this product from AstraZeneca in June 2006.

Oxytocin. Oxytocin is used to induce labor at term and control postpartum bleeding. Wyeth-Ayerst originally marketed oxytocin under the brand name Pitocin^®. We currently hold the number one unit and dollar share position for oxytocin in the US market.

Recent Developments

In the first quarter of 2008, a major supplier of heparin announced the recall of all the heparin sodium injection and heparin flush products that they were offering to the market. In response to FDA and hospital concerns about a potential shortage of therapeutic heparin, we announced that we would immediately increase manufacturing of this product. Since that time, we have has ramped up production to a level we believe is sufficient to meet the entire U.S. market demand.

Injectable Pharmaceutical Products under Development

We believe that we are currently the leader in injectable ANDA drug approvals. Since June 1, 1998, when we acquired 14 pending abbreviated new drug applications, or ANDA’s, we have filed 100 applications with the FDA and received a total of 83 product approvals.

5

We currently have over 30 ANDA’s pending with the FDA and over 70 product candidates under development across our oncology, anti-infective and critical care product categories. In 2007, we received 11 ANDA approvals and 4 tentative approvals and in 2008 have received 4 approvals to date.

Research and Development

We have approximately 72 employees dedicated to product development who have expertise in areas such as pharmaceutical formulation, analytical chemistry and drug delivery. We currently lease and operate 48,000 square feet in a research and development facility in Melrose Park, Illinois. In 2006, the Melrose Park facility underwent a major renovation, reconfiguration and expansion to enhance our development capabilities.

When developing new products, we consider a variety of factors, including:

• potential pricing and gross margins;

• existing and potential market size;

• high barriers to entry;

• patent expiration date;

• our manufacturing capabilities and access to raw materials;

• potential development and competitive challenges; and

• whether these products complement our existing products and the opportunity to leverage these products with the development of additional products.

We have made, and will continue to make, substantial investment in research and development. Research and development costs for the years ended December 31, 2007 and 2006 totaled $46.5 million and $27.8 million, respectively.

Sales and Marketing

Our products are primarily marketed by a dedicated sales force to hospitals, long-term care facilities, alternate care sites, clinics and doctors who administer injectable products in their offices. Many purchases by these buyers are made through arrangements with GPOs, which negotiate collective purchasing agreements on behalf of their members, or through specialty distributors, which specialize in particular therapeutic categories such as oncology. We sell to members of all of the major GPOs in the United States, which we believe

6

collectively represent over 95% of all hospital-based pharmaceutical purchasers in the United States. We also sell products to the leading specialty distributors. We believe we have access to nearly 100% of the buyers of injectable products in the United States. Our sales force is comprised of approximately 36 field sales and national accounts professionals, supported by our customer service and sales support groups. Our representatives typically have substantial injectable pharmaceutical sales experience in the geographic region in which they operate.

We currently derive, and expect to continue to derive, a large percentage of our revenue from customers that are members of a small number of GPOs. Currently, fewer than ten GPOs control a large majority of sales to hospital customers. We have purchasing arrangements with the major GPOs in the United States, including AmeriNet, Inc., Broadlane Healthcare Corporation, Consorta, Inc., MedAssets Inc., Novation, LLC, Owen Healthcare, Inc., PACT, LLC, Premier Purchasing Partners, LP, International Oncology Network, or ION, National Oncology Alliance, or NOA and U.S. Oncology, Inc. In order to maintain these relationships, we believe we need to be a reliable supplier, offer a broad product line, remain price competitive, comply with FDA regulations and provide high-quality products. Our GPO agreements are typically multi-year in duration and may be terminated on short notice.

Competition

Competition among pharmaceutical and other companies that develop, manufacture or market pharmaceutical products is intense. We compete with these entities in all areas of business, including competing to attract and retain qualified scientific and technical personnel.

We face competition from major, brand name pharmaceutical companies as well as generic manufacturers such as Hospira, Inc., Bedford Laboratories, Baxter Laboratories (including Elkin-Sinn), SICOR Inc. (acquired by Teva Pharmaceuticals USA), Mayne Pharma (acquired by Hospira, Inc.) and increased competition from new, overseas competitors.

Revenue and gross profit derived from sales of generic pharmaceutical products tend to follow a pattern based on regulatory and competitive factors. As patents for brand name products and related exclusivity periods expire, the first generic pharmaceutical manufacturer to receive regulatory approval for generic versions of these products is generally able to achieve significant market penetration and higher margins. As competing generic manufacturers receive regulatory approvals on similar products, market share, revenue and gross profit typically decline. The level of market share, revenue and gross profit attributable to a particular generic pharmaceutical product is normally related to the number of competitors in that product’s market and the timing of that product’s regulatory approval and launch in relation to competing approvals and launches. We continue to develop and introduce new products in a timely and cost-effective manner and identify niche products with significant barriers to entry in order to maintain our revenue and gross margins.

Regulatory Considerations

Prescription pharmaceutical products are subject to extensive pre- and post-market regulation by the FDA, including regulations that govern the testing, manufacturing, safety, efficacy, labeling, storage, record keeping, advertising and promotion of the products under the Federal Food Drug and Cosmetic Act and the Public Health Services Act, and by comparable agencies in foreign countries. FDA approval is required before any dosage form of any drug can be marketed in the United States. All applications for FDA approval must contain information relating to pharmaceutical formulation, stability, manufacturing, processing, packaging, labeling and quality control.

Generic Drug Approval

The Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, established abbreviated FDA approval procedures for those drugs that are no longer protected by patents and

7

which are shown to be equivalent to previously approved proprietary drugs. Approval to manufacture these drugs is obtained by filing an abbreviated new drug application, or an ANDA. An ANDA is a comprehensive submission that must contain data and information pertaining to the active pharmaceutical ingredient, drug product formulation, specifications and stability of the generic drug, as well as analytical methods, manufacturing process validation data and quality control procedures. As a substitute for clinical studies, the FDA may require data indicating that the ANDA drug formulation is equivalent to a previously approved proprietary drug. In order to obtain an ANDA approval of strength or dosage form that differs from the referenced brand name drug, an applicant must file and have granted an ANDA Suitability Petition. A product is not eligible for ANDA approval if it is not determined by the FDA to be equivalent to the referenced brand name drug or if it is intended for a different use. However, such a product might be approved under a New Drug Application, or an NDA, with supportive data from clinical trials.

One advantage of the ANDA approval process is that an ANDA applicant generally can rely upon equivalence data in lieu of conducting pre-clinical testing and clinical trials to demonstrate that a product is safe and effective for its intended use. We generally file ANDAs to obtain approval to manufacture and market our generic products. No assurance can be given that ANDAs submitted for our products will receive FDA approval on a timely basis, if at all.

New Drug Approval

The process required by the FDA before a new drug may be marketed in the United States generally involves:

• completion of pre-clinical laboratory and animal testing;

• submission of an investigational new drug application, or IND, which must become effective before trials may begin;

• performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug product’s intended use; and

• submission to and approval by the FDA of a new drug application, or NDA.

Clinical trials are typically conducted in three sequential phases that may overlap. These phases generally include:

• Phase I during which the drug is introduced into healthy human subjects or, on occasion, patients, and generally is tested for safety, stability, dose tolerance and metabolism;

• Phase II during which the drug is introduced into a limited patient population to determine the efficacy of the product in specific targeted diseases, to determine dosage tolerance and optimal dosage and to identify possible adverse effects and safety risks; and

• Phase III during which the clinical trial is expanded to a more diverse patient group in geographically dispersed trial sites to further evaluate clinical efficacy, optimal dosage and safety.

The drug sponsor, the FDA or the Institutional Review Board at each institution at which a clinical trial is being performed may suspend a clinical trial at any time for various reasons, including a belief that the subjects are being exposed to an unacceptable health risk.

The results of product development, preclinical animal studies and human studies are submitted to the FDA as part of the NDA. The NDA also must contain extensive manufacturing information. The FDA may approve on the basis of the submission made or disapprove the NDA if applicable FDA regulatory criteria are not satisfied. The FDA may also require additional clinical data. Under certain circumstances, drug sponsors may obtain approval pursuant to Section 505(b)(2) of the Federal Food, Drug & Cosmetic Act based in part upon literature or an FDA finding and/or effectiveness for another approved product, even where the products are not duplicates in

8

terms of chemistry and bioequivalence. Once approved, the FDA may withdraw the product approval if compliance with pre- and post-market regulatory standards is not maintained or if problems occur after the product reaches the marketplace. In addition, the FDA may require post-marketing studies to monitor the effect of approved products and may limit further marketing of the product based on the results of these post-marketing studies. The FDA has broad post-market regulatory and enforcement powers, including the ability to levy fines and civil penalties, suspend or delay issuance of approvals, seize or recall products, and withdraw approvals.

Satisfaction of FDA pre-market approval requirements typically takes several years and the actual time required may vary substantially based upon the type, complexity and novelty of the product or disease. Government regulation may delay or prevent marketing of potential products for a considerable period of time and impose costly procedures upon a manufacturer’s activities. Success in early stage clinical trials does not assure success in later stage clinical trials. Data obtained from clinical activities is not always conclusive and may be susceptible to varying interpretations that could delay, limit or prevent regulatory approval. Even if a product receives regulatory approval, later discovery of previously unknown problems with a product may result in restrictions on the product or even complete withdrawal of the product from the market.

In addition to regulating and auditing human clinical trials, the FDA regulates and inspects equipment, facilities, laboratories, and processes used in the manufacturing and testing of such products prior to providing approval to market a product. If after receiving clearance from the FDA, a material change is made in manufacturing equipment, location or process, additional regulatory review may be required. Our manufacturers also must adhere to current Good Manufacturing Practice and product-specific regulations enforced by the FDA through its facilities inspection program. The FDA also conducts regular, periodic visits to re-inspect equipment, facilities, laboratories and processes following the initial approval. If, as a result of these inspections, the FDA determines that the equipment, facilities, laboratories, or processes of our manufacturers do not comply with applicable FDA regulations and conditions of product approval, the FDA may seek civil, criminal, or administrative sanctions and/or remedies against our manufacturers, including the suspension of manufacturing operations.

We are also subject to various federal and state laws pertaining to health care “fraud and abuse,” including anti-kickback laws and false claims laws. Anti-kickback laws make it illegal to solicit, offer, receive, or pay any remuneration in exchange for, or to induce, the referral of business, including the purchase or prescription of a particular drug. The federal government has published regulations that identify “safe harbors” or exemptions for certain arrangements that do not violate the anti-kickback statutes. Due to the breadth of the statutory provisions and the absence of guidance in the form of regulations or court decisions addressing some of practices, it is possible that our practices might be challenged under anti-kickback or similar laws. False claims laws prohibit anyone from knowingly and willingly presenting, or causing to be presented for payment to third party payers (including Medicare and Medicaid), claims for reimbursed drugs or services that are false or fraudulent, claims for items or services not provided as claimed, or claims for medically unnecessary items or services. The activities of our strategic partners relating to the sale and marketing of our products may be subject to scrutiny under these laws. Violations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including fines and civil monetary penalties, as well as the possibility of exclusion from federal health care programs (including Medicare and Medicaid). If the government were to allege against or convict us of violating these laws, there could be a material adverse effect on us. Our activities could be subject to challenge for the reasons discussed above and due to the broad scope of these laws and the increasing attention being given to them by law enforcement authorities.

We are also subject to regulation under the Occupational Safety and Health Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act, and other current and potential future federal, state, or local laws, rules, and/or regulations. Our research and development activities involve the controlled use of chemicals, biological materials and other hazardous materials. We believe that our procedures comply with the standards prescribed by federal, state, or local laws, rules, and/or regulations; however, the risk of injury or accidental contamination cannot be completely eliminated.

9

Manufacturing

Our manufacturing operations are located in Melrose Park, Illinois, Grand Island, New York, and Barceloneta, Puerto Rico. The Puerto Rico facility, which we acquired from Pfizer Inc. in February 2007, consists of a validated manufacturing plant with capabilities of producing EU and US compliant injectable pharmaceuticals, as well as protein based biologics and metered dosed inhalers. We began commercial manufacturing from our Puerto Rico facility in the second half of 2007. These manufacturing facilities, which include dedicated cephalosporin powder filling, liquid filling line and oncolytic manufacturing suites, have in the aggregate approximately 848,500 square feet of manufacturing, packaging, laboratory, office and warehouse space.

We can produce a broad range of dosage formulations, including lyophilized products, liquids, both aseptically filled and terminally sterilized, and powders. We currently produce approximately 190 million vials of product per year and have the capacity to produce 250 million vials of product per year.

Since 1998, we increased our capacity from three to 14 lyophilizers with an additional four presently pending installation. This increased lyophilizer capacity has enhanced our ability to deliver on our product pipeline.

In addition to manufacturing, we have fully integrated manufacturing support systems, including quality assurance, quality control, regulatory affairs and inventory control. These support systems enable us to maintain high standards of quality for our products and simultaneously deliver reliable services and goods to our customers on a timely basis.

We are required to comply with the applicable FDA manufacturing requirements contained in the FDA’s current Good Manufacturing Practice, or cGMP, regulations. cGMP regulations require quality control and quality assurance as well as the corresponding maintenance of records and documentation. Our manufacturing facilities must meet cGMP requirements to permit us to manufacture our products. We are subject to the periodic inspection of our facilities, procedures and operations and/or the testing of our products by the FDA, the Drug Enforcement Administration and other authorities to assess our compliance with applicable regulations.

Failure to comply with the statutory and regulatory requirements subjects the manufacturer to possible legal or regulatory action, including the seizure or recall of products, injunctions, consent decrees placing significant restrictions on or suspending manufacturing operations, and civil and criminal penalties. Adverse experiences with the product must be reported to the FDA and could result in the imposition of market restriction through labeling changes or in product removal. Product approvals may be withdrawn if compliance with regulatory requirements is not maintained or if problems concerning safety or efficacy of the product occur following approval.

Raw Materials

The manufacture of our products requires raw materials and other components that must meet stringent FDA requirements. Some of these raw materials and other components currently are available only from a limited number of sources. Additionally, regulatory approvals for a particular product denote the raw materials and components, and the suppliers for such materials that may be used for that product. Even when more than one supplier exists, we may elect to list, and in some cases have only listed, one supplier in our applications with the FDA. Any change in or addition of a supplier not previously approved must then be submitted through a formal approval process with the FDA. From time to time, it is necessary to maintain increased levels of certain raw materials due to the anticipation of raw material shortages or in response to market opportunities.

Intellectual Property

We rely on trade secrets, unpatented proprietary know-how, continuing technological innovation and patent protection to preserve our competitive position. Our success depends on our ability to operate without infringing the patents and proprietary rights of third parties. We cannot determine with certainty whether patents or patent applications of other parties will materially affect our ability to make, use or sell any products. A number of

10

pharmaceutical companies, biotechnology companies, universities and research institutions may have filed patent applications or may have been granted patents that cover aspects of our or our licensors’ products, product candidates or other technologies.

Intellectual property protection is highly uncertain and involves complex legal and factual questions. Our patents and those for which we have or will license rights may be challenged, invalidated, infringed or circumvented, and the rights granted in those patents may not provide proprietary protection or competitive advantages to us. We and our licensors may not be able to develop patentable products. Even if patent claims are allowed, the claims may not issue, or in the event of issuance, may not be sufficient to protect the technology owned by or licensed to us.

Third-party patent applications and patents could reduce the coverage of the patents licensed, or that may be licensed to or owned by us. If patents containing competitive or conflicting claims are issued to third parties, we may be enjoined from commercialization of products or be required to obtain licenses to these patents or to develop or obtain alternative technology. In addition, other parties may duplicate, design around or independently develop similar or alternative technologies to our licensors or ours.

Litigation may be necessary to enforce patents issued or licensed to us or to determine the scope or validity of another party’s proprietary rights. U.S. Patent and Trademark Office interference proceedings may be necessary if we and another party both claim to have invented the same subject matter. We could incur substantial costs and our management’s attention would be diverted if:

• patent litigation is brought by third parties;

• we are party to or participate in patent suits brought against or initiated by our licensors;

• we initiate similar suits; or

• we are party to or participate in an interference proceeding.

In addition, we may not prevail in any of these actions or proceedings.

Employees

As of December 31, 2007, we had a total of 1,375 full-time employees, of which 72 were engaged in research and development, 315 were in quality assurance and quality control, 779 were in manufacturing, 61 were in sales and marketing and 148 were in administration and finance. None of our employees are represented by a labor union or subject to a collective bargaining agreement. We have not experienced any work stoppage and consider our relations with our employees to be good.

Environment

We believe that our operations comply in all material respects with applicable laws and regulations concerning the environment. While it is impossible to predict accurately the future costs associated with environmental compliance and potential remediation activities, compliance with environmental laws is not expected to require significant capital expenditures and has not had, and is not expected to have, a material adverse effect on our earnings or competitive position.

Available Information

Our Internet address is www.apppharma.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports, are available free of charge on our website as soon as reasonably practical after they are electronically filed or furnished to the SEC. The information found on our website shall not be deemed incorporated by reference by any general statement into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent we specifically incorporate the information found on our website by reference, and shall not be deemed filed under such Acts.

11

The SEC also maintains an Internet site that contains reports, proxy and information statements, and other information about issuers that file reports electronically with the SEC. The address of that site is http://www.sec.gov.

Item 1A. RISK FACTORS

You should carefully consider the risks described below before investing in our securities. The risks described below are not only risks unique to our company. Our business is also subject to the risks that affect many other companies, such as competition and general economic conditions. Additional risks not currently known to us or that we currently believe are immaterial also may impair our business operations and our liquidity.

Factors That May Affect Future Results of Operations

If we are unable to develop and commercialize new products, our financial condition will deteriorate.

Profit margins for a pharmaceutical product generally decline as new competitors enter the market. As a result, our future success will depend on our ability to commercialize the product candidates we are currently developing, as well as develop new products in a timely and cost-effective manner. We currently have over 30 ANDAs pending with the FDA and over 70 product candidates under development. Successful development and commercialization of our product candidates will require significant investment in many areas, including research and development and sales and marketing, and we may not realize a return on those investments. In addition, development and commercialization of new products are subject to inherent risks, including:

• failure to receive necessary regulatory approvals;

• difficulty or impossibility of manufacture on a large scale;

• prohibitive or uneconomical costs of marketing products;

• inability to secure raw material or components from third-party vendors in sufficient quantity or quality or at a reasonable cost;

• failure to be developed or commercialized prior to the successful marketing of similar or superior products by third parties;

• lack of acceptance by customers;

• impact of authorized generic competition;

• infringement on the proprietary rights of third parties;

• grant of new patents for existing products may be granted, which could prevent the introduction of newly-developed products for additional periods of time; and

• grant to another manufacturer by the FDA of a 180-day period of marketing exclusivity under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, as patents or other exclusivity periods for brand name products expire.

The timely and continuous introduction of new products is critical to our business. Our financial condition will deteriorate if we are unable to successfully develop and commercialize new products.

If sales of our key products decline, our business may be adversely affected.

Our top ten products comprised approximately 57% of our total revenue for the year ended December 31, 2007. Our key products could lose market share or revenue due to numerous factors, many of which are beyond our control, including:

• lower prices offered on similar products by other manufacturers;

• substitute or alternative products or therapies;

12

• development by others of new pharmaceutical products or treatments that are more effective than our products;

• introduction of other generic equivalents or products which may be therapeutically interchanged with our products;

• interruptions in manufacturing or supply;

• changes in the prescribing practices of physicians;

• changes in third-party reimbursement practices; and

• migration of key customers to other manufacturers or sellers.

Any factor adversely affecting the sale of our key products may cause our revenues to decline.

If we or our suppliers are unable to comply with ongoing and changing regulatory standards, sales of our products could be delayed or prevented.

Virtually all aspects of our business, including the development, testing, manufacturing, processing, quality, safety, efficacy, packaging, labeling, record-keeping, distribution, storage and advertising and promotion of our products and disposal of waste products arising from these activities, are subject to extensive regulation by federal, state and local governmental authorities in the United States, including the FDA and the Department of Health and Humans Services Office of Inspector General (OIG). Our business is also subject to regulation in foreign countries. Compliance with these regulations is costly and time-consuming.

Our manufacturing facilities and procedures and those of our suppliers are subject to ongoing regulation, including periodic inspection by the FDA and foreign regulatory agencies. For example, manufacturers of pharmaceutical products must comply with detailed regulations governing current good manufacturing practices, including requirements relating to quality control and quality assurance. We must spend funds, time and effort in the areas of production, safety, quality control and quality assurance to ensure compliance with these regulations. We cannot assure that our manufacturing facilities or those of our suppliers will not be subject to regulatory action in the future.

Our products generally must receive appropriate regulatory clearance before they can be sold in a particular country, including the United States. We may encounter delays in the introduction of a product as a result of, among other things, insufficient or incomplete submissions to the FDA for approval of a product, objections by another company with respect to our submissions for approval, new patents by other companies, patent challenges by other companies which result in a 180-day exclusivity period, and changes in regulatory policy during the period of product development or during the regulatory approval process. The FDA has the authority to revoke drug approvals previously granted and remove from the market previously approved products for various reasons, including issues related to current good manufacturing practices for that particular product or in general. We may be subject from time to time to product recalls initiated by us or by the FDA. Delays in obtaining regulatory approvals, the revocation of a prior approval, or product recalls could impose significant costs on us and adversely affect our ability to generate revenue.

Our inability or the inability of our suppliers to comply with applicable FDA and other regulatory requirements can result in, among other things, warning letters, fines, consent decrees restricting or suspending our manufacturing operations, delay of approvals for new products, injunctions, civil penalties, recall or seizure of products, total or partial suspension of sales and criminal prosecution. Any of these or other regulatory actions could materially adversely affect our business and financial condition.

State pharmaceutical marketing compliance and reporting requirements may expose us to regulatory and legal action by state governments or other government authorities.

In recent years, several states, including California, Vermont, Maine, Minnesota, New Mexico and West Virginia, in addition to the District of Columbia, have enacted legislation requiring pharmaceutical companies to

13

establish marketing compliance programs and file periodic reports on sales, marketing, pricing and other activities. Similar legislation is being considered in other states. Many of these requirements are new and uncertain, and available guidance is limited. We are continuing to assess our compliance with these state laws. Unless we are in full compliance with these laws, we could face enforcement action and fines and other penalties and could receive adverse publicity, all of which could harm our business.

We may be required to change the labeling of our products if side effects or manufacturing problems are identified after the products are on the market.

If side effects are identified after any of our products are on the market, or if manufacturing problems occur, regulatory approval may be withdrawn and reformulation of products, additional clinical trials, changes in labeling of products, and changes to or re-approvals of our manufacturing facilities may be required, any of which could have a material adverse effect on sales of the affected products and on our business and results of operations. For example, a supplier recently initiated a recall of its heparin product due to increased adverse events associated with the product.

After any of our products are approved for commercial use, we or regulatory bodies could decide that changes to our product labeling are required. Label changes may be necessary for a number of reasons, including the identification of actual or theoretical safety or efficacy concerns by regulatory agencies or the discovery of significant problems with a similar product that implicates an entire class of products. Any significant concerns raised about the safety or efficacy of our products could also result in the need to reformulate those products, to conduct additional clinical trials, to make changes to our manufacturing processes, or to seek re-approval of our manufacturing facilities. Significant concerns about the safety and effectiveness of a product could ultimately lead to the revocation of its marketing approval. The revision of product labeling or the regulatory actions described above could be required even if there is no clearly established connection between the product and the safety or efficacy concerns that have been raised. The revision of product labeling or the regulatory actions described above could have a material adverse effect on sales of the affected products and on our business and results of operations.

The manufacture of our products is highly exacting and complex, and if we or our suppliers encounter production problems, our business may suffer.

Almost all of the pharmaceutical products we make are sterile, injectable drugs. We also purchase some such products from other companies. The manufacture of all our 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, lost revenue, time and expense spent in investigating the cause and, depending on the cause, similar losses with respect to other batches or products. If such problems are not discovered before the product is released to the market, recall costs may also be incurred. To the extent we experience problems in the production of our pharmaceutical products, this may be detrimental to our business, operating results and reputation. Additionally, we could incur additional costs if we fail to timely transfer products to our Puerto Rico manufacturing facility.

Our markets are highly competitive and, if we are unable to compete successfully, our revenue will decline and our business will be harmed.

The markets for injectable pharmaceutical products are highly competitive, rapidly changing and undergoing consolidation. Most of our products are generic injectable versions of brand name products that are still being marketed by proprietary pharmaceutical companies. The first company to market a generic product is often initially able to achieve high sales, profitability and market share with respect to that product. Prices, revenue and market size for a product typically decline, however, as additional generic manufacturers enter the market.

14

We face competition from major, brand name pharmaceutical companies as well as generic manufacturers such as Hospira, Inc., Bedford Laboratories, Baxter Laboratories (including Elkin-Sinn), SICOR Inc. (acquired by Teva Pharmaceuticals USA) and Mayne Pharma (acquired by Hospira, Inc.) and, in the future, increased competition from new, foreign competitors. Smaller and foreign companies may also prove to be significant competitors, particularly through collaboration arrangements with large and established companies. Many of our competitors have significantly greater research and development, financial, sales and marketing, manufacturing, regulatory and other resources than us. As a result, they may be able to devote greater resources to the development, manufacture, marketing or sale of their products, receive greater resources and support for their products, initiate or withstand substantial price competition, more readily take advantage of acquisition or other opportunities, or otherwise more successfully market their products.

Any reduction in demand for our products could lead to a decrease in prices, fewer customer orders, reduced revenues, reduced margins, reduced levels of profitability, or loss of market share. These competitive pressures could adversely affect our business and operating results.

We face uncertainty related to pricing and reimbursement and health care reform.

In both domestic and foreign markets, sales of our products will depend in part on the availability of reimbursement from third-party payors such as government health administration authorities, private health insurers, health maintenance organizations and other health care-related organizations. However, reimbursement by such payors is presently undergoing reform, and there is significant uncertainty at this time how this will affect sales of certain pharmaceutical products. There is possible U.S. legislation or regulatory action affecting, among other things, pharmaceutical pricing and reimbursement, including under Medicaid and Medicare, the importation of prescription drugs that are marketed outside the U.S. and sold at prices that are regulated by governments of various foreign countries.

Medicare, Medicaid and other governmental reimbursement legislation or programs govern drug coverage and reimbursement levels in the United States. Federal law requires all pharmaceutical manufacturers to rebate a percentage of their revenue arising from Medicaid-reimbursed drug sales to individual states. Generic drug manufacturers’ agreements with federal and state governments provide that the manufacturer will remit to each state Medicaid agency, on a quarterly basis, 11% of the average manufacturer price for generic products marketed and sold under abbreviated new drug applications covered by the state’s Medicaid program. For proprietary products, which are marketed and sold under new drug applications, manufacturers are required to rebate the greater of (a) 15.1% of the average manufacturer price or (b) the difference between the average manufacturer price and the lowest manufacturer price for products sold during a specified period.

Both the federal and state governments in the United States and foreign governments continue to propose and pass new legislation, rules and regulations designed to contain or reduce the cost of health care. Existing regulations that affect the price of pharmaceutical and other medical products may also change before any of our products are approved for marketing. Cost control initiatives could decrease the price that we receive for any product we develop in the future. In addition, third-party payers are increasingly challenging the price and cost-effectiveness of medical products and services and litigation has been filed against a number of pharmaceutical companies in relation to these issues. Additionally, significant uncertainty exists as to the reimbursement status of newly approved injectable pharmaceutical products. Our products may not be considered cost effective or adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an adequate return on our investment.

If we are unable to maintain our key customer arrangements, sales of our products and revenue would decline.

Almost all injectable pharmaceutical products are sold to customers through arrangements with group purchasing organizations, or GPOs, and distributors. The majority of hospitals contract with the GPO of their

15

choice for their purchasing needs. We currently derive, and expect to continue to derive, a large percentage of our revenue from customers that are members of a small number of GPOs. Currently, fewer than ten GPOs control a large majority of sales to hospital customers.

We have purchasing arrangements with the major GPOs in the United States, including AmeriNet, Inc., Broadlane Healthcare Corporation, Consorta, Inc., MedAssets Inc., Novation, LLC, Owen Healthcare, Inc., PACT, LLC, Premier Purchasing Partners, LP, International Oncology Network, or ION, National Oncology Alliance, or NOA, and U.S. Oncology, Inc. In order to maintain these relationships, we believe we need to be a reliable supplier, offer a broad product line, remain price competitive, comply with FDA regulations and provide high-quality products. The GPOs through which we sell our products also have purchasing agreements with other manufacturers that sell competing products and the bid process for products such as ours is highly competitive. Most of our GPO agreements may be terminated on short notice. If we are unable to maintain our arrangements with GPOs and key customers, sales of our products and revenue would decline.

The strategy to license rights to or acquire and commercialize proprietary or other specialty injectable products may not be successful, and we may never receive any return on our investment in these product candidates.

We may license rights to or acquire or commercialize proprietary or other specialty injectable products or technologies. Other companies, including those with substantially greater financial and sales and marketing resources, will compete with us to license rights to or acquire or commercialize these products. We may not be able to license rights to or acquire these proprietary or other products or technologies on acceptable terms, if at all. Even if we obtain rights to a pharmaceutical product and commit to payment terms, including, in some cases, up-front license payments, we may not be able to generate product sales sufficient to create a profit or otherwise avoid a loss.

A product candidate may fail to result in a commercially successful drug for other reasons, including the possibility that the product candidate may:

• fail to receive necessary regulatory approvals;

• be difficult or uneconomical to produce in commercial quantities;

• be precluded from commercialization by proprietary rights of third parties; or

• fail to achieve market acceptance.

The marketing strategy, distribution channels and levels of competition with respect to any licensed or acquired product may be different from those of our current products, and we may not be able to compete favorably in any new product category.

Our chief executive officer and entities affiliated with him own a significant percentage of our common stock and could exercise significant influence over matters requiring stockholder approval, regardless of the wishes of other stockholders.

As of December 31, 2007, our chief executive officer and entities affiliated with him owned over 80% of our common stock. Accordingly, they have the ability to significantly influence all matters requiring stockholder approval, including the election and removal of directors and approval of significant corporate transactions such as mergers, consolidations and sales of assets. This concentration of ownership could have the effect of delaying, deferring or preventing a change in control or impeding a merger or consolidation, takeover or other business combination, which could cause the market price of our common stock to fall or prevent our stockholders from receiving a premium in such a transaction. This significant concentration of stock ownership may adversely affect the market for and trading price of our common stock if investors perceive that conflicts of interest may exist or arise.

16

We depend heavily on the principal members of our management team, the loss of whom could harm our business.

We depend heavily on the principal members of our management team. Each of the members of the executive management team is employed “at will.” The loss of the services of any member of the executive management team may significantly delay or prevent the achievement of product development or business objectives.

To be successful, we must attract, retain and motivate key employees, and the inability to do so could seriously harm our operations.

To be successful, we must attract, retain and motivate executives and other key employees. We face competition for qualified scientific, technical and other personnel, which may adversely affect our ability to attract and retain key personnel. We also must continue to attract and motivate employees and keep them focused on our strategies and goals.

We depend on third parties to supply raw materials and other components and may not be able to obtain sufficient quantities of these materials, which will limit our ability to manufacture our products on a timely basis and harm our operating results.

The manufacture of our products requires raw materials and other components that must meet stringent FDA requirements. Some of these raw materials and other components are available only from a limited number of sources. Additionally, our regulatory approvals for each particular product denote the raw materials and components, and the suppliers for such materials, we may use for that product. Obtaining approval to change, substitute or add a raw material or component, or the supplier of a raw material or component, can be time consuming and expensive, as testing and regulatory approval is necessary. If our suppliers are unable to deliver sufficient quantities of these materials on a timely basis or we encounter difficulties in our relationships with these suppliers, the manufacture and sale of our products may be disrupted, and our business, operating results and reputation could be adversely affected.

Other companies may claim that we infringe their intellectual property or proprietary rights, which could cause us to incur significant expenses or prevent us from selling our products.

Our success depends in part on our ability to operate without infringing the patents and proprietary rights of third parties. The manufacture, use, offer for sale and sale of pharmaceutical products have been subject to substantial litigation in the pharmaceutical industry. These lawsuits relate to the enforceability, validity and infringement of patents or proprietary rights of third parties. Infringement litigation is prevalent with respect to generic versions of products for which the patent covering the brand name product is expiring, particularly since many companies which market generic products focus their development efforts on products with expiring patents. A number of pharmaceutical companies, biotechnology companies, universities and research institutions may have filed patent applications or may have been granted patents that cover aspects of our products or our licensors’ products, product candidates or other technologies.

Future or existing patents issued to third parties may contain claims that conflict with our products. We are subject to infringement claims from time to time in the ordinary course of our business, and third parties could assert infringement claims against us in the future with respect to our current products, products we may develop or products we may license. In addition, our patents and patent applications, or those of our licensors, could face other challenges, such as interference, opposition and reexamination proceedings. Any such challenge, if successful, could result in the invalidation of, or a narrowing of scope of, any such patents and patent applications. Litigation or other proceedings could force us to:

• stop or delay selling, manufacturing or using products that incorporate or are made using the challenged intellectual property;

17

• pay damages; or

• enter into licensing or royalty agreements that may not be available on acceptable terms, if at all.

Any litigation or interference proceedings, regardless of their outcome, would likely delay the regulatory approval process, be costly and require significant time and attention of key management and technical personnel.

Our inability to protect our intellectual property rights in the United States and foreign countries could limit our ability to manufacture or sell our products.

We rely on trade secrets, unpatented proprietary know-how, continuing technological innovation and patent protection to preserve our competitive position. Our patents and those for which we have or will license rights, may be challenged, invalidated, infringed or circumvented, and the rights granted in those patents may not provide proprietary protection or competitive advantages to us. We and our licensors may not be able to develop patentable products. Even if patent claims are allowed, the claims may not issue, or in the event of issuance, may not be sufficient to protect the technology owned by or licensed to us. Third-party patents could reduce the coverage of the patents licensed, or that may be license to or owned by us. If patents containing competitive or conflicting claims are issued to third parties, we may be prevented from commercializing the products covered by such patents, or may be required to obtain or develop alternate technology. In addition, other parties may duplicate, design around or independently develop similar or alternative technologies.

We may not be able to prevent third parties from infringing or using our intellectual property. We generally control and limit access to, and the distribution of, our product documentation and other proprietary information. Despite our efforts to protect this proprietary information, however, unauthorized parties may obtain and use information that we regard as proprietary. Other parties may independently develop similar know-how or may even obtain access to our technologies.

The laws of some foreign countries do not protect proprietary information to the same extent as the laws of the United States, and many companies have encountered significant problems and costs in protecting their proprietary information in these foreign countries.

The U.S. Patent and Trademark Office and the courts have not established a consistent policy regarding the breadth of claims allowed in pharmaceutical patents. The allowance of broader claims may increase the incidence and cost of patent interference proceedings and the risk of infringement litigation. On the other hand, the allowance of narrower claims may limit the value of our proprietary rights.

We may become subject to federal false claims or other similar litigation brought by private individuals and the government.

The Federal False Claims Act allows persons meeting specified requirements to bring suit alleging false or fraudulent Medicare or Medicaid claims and to share in any amounts paid to the government in fines or settlement. These suits, known as qui tam actions, have increased significantly in recent years and have increased the risk that a health care company will have to defend a false claim action, pay fines and/or be excluded from Medicare and Medicaid programs. Federal false claims litigation can lead to civil monetary penalties, criminal fines and imprisonment and/or exclusion from participation in Medicare, Medicaid and other federally funded health programs. Other alternate theories of liability may also be available to private parties seeking redress for such claims. A number of parties have brought claims against numerous pharmaceutical manufacturers, and we cannot be certain that such claims will not be brought against us, or if they are brought, that such claims might not be successful.

18

We may need to change our business practices to comply with changes to, or may be subject to charges under, the fraud and abuse laws.

We are subject to various federal and state laws pertaining to health care fraud and abuse, including the federal Anti-Kickback Statute and its various state analogues, the federal False Claims Act and marketing and pricing laws. Violations of these laws are punishable by criminal and/or civil sanctions, including, in some instances, imprisonment and exclusion from participation in federal and state health care programs such as Medicare and Medicaid. We may have to change our advertising and promotional business practices, or our existing business practices could be challenged as unlawful due to changes in laws, regulations or rules or due to administrative or judicial findings, which could materially adversely affect our business.

We may be required to defend lawsuits or pay damages for product liability claims.

Product liability is a major risk in testing and marketing biotechnology and pharmaceutical products. We may face substantial product liability exposure in human clinical trials and for products that we sell after regulatory approval. Historically, we have carried product liability insurance and we expect to continue to carry such policies. Product liability claims, regardless of their merits, could exceed policy limits, divert management’s attention and adversely affect our reputation and the demand for our products.

Future sales of substantial amounts of our common stock may adversely affect our market price.

In connection with our 2006 merger with ABI, we issued a significant number of shares of our common stock to a small number of former ABI shareholders. Although such shares are not immediately freely tradable, we have granted registration rights to the former ABI shareholders, including our chief executive officer, to permit the resale of the shares of our common stock that they received in the merger. Future sales of substantial amounts of our common stock into the public market, or perceptions in the market that such sales could occur, may adversely affect the prevailing market price of our common stock.

Our stock price has been volatile in response to market and other factors.

The market price for our common stock has been and may continue to be volatile and subject to price and volume fluctuations in response to market and other factors, including the following, some of which are beyond our control:

• the concentration of the ownership of our shares by a limited number of affiliated stockholders may limit interest in our securities;

• variations in quarterly operating results from the expectations of securities analysts or investors;

• revisions in securities analysts’ estimates or reductions in security analysts’ coverage;

• announcements of technological innovations or new products or services by us or our competitors;

• reductions in the market share of our products;

• announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

• general technological, market or economic trends;

• investor perception of our industry or prospects;

• insider selling or buying;

• investors entering into short sale contracts;

• regulatory developments affecting our industry; and

• additions or departures of key personnel.

19

Risks Relating to the Separation of New Abraxis from New APP

Debt incurred in connection with the separation could adversely affect our operations and financial condition.

We are leveraged as a result of the separation of New Abraxis. We have incurred $1 billion of indebtedness and have an additional $150 million revolving credit facility that is currently unused. $700 million of the proceeds of the indebtedness was contributed to New Abraxis in connection with the separation. Such indebtedness, coupled with the restrictions on our ability to issue equity securities due to the separation without jeopardizing the intended tax consequences of the separation, could have adverse consequences for our business, financial condition and results of operations, such as:

• making more difficult the satisfaction of our obligations to our lenders, resulting in possible defaults on and acceleration of such indebtedness;

• limiting our ability to obtain additional financing to fund growth, working capital, capital expenditures, debt service requirements, acquisitions or other cash requirements;

• limiting our operational flexibility in planning for or reacting to changing conditions in our business and industry;

• requiring dedication of a substantial portion of our cash flows from operations to make payments on our debt, which would reduce the availability of such cash flows to fund working capital, capital expenditures and other general corporate purposes;

• limiting our ability to compete with companies that are not as leveraged, or whose debt is at more favorable interest rates and that, as a result, may be better positioned to withstand economic downturns; and

• increasing our vulnerability to economic downturns and changing market conditions or preventing us from carrying out capital spending that is necessary or important to our growth strategy and efforts to improve operating margins.

We expect to pay our expenses and to pay the principal and interest on our outstanding debt with funds generated by our operations. Our ability to meet our expenses and debt service obligations will depend on our future performance, which will be affected by financial, business, economic and other factors, including potential changes in customer preferences, the success of product and marketing innovations and pressure from competitors. If we do not have enough money to pay our debt service obligations, we may be required to refinance all or part of our existing debt, sell assets or borrow more money. We may not be able to, at any given time, refinance our debt, sell assets or borrow more money on terms acceptable to us or at all, the failure to do any of which could have adverse consequences for our business, financial condition and results of operations.

The financing arrangements we entered into in connection with the separation contain restrictions and limitations that could impact our ability to operate our business.

Our agreements governing the indebtedness we incurred in connection with the separation contain covenants that, among other things, put limitations on our ability and/or one or more of our subsidiaries to dispose of assets, to incur additional indebtedness, to incur guarantee obligations, to pay dividends, to create liens on assets, to enter into sale and leaseback transactions, to make investments (including joint ventures), loans or advances, to engage in mergers, consolidations or sales of all or substantially all of their respective assets, to change the business conducted by us or engage in certain transactions with affiliates.

Various risks, uncertainties and events beyond our control could affect our ability to comply with the covenants contained in our debt agreements. Failure to comply with any of the covenants in our existing or future financing agreements could result in a default under those agreements and under other agreements containing cross-default provisions. A default would permit lenders to accelerate the maturity of the debt under these agreements and to foreclose upon any collateral securing the debt. Under these circumstances, we might not have

20

sufficient funds or other resources to satisfy all of our obligations. In addition, the limitations imposed by financing agreements on our ability to incur additional debt and to take other actions might impair our ability to obtain other financing. We cannot assure you that we will be granted waivers or amendments to these agreements if for any reason we are unable to comply with these agreements or that we will be able to refinance our debt on terms acceptable to us, or at all.

Specifically, the terms of the debt agreement include covenants such as:

• restrictions on acquisitions, which may limit our ability to make attractive acquisitions;

• restrictions on investments, which may prevent us from investing in other companies or entering into joint ventures;

• restrictions on guarantees, which may prevent us from providing commercially desirable credit support to suppliers, customers or other business partners; and

• restrictions on incurrence of additional debt, which may further restrict our ability to make acquisitions or investments or to otherwise expand our business.

Such restrictions in our debt agreement may prevent us from taking actions that would be in the best interest of our business, and may make it difficult to successfully execute our business strategy or effectively compete with companies that are not similarly restricted.

We cannot assure you that we will be able to generate sufficient cash flow needed to service our indebtedness.

Our ability to make scheduled payments on our indebtedness and to fund planned capital expenditures will depend on our ability and that of our subsidiaries to generate cash flow in the future. Our future performance is subject to general economic, financial, competitive, legislative, regulatory and other factors, many of which are beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available in an amount sufficient to enable us to service this debt and fund our other liquidity needs.

If our cash flow and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets or seek to obtain additional equity capital, or refinance indebtedness or obtain additional financing. In the future, our cash flow and capital resources may not be sufficient for payments of interest on and principal of this anticipated debt and there can be no assurance that any of, or a combination of, such alternative measures would provide us with sufficient cash flows. In addition, such alternative measures could have an adverse effect on our business, financial condition and results of operations. In the absence of sufficient operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our anticipated debt service and other obligations or otherwise risk default under the agreements governing our anticipated indebtedness.

We may have potential conflicts of interest with New Abraxis.

Conflicts of interest may arise between New Abraxis and us in a number of areas relating to our past and ongoing relationships, including:

• business opportunities that may be attractive to both New Abraxis and us;

• manufacturing and transitional service arrangements we entered into with New Abraxis;

• lease agreements we entered into with New Abraxis; and

• employee retention and recruiting.

21

Our Chief Executive Officer and Chairman of our board of directors, Patrick Soon-Shiong, M.D., is also the chief executive officer and chairman of the board of directors of New Abraxis. Dr. Soon-Shiong also beneficially owns over 80% of the outstanding capital stock of New Abraxis. Accordingly, he may experience conflicts of interest with respect to decisions involving business opportunities and similar matters that may arise in the ordinary course of our business, on the one hand, and the business of New Abraxis, on the other hand.

We expect to resolve potential conflicts of interest on a case-by-case basis, in the manner required by applicable law and customary business practices. In connection with the separation and related transactions, we entered into an agreement with New Abraxis under which we and New Abraxis acknowledged and agreed that Dr. Soon-Shiong and Ms. Gopala may serve as an officer of both companies and receive compensation from either or both companies. We also acknowledged and agreed in this agreement that neither Dr. Soon-Shiong nor Ms. Gopala will have any obligation to present to our company any business or corporate opportunity that may come to his or her attention other than certain business opportunities relating to the manufacture or sale of products that either were manufactured and sold by the hospital-based products business prior to the separation or were the subject of an ANDA filed prior to the separation and related transactions. This agreement does not ensure the continued services of either Dr. Soon-Shiong or Ms. Gopala following the separation and related transactions, restrict these individuals from resigning from our company or restrict our board of directors from terminating their employment with us. In connection with the private letter ruling, Old Abraxis has represented to the Internal Revenue Service that no person will serve as an executive officer of both New Abraxis and New APP one year following the distribution. Resolutions of some potential conflicts of interest are subject to review and approval by the audit committee of our board of directors or approval by another independent committee of our board of directors. We still may be unable, however, to resolve some potential conflicts of interest with New Abraxis and Dr. Soon-Shiong and, even if we do, the resolution may be less favorable than if we were dealing with an unaffiliated party.

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

Under the terms of the separation and distribution agreement, New Abraxis agreed to indemnify us 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 us of any trademarks or other source identifiers owned by New Abraxis. Similarly, we have agreed to indemnify New Abraxis 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 us. Under the terms of the tax allocation agreement, New Abraxis agrees to indemnify us against all tax liabilities to the extent they relate to the proprietary products business, and we agreed to indemnify New Abraxis against all liabilities to the extent they relate to the hospital-based products business. In addition, New Abraxis agreed to indemnify us 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 us after the distribution. Under the terms of the manufacturing agreement, New Abraxis agreed to indemnify us from any damages resulting from a third-party claim caused by or alleged to be caused by (i) New Abraxis’ failure to perform its obligations under the manufacturing agreement; (ii) any product liability claim arising from the negligence, fraud or intentional misconduct of New Abraxis or any of its affiliates or any product liability claim arising from New Abraxis’ manufacturing obligations (or any failure or deficiency in New Abraxis’ 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, us by reason of the $100 million limitation of liability described below. New Abraxis also agreed to indemnify us 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. We agreed to indemnify New Abraxis from any damages resulting from a third-party claim caused by or alleged to be caused by (i) our gross negligence, bad faith, intentional misconduct or intentional failure to perform our

22

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, us. We 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 Abraxis for any substantial obligations after the separation. We also cannot assure you that, if New Abraxis becomes obligated to indemnify us for any substantial obligations, New Abraxis will have the ability to satisfy those obligations. Any indemnification payment by us, or any failure by New Abraxis to satisfy its indemnification obligations, could have a material adverse effect on our business.

If the holding company merger does not qualify as a reorganization under Section 368(a)(1) of the Internal Revenue Code, then Old Abraxis and Old Abraxis stockholders may be responsible for payment of significant U.S. federal income taxes, and if the distribution does not constitute a tax-free distribution under Section 355 of the Internal Revenue Code, then New APP and New APP stockholders may be responsible for payment of significant U.S. federal income taxes.

In connection with the separation, we received a private letter ruling from the Internal Revenue Service to the effect that (i) the merger of Old Abraxis into Abraxis BioScience, LLC, or the holding company merger, qualifies as a reorganization under Section 368(a)(1)(F) of the Internal Revenue Code and (ii) the contribution of Abraxis BioScience, LLC to New Abraxis, which we refer to as 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 the earnings and profits of New APP, New Abraxis or both). Thus, we received an opinion of Fried, Frank, Harris, Shriver & Jacobson LLP to the effect that these two requirements should be satisfied.

The private letter ruling and opinion of counsel are based, in part on assumptions and representations as to factual matters made by, among others, Old Abraxis, Dr. Soon-Shiong, his wife, and certain Old Abraxis stockholders, as requested by the Internal Revenue Service or counsel, which, if incorrect, could jeopardize the conclusions reached by the Internal Revenue Service and counsel. 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 holding company merger does not qualify as a reorganization under Section 368(a)(1) of the Internal Revenue Code, each Old Abraxis stockholder who received New APP common stock in exchange for Old Abraxis common stock will recognize taxable gain or loss equal to the difference between the fair market value of the Old Abraxis common stock received and such stockholder’s basis in the Old Abraxis common stock exchanged therefor, and Old Abraxis will recognize taxable gain equal to the fair market value of its assets over their aggregate adjusted basis.

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

23

stock distributed to the Old Abraxis stockholders over New APP’s tax basis in the New Abraxis common stock. In addition, each Old Abraxis 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.

In the event that New APP recognizes a taxable gain in connection with the distribution because the distribution does not qualify as a tax-free distribution under Section 355 of the Internal Revenue Code, the taxable gain recognized by New APP would result in significant U.S. federal income tax liabilities to New APP. Under the Internal Revenue Code, New APP would be primarily liable for these taxes and New Abraxis would be secondarily liable. Under the terms of the tax allocation agreement among New APP, New APP LLC, New Abraxis and New Abraxis, LLC, New Abraxis will generally be required to indemnify New APP against any such taxes unless such taxes would not have been imposed but for an act of New APP or its affiliates, subject to specified exceptions. New Abraxis’ or New APP’s respective obligations to indemnify the other pursuant to the tax allocation agreement could have a material adverse effect on New APP and/or New Abraxis. In addition, these mutual indemnity obligations could discourage or prevent a third party from making a proposal to acquire either party.

The distribution may be taxable to New APP and New Abraxis if there is an acquisition of 50% or more of the outstanding common stock of New APP or New Abraxis.

Even if the distribution otherwise qualifies as a tax-free distribution under Section 355 of the Internal Revenue Code, under Section 355(e) of the Internal Revenue Code the distribution of New Abraxis common stock to Old Abraxis stockholders would result in significant U.S. federal income tax liabilities to New APP (but not New APP stockholders) if there is an acquisition of stock of New Abraxis or New APP as part of a plan or series of related transactions that includes the distribution and that results in an acquisition of 50% or more of the outstanding common stock of New Abraxis or New APP.

For purposes of determining whether the distribution of New Abraxis common stock to New APP stockholders in connection with the distribution is disqualified as tax-free to New APP under the rules described in the preceding paragraph, any acquisitions of the stock of New Abraxis or New APP within two years before or after the distribution are presumed to be part of a plan, although the parties may be able to rebut that presumption.

The process for determining whether a prohibited 50% or greater change in control has occurred under these rules is complex, inherently factual and subject to interpretation of the facts and circumstances of a particular case. If New Abraxis or New APP engages in a transaction involving the issuance or disposition or shares, or that otherwise creates a significant change in ownership, New APP would recognize taxable gain if such issuance, disposition or other change in ownership results in an acquisition of 50% or more of the outstanding common stock of New Abraxis or New APP. Furthermore, because a substantial portion of our stock and the stock of New APP will be held by or on behalf of a single stockholder, that stockholder will have the ability to cause or permit a prohibited change in the ownership of New APP or of New Abraxis to occur, which would also cause New APP to recognize a taxable gain under these rules. The private letter ruling and tax opinion obtained in connection with the separation does not address 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.

In the event that New APP recognizes a taxable gain in connection with the distribution because of an acquisition of 50% or more of the outstanding common stock of New Abraxis or New APP as part of a plan or series of related transactions that includes the distribution, the taxable gain recognized by New APP would result in significant U.S. federal income tax liabilities to New APP. Under the Internal Revenue Code, New APP would be primarily liable for these taxes and New Abraxis would be secondarily liable. Under the terms of the tax allocation agreement between New APP and New Abraxis, New Abraxis will generally be required to indemnify New APP against any such taxes unless such taxes would not have been imposed but for an act of New APP or its affiliates, subject to specified exceptions. New Abraxis’s or New APP’s respective obligations to indemnify

24

the other pursuant to the tax allocation agreement could have a material adverse effect on New APP and/or New Abraxis. There can be no assurance that New APP would be able to fulfill its obligations under the tax allocation agreement if New APP was determined to be responsible for these taxes. In addition, these mutual indemnity obligations could discourage or prevent a third party from making a proposal to acquire either party.

Actions taken by our chief executive officer, his wife, or entities affiliated with him or one or more members of his family could adversely affect the tax-free nature of the distribution.

Sales of New Abraxis common stock or New APP common stock by Dr. Soon-Shiong, his wife, or entities affiliated with Dr. Soon-Shiong or one or more members of his family after completion of the distribution may adversely affect the tax-free nature of the distribution. Sales of New Abraxis common stock or New APP common stock by Dr. Soon-Shiong, his wife, or entities affiliated with Dr. Soon-Shiong or one or more members of his family after completion of the distribution might be considered evidence that the distribution was used principally as a device for the distribution of earnings and profits of New APP, New Abraxis or both, particularly if it were determined that the selling stockholder had an intent to effect such sale at the time of the distribution. The obligation of the parties to effect the separation was conditioned upon the receipt of an opinion of Fried, Frank, Harris, Shriver & Jacobson LLP to the effect that, among other requirements, the distribution is not being used principally as a device for the distribution of earnings and profits of New APP, New Abraxis or both. If sales of New Abraxis common stock or New APP common stock by Dr. Soon-Shiong, his wife, or entities affiliated with Dr. Soon-Shiong or one or more members of his family occur after completion of the distribution, the conclusions reached in the opinion may not apply. Dr. Soon-Shiong, his wife and the entities that hold shares of Old Abraxis common stock on behalf of Dr. Soon-Shiong or one or more members of his immediate family have provided a representation to the Internal Revenue Service in connection with the private letter ruling that they have no plan or intention to sell, transfer or otherwise dispose of any of the shares of New Abraxis common stock and New APP common stock they will hold after the distribution. Dr. Soon-Shiong, his wife and such entities provided a similar representation to counsel in connection with counsel’s opinion. If the Internal Revenue Service successfully asserted that the distribution was used principally as a device for the distribution of earnings and profits of New APP, New Abraxis or both, the distribution would not qualify as a tax-free distribution, and thus would be taxable to both New APP and the New APP stockholders (as a result of which New Abraxis would be required to indemnify New APP to the extent required under the tax allocation agreement). Furthermore, sales of New Abraxis common stock or New APP common stock by Dr. Soon-Shiong, his wife, or entities affiliated with Dr. Soon-Shiong or one or more members of his family after completion of the distribution could cause a prohibited change in the ownership of New Abraxis or New APP to occur within the meaning of Section 355(e) of the Internal Revenue Code, which would cause New APP to recognize a taxable gain.

In the event that New APP recognizes a taxable gain in connection with the distribution because the distribution does not qualify as a tax-free distribution under Section 355 of the Internal Revenue Code or because of an acquisition of 50% or more of the outstanding common stock of New Abraxis or New APP as part of a plan or series of related transactions that includes the distribution within the meaning of Section 355(e) of the Internal Revenue Code, the taxable gain recognized by New APP would result in significant U.S. federal income tax liabilities to New APP. Under the Internal Revenue Code, New APP would be primarily liable for these taxes and New Abraxis would be secondarily liable. Under the terms of the tax allocation agreement among New APP, New APP LLC, New Abraxis and New Abraxis LLC, New Abraxis will generally be required to indemnify New APP against any such taxes unless such taxes would not have been imposed but for an act of New APP or its affiliates, subject to specified exceptions. New Abraxis’s or New APP’s respective obligations to indemnify the other pursuant to the tax allocation agreement could have a material adverse effect on New APP and/or New Abraxis. There can be no assurance that New APP would be able to fulfill its obligations under the tax allocation agreement if New APP was determined to be responsible for these taxes. In addition, these mutual indemnity obligations could discourage or prevent a third party from making a proposal to acquire either party.

Item 1B. UNRESOLVED STAFF COMMENTS

None

25

Item 2. PROPERTIES

We operate various facilities in the United States and Canada and Puerto Rico, which have an aggregate size of approximately 848,500 square feet.

Location	Use	Own/ Lease	Lease Expiration	Approximate Square Feet
Schaumburg, Illinois	Administration	Lease	May 2016	45,400
Ontario, Canada	Business office	Lease	June 2014	10,100
Melrose Park, Illinois	Manufacturing(1)	Lease	December 2011	122,000
Melrose Park, Illinois	Research and Development	Lease	December, 2010	48,000
Melrose Park, Illinois	Warehouse and administrative	Lease	December, 2011	71,000
Bensenville, Illinois	Distribution facility	Lease	May 2016	100,000
Grand Island, New York	Manufacturing(2)	Own	—	160,000
Grand Island, New York	Warehouse and administrative(3)	Own	—	120,000
Barceloneta, Puerto Rico	Manufacturing(4)	Own	—	172,000
				848,500

(1) We also use this facility for packaging, laboratory, office and warehouse space.

(2) Approximately 5,700 of manufacturing space has been leased to New Abraxis through December 2011, with an option to extend until December 2012 in certain circumstances.

(3) This facility may be used to expand certain of our manufacturing operations.

(4) Approximately 90,000 of the Puerto Rico facility was conveyed to New Abraxis, representing the active pharmaceutical ingredients manufacturing plant currently leased to Pfizer for a term expiring on February 2012.

Item 3. LEGAL PROCEEDINGS

In October 2007, Old Abraxis entered into a settlement agreement and release with respect to all disputes with a former officer and employee of ABI. Under the separation and distribution agreement, New Abraxis assumed all liabilities relating to litigation with this individual. Pursuant to the indemnification provisions of the definitive agreements for the 2006 merger, the former ABI shareholders indemnified Old Abraxis for approximately two-thirds of the obligations under the settlement agreement and the amount is recorded in our statement of cash flows as non-cash issuance for legal expenses while the entire settlement is reflected in our statement of operations as discontinued operations.

We are from time to time subject to claims and litigation arising in the ordinary course of business. These claims have included assertions that our products infringe existing patents, product liability and also claims that the use of our products has caused personal injuries. We intend to defend vigorously any such litigation that may arise under all defenses that would be available to us. In the opinion of management, the ultimate outcome of proceedings of which management is aware, even if adverse to us, will not have a material adverse effect on our consolidated financial position or results of operations.

26

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

(a) Our 2007 annual meeting of stockholders was held on December 19, 2007.

(c) 1. Our stockholders voted as follows with respect to a proposal to elect six directors to serve until our next annual meeting of stockholders or until their successors are duly elected and qualified:

DIRECTORS	FOR	Authority Withheld
Patrick Soon-Shiong, M.D.	128,496,977	-0-
Michael D. Blaszyk	128,496,977	-0-
Michael Sitrick	128,496,977	-0-
Joseph M. Pizza	128,496,977	-0-
Ramesh Gopalakrishnan	128,496,977	-0-
Stuart DePina	128,496,977	-0-

2. Our stockholders voted as follows with respect to a proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ended December 31, 2007.

FOR	AGAINST	ABSTENTIONS	BROKER NON-VOTES
128,496,977	-0-	-0-	-0-

27

PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market for Common Stock

Our common stock is listed and traded on the NASDAQ Global Market under the symbol “APPX.” Prior to the separation of the hospital-based and proprietary businesses of Old Abraxis into two independent public companies on November 13, 2007, the common stock of Old Abraxis, our predecessor registrant, was listed and traded on the NASDAQ Global Market under the symbol “ABBI.” Prior to the merger of American BioScience into Old Abraxis on April 18, 2006, Old Abraxis’ common stock was listed and traded on the NASDAQ Global Market under the symbol “APPX.” The following table sets forth the high and low split-adjusted closing prices for our common stock, as reported by the NASDAQ composite transaction reporting system as “adjusted closing price” for fiscal year 2007 and for 2006:

	2007 Price Per Share				2006 Price Per Share
For the quarter ended:	High		Low		High		Low
March 31,	$	14.56	$	13.06	$	21.41	$	14.92
June 30,	$	15.05	$	11.28	$	17.32	$	12.53
September 30,	$	12.91	$	10.70	$	14.84	$	10.68
December 31,	$	13.82	$	10.06	$	15.62	$	14.02

As of March 3, 2008, the closing price for our common stock, as reported on NASDAQ, was $11.28 per share. On March 3, 2008, we had approximately 95 holders of record of our common stock.

Dividend Policy

We have never declared or paid a cash dividend. Our senior secured credit agreement limits cash dividend payments, subject to certain limitations, generally up to a maximum aggregate of $10 million. We have no current intention of paying cash dividends.

Issuer Purchases of Equity Securities

We did not purchase any of our equity securities during the fourth quarter of 2007.

28

Item 6. SELECTED FINANCIAL DATA

	Year ended December 31,
	2007			2006			2005			2004			2003
	(in thousands, except per share data)
Net revenue	$	647,374		$	583,201		$	385,082		$	405,010		$	351,315
Cost of sales		332,046			288,079			203,436			191,774			161,573
Gross profit		315,328			295,122			181,646			213,236			189,742
Operating expenses:
Research and development		46,497			27,787			18,454			16,707			17,422
Selling, general and administrative		90,229			80,669			69,059			59,710			51,699
Amortization of merger related intangibles		15,418			10,926			—			—			—
Separation related costs		3,024			—			—			—			—
Merger related in-process research and development charge		—			22,330			—			—			—
Other merger related costs		—			12,613			7,863			—			—
Total operating expenses		155,168			154,325			95,376			76,417			69,121
Income from operations		160,160			140,797			86,270			136,819			120,621
Interest income and other		2,182			3,557			470			1,934			2,295
Interest expense		(25,162	)		(9,186	)		—			—			—
Loss on early extinguishment of credit facility		—			—			—			(1,986	)		—
Minority interests		—			(11,383	)		(25,875	)		(16,301	)		(21,377	)
Income from continuing operations before income taxes		137,180			123,785			60,865			120,466			101,539
Provision for income taxes from continuing operations		55,001			68,559			30,409			45,482			41,176
Net income from continuing operations		82,179			55,226			30,456			74,984			60,363
Net loss from discontinued operations, net of taxes		(47,821	)		(102,123	)		(12,799	)		(56,763	)		(34,010	)
Net income (loss)	$	34,358		$	(46,897	)	$	17,657		$	18,221		$	26,353
Basic income (loss) per common share:
Continuing operations	$	0.51		$	0.35		$	0.19		$	0.59		$	0.39
Discontinued operations		(0.29	)		(0.65	)		(0.08	)		(0.47	)		(0.22	)
Net income (loss) per common share:	$	0.22		$	(0.30	)	$	0.11		$	0.12		$	0.17
Diluted income (loss) per common share:
Continuing operations	$	0.51		$	0.35		$	0.19		$	0.58		$	0.38
Discontinued operations		(0.30	)		(0.64	)		(0.08	)		(0.47	)		(0.22	)
Net income (loss) per common share:	$	0.21		$	(0.29	)	$	0.11		$	0.11		$	0.16
Basic weighted-average common shares outstanding:		159,643			158,937			157,694			156,189			155,557
Diluted weighted-average common shares outstanding:		161,006			160,002			159,742			159,031			158,629
Other data:
Cash flow provided by operating activities	$	12,353		$	324,977		$	34,466		$	42,353		$	30,348
Cash flow (used in) investing activities		(89,022	)		(372,800	)		(43,172	)		(62,795	)		(78,966	)
Cash flow provided by financing activities		66,893			59,391			33,872			17341			12,915
Consolidated balance sheet data:
Working capital	$	216,727		$	65,556		$	248,284		$	150,846		$	137,238
Total assets		1,077,587			1,773,721			524,229			392,623			323,777
Long term debt		995,000			165,000			190,000			42,750			30,850
Total stockholder’s equity (deficit)		(79,771	)		1,033,361			68,140			167,418			139,747
The composition of stock-based compensation included above is as follows:
Cost of sales	$	2,502		$	2,668		$	2,947		$	2,613		$	1,636
Research and development		602			554			465			303			(138	)
Selling, general and administrative		8,977			7,902			8,625			3,833			3,848
Discontinued operations		16,517			23,899			4,372			3,052			792
	$	38,598		$	35,023		$	16,409		$	9,801		$	6,138

29

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The following management’s discussion and analysis of financial condition and results of operations, or MD&A, is intended to assist the reader in understanding our company. The MD&A is provided as a supplement to, and should be read in conjunction with the other sections of this Annual Report on Form 10-K, including “Item 1: Business”; “Item 1A: Risk Factors”, “Item 6: Selected Financial Data”; and “Item 8: Financial Statements and Supplemental Data.”

Background

We are a fully-integrated pharmaceutical company that develops, manufactures and markets injectable pharmaceutical products. We believe that we are the only independent U.S. public company with a primary focus on the injectable critical care, anti-infective and oncology markets, and we further believe that we offer one of the most comprehensive injectable product portfolios in the pharmaceutical industry. We manufacture products in each of the three basic forms in which injectable products are sold: liquid, powder and lyophilized, or freeze-dried.

Our products are generally used in hospitals, long-term care facilities, alternate care sites and clinics within North America. Unlike the retail pharmacy market for oral products, the injectable pharmaceuticals marketplace is largely made up of end users who have relationships with group purchasing organizations, or GPOs, and/or specialty distributors who distribute products within a particular end-user market, such as oncology clinics. GPOs and specialty distributors generally enter into collective product purchasing agreements with pharmaceutical suppliers in an effort to secure more favorable drug pricing on behalf of their members.

We began in 1996 with an initial focus on U.S. marketing and distribution of generic pharmaceutical products manufactured by others. In June 1998, we acquired Fujisawa USA, Inc.’s generic injectable pharmaceutical business, including manufacturing facilities in Melrose Park, Illinois and Grand Island, New York and a research and development facility in Melrose Park, Illinois. We also acquired additional assets in this transaction, including inventories, plant and equipment and abbreviated new drug applications that were approved by or pending with the FDA.

On April 18, 2006, we completed a merger with American BioScience, Inc., or ABI, our former parent. In connection with the closing of that merger, our certificate of incorporation was amended to change our original name of American Pharmaceutical Partners, Inc. to Abraxis BioScience, Inc. which we refer to as “Old Abraxis.” Old Abraxis was operated as two distinct business segments: the proprietary business and the hospital-based business.

Separation Agreement

On November 13, 2007, Old Abraxis separated into two independent publicly-traded companies: our company, APP Pharmaceuticals, Inc., which owns and operates the hospital-based business; and the other which owns and operates the proprietary business. We refer to the proprietary business following the separation as “New Abraxis,” which subsequently changed its name to Abraxis BioScience, Inc. We continue to operate the hospital-based business (which we refer to as “New APP” following the separation) under the name APP Pharmaceuticals, Inc.

New APP and New Abraxis entered into a series of agreements in connection with the separation, including a separation and distribution agreement, a transition services agreement, an employee matters agreement, a tax allocation agreement, a manufacturing agreement and various real estate leases. Please refer to Note 7—Related

30

Parties for additional information on the separation related agreements. Also, in connection with the separation, we incurred $1 billion of indebtedness and, in addition, entered into a $150 million revolving credit facility that is currently unused. $700 million of the proceeds from this indebtedness was contributed to New Abraxis, approximately $12 million was used to pay fees and expenses related to the debt financing and approximately $276 million of the proceeds was used to repay in full the then existing revolving credit facility. New APP is solely responsible for servicing the debt. The historical operating and cash flow results of New Abraxis are now presented as discontinued operations. Please refer to Note 3—Spin-off of New Abraxis, in the accompanying audited financial statements for further details.

31

RESULTS OF OPERATIONS

Overview

The following table sets forth the results of our operations for each of the three years ended December 31, and forms the basis for the following discussion of our operating activities:

	Year Ended December 31,									Change Favorable (Unfavorable)
										2007 vs. 2006					2006 vs. 2005
	2007			2006			2005			$			%		$			%
	(in thousands, except per share data and percentages)
Consolidated statements of operations data:
Net revenues
Critical care	$	382,772		$	302,244		$	163,581		$	80,528		27	%	$	138,663		84	%
Anti-infective		193,704			213,490			169,818			(19,786	)	-9	%		43,672		26	%
Oncology		55,308			57,872			51,084			(2,564	)	-4	%		6,788		13	%
Contract manufacturing and other		15,590			9,595			599			5,995		62	%		8,996		1501	%
Total net revenue		647,374			583,201			385,082			64,173		11	%		198,119		51	%
Cost of sales		332,046			288,079			203,436			(43,967	)	-15	%		(84,643	)	-42	%
Gross profit		315,328			295,122			181,646			20,206		7	%		113,476		- 63	%
Percent to total revenue		48.7	%		50.6	%		47.2	%
Operating expenses:
Research and development		46,497			27,787			18,454			(18,710	)	-67	%		(9,333	)	-51	%
Percent to total revenue		7.2	%		4.8	%		4.8	%
Selling, general and administrative		90,229			80,669			69,059			(9,560	)	-12	%		(11,610	)	-17	%
Percent to total revenue		13.9	%		13.8	%		17.9	%
Amortization of merger related intangibles		15,418			10,926			—			(4,492	)	-41	%		(10,926	)	—
Separation related costs		3,024			—			—			(3,024	)	—			—		—
Merger related in-process research and development charge		—			22,330			—			22,330		—			(22,330	)	—
Other merger related costs		—			12,613			7,863			12,613		—			(4,750	)	-60	%
Total operating expenses		155,168			154,325			95,376			(843	)	-1	%		(58,949	)	-62	%
Percent to total revenue		24.0	%		26.5	%		24.8	%
Income from operations		160,160			140,797			86,270			19,363		14	%		54,527		63	%
Percent to total revenue		24.7	%		24.1	%		22.4	%
Interest income and other		2,182			3,557			470			(1,375	)	-39	%		3,087		657	%
Interest expense		(25,162	)		(9,186	)		—			(15,976	)	174	%		(9,186	)	—
Minority interests		—			(11,383	)		(25,875	)		11,383		—			14,492		-56	%
Income from continuing operations before income taxes		137,180			123,785			60,865			13,395		11	%		62,920		103	%
Provision for income taxes from continuing operations		55,001			68,559			30,409			13,558		20	%		(38,150	)	-125	%
Net income from continuing operations		82,179			55,226			30,456		$	26,953		49	%	$	24,770		81	%
Percent to total revenue		12.7	%		9.5	%		7.9	%
Net loss from discontinued operations, net of taxes		(47,821	)		(102,123	)		(12,799	)
Net income (loss)	$	34,358		$	(46,897	)	$	17,657
Basic income (loss) per common share:
Continuing operations	$	0.51		$	0.35		$	0.19
Discontinued operations		(0.29	)		(0.65	)		(0.08	)
Net income (loss) per common share:	$	0.22		$	(0.30	)	$	0.11
Diluted income (loss) per common share:
Continuing operations	$	0.51		$	0.35		$	0.19
Discontinued operations		(0.30	)		(0.64	)		(0.08	)
Net income (loss) per common share:	$	0.21		$	(0.29	)	$	0.11
Weighted-average common shares outstanding:
Basic		159,643			158,937			157,694
Diluted		161,006			160,002			159,742

32

Operating Results

Net revenues

Net revenues for the year ending December 31, 2007 increased $64.2 million, or 11% to $647.4 million as compared to the same period of 2006. The increase was primarily due to twelve months of product sales in 2007 versus six months of product sales in 2006 related to the products we acquired in June 2006. The 11% increase in net revenues for the twelve months ended December 31, 2007 over the prior year period was comprised of a 9.6% unit volume increase and a 1.4% increase in unit prices. Excluding the impact of the product acquisition, net revenues of our core hospital-based products decreased $12.8 million for the twelve months ended December 31, 2007 to $466.7 million as compared to $479.5 million in the prior year.

Sales of critical care products for the twelve months ended December 31, 2007 increased $80.5 million, or 27%, to $382.8 million as compared to the same period in the prior year due primarily to increased volume, favorable pricing as a result of market conditions and the effects of twelve months of product sales in 2007 versus only six months of product sales in 2006 relating to the products we acquired in June 2006. Net revenues of anti-infective products for the twelve months ended December 31, 2007 decreased $19.8 million, or 9%, to $193.7 million due mainly to our cephalosporin products, which were on backorder during portions of the year due to the voluntary precautionary distribution holds we placed on product manufactured with certain materials. The required testing was completed, all internal issues have been satisfactorily resolved and we resumed distribution of these products in August 2007. Net revenues of oncology products for the twelve months ended December 31, 2007 decreased $2.6 million, or 4%, to $55.3 million mainly due to continued decreased demand for pamidronate as a result new competition in the market.

Net revenues in 2006 increased $198.1 million, or 51%, to $583.2 million as compared to the prior year. The increase was primarily due to product sales relating our acquired critical care products, favorable market conditions, newly launched products and stronger demand for products manufactured at our Melrose Park facility. Excluding the impact of the products acquired during the year, our product sales increased $94.4 million, or 25%, and was comprised of a 11% overall increase in price and a 4% increase in overall unit volume. Total sales for anti-infective products increased $43.7 million, or 26%, from the prior year due to newly launched antibiotics and strong demand for previously existing products. Total revenue for critical care products increased $138.7 million, or 84% from the prior year, due to $103.7 million of sales relating to products we acquired in June 2006, continued strong demand and favorable market conditions for existing products. Total revenue for oncology products increased by $6.8 million, or 13%, as compared to the prior year due to stronger demand for products manufactured at our Melrose Park facility. Contract manufacturing revenue increased to $9.6 million from $0.6 million in the prior year as a result of the resumption of contract manufacturing after the revalidation of the Melrose Park facility.

Gross profit

Gross profit for the twelve months ended December 31, 2007 was $315.3 million, or 48.7% of total revenue, inclusive of the recognition of a $16.4 million charge relating to the amortization of intangible product rights associated with the 2006 product purchase, as compared to $295.1 million, or 50.6% of total revenue, in the same period of 2006, inclusive of the recognition of the $11.8 million charge related to the one-time write-up of finished goods associated with the merger, and a $8.2 million charge relating to the amortization of 2006 intangible product rights. Excluding the non-cash items associated with the merger and the 2006 product acquisition, gross margin as a percentage of total revenue was 51.1% for the twelve months ended December 31, 2007 versus 54.0% for the prior year. The decline over the prior year was mainly attributable to the voluntary precautionary hold placed on our cephalosporin products as well as an extended maintenance shut down of one of our product lines at our Melrose Park facility. In addition, 2006 benefited from higher margins, relating primarily to the products acquired during the year.

Gross profit in 2006 was $295.1 million, or 50.6% of total revenue, inclusive of a $11.8 million charge related to the one-time write-up of finished goods inventory in the merger, and an $8.2 million charge relating to

33

the amortization of intangible product rights associated with the product rights purchased during the year. Gross profit in 2005 was $181.6 million, or 47.2% of total revenue. Excluding the impact of non-cash merger adjustments and non-cash items associated with the June product purchase, 2006 gross profit as a percentage of total revenue was 54.0%. The increase over the prior year was primarily due to the prior year extended Melrose Park revalidation process.

Research and development, or R&D

Research and development expense for the twelve months ended December 31, 2007 increased $18.7 million, or 67%, to $46.5 million as compared to the same period in 2006. The increase was due primarily to expense associated with the transfer of products to our Puerto Rico facility which is included in our results of operations for the entire twelve month period during 2007.

R&D expense increased by $9.3 million, or 51%, in 2006 to $27.8 million as compared to $18.5 million in 2005. The increase was primarily due to expense associated with the transfer of products to our Puerto Rico facility during the second half of 2006.

Selling, general and administrative, or SG&A

Selling, general and administrative expense for the twelve months ended December 31, 2007 increased $9.6 million to $90.2 million, or 13.9% net revenues, from $80.7 million, or 13.8% of net revenues, for the comparable period in 2006. The increase was due primarily to increased selling and marketing costs to support higher sales levels and expenses related to increased headcount to support our strategic initiatives.

SG&A expense increased $11.6 million, or 17%, in 2006 as compared to $69.1 million for the same period in 2005. The increase was due primarily to costs associated with increased headcount and compensation and higher professional fees. As a percentage of revenue, SG&A expenses decreased to 13.8% for the twelve months ended December 31, 2006, as compared to 17.9% for the twelve months ended December 31, 2005.

Amortization, merger and separation costs

The twelve months ended December 31, 2007 included $15.4 million of merger related amortization compared to approximately $10.9 million for the twelve months ended December 31, 2006 reflecting the merger between APP and ABI on April 18, 2006. The twelve months ended December 31, 2007 included $3.0 million in direct professional fees and transaction related costs relating to the separation of our proprietary business while the twelve months ended December 31, 2006 included $12.6 million in direct merger and transactions costs relating to the merger between APP and ABI. In addition, the twelve months ended December 31, 2006 included a $22.3 million charge relating to the step up of in process research and development associated with the merger between APP and ABI. 2005 included $7.9 million of direct merger and transaction related costs and professional fees.

Other income, other non-operating items

Interest income and other consists primarily of interest earned on invested cash, the impact of foreign currency charges on intercompany trading accounts and other financing costs. Interest income and other decreased to $2.2 million for the twelve months ended December 31, 2007 from $3.6 million for the comparable period in 2006.

Interest expense increased to $25.2 million for the twelve months ended December 31, 2007 as compared to $9.2 million for the twelve months ended December 31, 2006. The increase in interest expense was primarily the result of higher average debt levels and interest expense related to a note payable due in June 2007. There was no interest expense in 2005.

34

Minority interest charges represent the net earnings attributable to minority shareholders prior to the closing of the merger between APP and ABI. Subsequent to the merger, no minority interests charges have been recorded. The twelve-month period ended December 31, 2006 included a $11.4 million charge relating to minority interests, while the twelve month period ended December 31, 2005 included a charge relating to minority interests of $25.9 million. The decrease in 2006 was due to the timing of the merger between APP and ABI which occurred in April of 2006.

Provision for Income Taxes

Our effective tax rate for the year ended December 31, 2007 was 40.1%. Our tax rate for this period was favorably impacted by a $3.1 million reduction of reserves relating to FIN 48 due to the closure of IRS examinations for the 2004 and 2005 tax years. Excluding the impact of the FIN 48 adjustment, our effective tax rate would have been 42.4%. Our effective tax rates for the years ended December 31, 2006 and 2005 were 55.4% and 50.1%, respectively. These rates included the effects of addbacks of non-deductible minority interest of $11.4 million and $25.9 million, respectively. Without the minority interest, our tax rate would have been 45.0% and 33.8% in 2006 and 2005, respectively. The increase in the 2006 rate to 45.0% was due to non-deductible items associated with the merger between APP and ABI.

LIQUIDITY AND CAPITAL RESOURCES

Overview

The following table summarizes key elements of our financial position and sources and (uses) of cash and cash equivalents for the three years ended December 31, 2007:

	December 31, 2007			December 31, 2006			December 31, 2005
	(in thousands)
Summary Financial Position:
Cash, cash equivalents and short-term investments	$	31,788		$	39,297		$	83,273
Working capital	$	216,727		$	65,556		$	248,284
Total assets	$	1,077,587		$	1,773,721		$	524,229
Total stockholders’ equity (deficit)	$	(79,771	)	$	1,033,361		$	68,140
	Twelve Months Ended December 31
	2007			2006			2005
	(in thousands)
Summary of Sources and (Uses) of Cash and Cash Equivalents:
Operating activities	$	12,353		$	324,977		$	34,466
Purchase of property, plant and equipment	$	(86,160	)	$	(84,486	)	$	(51,107	)
Purchase of product license rights and other	$	(2,862	)	$	(342,769	)	$	(4,085	)
Sale of short-term investments	$	—		$	54,455		$	12,020
Financing activities	$	66,893		$	59,391		$	33,872

Sources and Uses of Cash

Operating Activities

Cash flow from operations has been our primary source of liquidity. Net cash provided by operating activities was $12.4 million for the twelve months ended December 31, 2007 as compared to cash provided of

35

$325.0 million for the same period in 2006. This $312.6 million decrease in cash provided by operating activities for the 2007 period was due primarily to the transfer of assets associated with the spin-off of our proprietary business and the fact that the 2006 period included the receipt of $200.0 million associated with the Abraxane co-promotion with AstraZeneca, and non-cash expenses associated with the prior merger with ABI, which included amortization of merger related intangibles and in-process research and development charges.

Net cash provided by operations was $325.0 million for the period ended December 31, 2006 as compared to $34.5 million in 2005. The $290.5 million increase in 2006 cash provided by operating activities was due primarily to the recognition of deferred revenue relating to the AstraZeneca product purchase and non-cash expenses associated with the prior merger with ABI, which included amortization of merger related intangibles and in-process research and development charges.

Investing Activities

Our investing activities have included capital expenditures necessary to expand and maintain our manufacturing capabilities and infrastructure and outlays necessary to acquire various product or intellectual property rights. Cash used in investing activities during the twelve months ended December 31, 2007 included approximately $32.5 million relating to the acquisition of our manufacturing facility in Puerto Rico as well as approximately $53.7 million relating to the purchase of property, plant and equipment primarily as investment in our core manufacturing and development capabilities, including the purchase of a manufacturing facility in Phoenix which was distributed to New Abraxis in connection with the separation. Cash used in investing activities for the twelve months ended December 31, 2006 primarily related to the purchase of product rights from AstraZeneca, and the purchase of property, plant and equipment, primarily as investment in the core manufacturing and development capability and the purchase of an aircraft. This was partially offset by $54.5 million of sales of short term municipal variable rate demand notes.

Net cash used for the acquisition of property, plant and equipment totaled $86.2, $84.5 million and $51.1 million, in 2007, 2006, and 2005, respectively. The 2006 increase over 2005 was due primarily to the purchase of an aircraft and increased capital investment in our core manufacturing and development capabilities. Net cash used for the acquisition of product license rights totaled $0, $328.8 million, and $4.1 million in 2007, 2006, and 2005, respectively. The 2006 increase resulted from the purchase of product rights from AstraZeneca.

Financing Activities

Financing activities generally include borrowings under our credit facility, the issuance or repurchase of our common stock and proceeds from the exercise of employee stock options. Net cash provided by financing activities was $66.9 million for the twelve months ended December 31, 2007, which included issuance of $1 billion of debt as a result of the separation, issuance of other debt of $366 million, reduced by repayment of borrowings of $531 million and notes payable of $67 million. The $696.4 million outflow includes a $700 million of cash distributed to New Abraxis as part of the separation.

Net cash provided by financing activities was $59.4 million in 2006 which represented an increase in notes payable associated with the AstraZeneca product rights purchase of $72.2 million and proceeds relating to stock transactions of $13.9 million being partially offset by net repayments on borrowings of $25.0 million.

Net cash provided by financing activities totaled $33.9 million in 2005 and consisted of $147.3 million in net proceeds under our credit facilities and $30.4 million in proceeds relating to employee stock plans and related tax benefits. Partially offsetting these proceeds were the repurchase for $67.5 million of shares of ABI’s common stock, the repurchase for $55.7 million of all outstanding shares of ABI’s Series A and B preferred stock. In June 2005, Dr. Soon-Shiong, ABI’s controlling shareholder, sold to ABI his entire ownership interest in Transplant Research Institute, or TRI, comprising all of the outstanding capital stock of TRI, in exchange for $20.0 million in cash.

36

Sources of Financing and Capital Requirements

We have historically funded our research and development activities through product license fees, including milestones, and borrowings, whereas our primary source of liquidity has been cash flow from operations.

Sources of Financing and Capital Requirements

We have historically financed our operations primarily through cash flow from operations and borrowings under our previous lines of credit.

Credit Agreement

On November 13, 2007, we, our operating subsidiary APP Pharmaceuticals, LLC (“New APP LLC”) and APP Pharmaceuticals Manufacturing, LLC, a wholly-owned subsidiary of New APP LLC (“P.R. Borrower” and together with New APP LLC, the “Borrowers”) entered into a senior secured credit agreement (as amended, the “Credit Agreement”) with certain lenders and Deutsche Bank AG New York Branch, as Administrative Agent. The Credit Agreement provides for two term loan facilities: a Term Loan A facility for $500 million and a Term Loan B facility for $500 million. The Credit Agreement also provides for a revolving credit facility of $150 million. A portion of the proceeds from the debt financing was used to repay our existing indebtedness and $700 million was contributed to New Abraxis immediately prior to the separation.

The term loan facilities mature on November 13, 2013, and the revolving credit facility matures on November 13, 2012. The Term Loan A facility amortizes based on the following schedule: 0% in year one; 2.5% in year two; 10% in year three; 15% in year four; 20% in year five; and 52.5% in year six. The Term Loan B facility amortizes 1% in each of the first six years, with a balloon payment due at maturity. Amounts drawn under the term loan facilities or revolving credit facility bear the following annual interest rates: for the Term Loan A facility and the revolving credit facility, a rate at either an adjusted LIBOR, plus a margin of 2.25%, or an alternate base rate plus a margin of 1.25%; and for the Term loan B facility, a rate at either an adjusted LIBOR, plus a margin of 2.50%, or an alternate base rate plus a margin of 1.50%. The revolving credit facility includes a $40 million sub-limit for swingline loans and a $20 million sub-limit for letters of credit. The interest rate margins are subject to step downs based on, among other things, our total leverage ratio. Effective February 14, 2008, we entered into interest rate swap agreements with an aggregate notional principal amount of $990 million to pay interest at a fixed rate of 3.04% and to receive interest at variable rate of one-month LIBOR. The interest rate swaps expire in February 2009.

The Credit Agreement contains a number of negative covenants restricting, among other things, indebtedness, liens, merger or transfer of substantially all assets of our company or the Borrowers, asset dispositions, distributions, dividends and repurchases of capital stock, prepayment or modification of certain other debt, acquisitions and investments, affiliate transactions, and limitations on dividends or other payments to subsidiaries or the parent company, APP Pharmaceuticals, Inc. We are required to comply with a senior secured leverage ratio test. The Credit Agreement contains customary events of default.

Beginning in December 2008, the Credit Agreement requires the Borrowers to prepay any outstanding loans, subject to specified exceptions, with (i) 50% of excess cash flow (with step downs to 0% based on our total leverage ratio), (ii) 100% of the net proceeds of non-ordinary course asset sales and any insurance or condemnation proceeds (with step downs to 75% based on our total leverage ratio), and (iii) 100% of the proceeds of any indebtedness not otherwise permitted to be incurred or issued under the Credit Agreement, subject to our total leverage ratio.

The obligations of New APP LLC under the term loan facilities and revolving credit facility are unconditionally guaranteed on a senior secured basis by our company and each direct and indirect wholly-owned domestic restricted subsidiary of New APP LLC (each, a “Subsidiary Guarantor”). The obligations of P.R.

37

Borrower are unconditionally guaranteed by our company, New APP LLC and each future wholly-owned subsidiary of P.R. Borrower (each, a “P.R. Subsidiary Guarantor). The obligations and guarantees of the Borrowers are secured by a first-priority security interest in substantially all tangible and intangible assets (including a pledge of capital stock, limited to 65% for pledges of stock of foreign subsidiaries) of our company, New APP LLC and each Subsidiary Guarantor and, in the case of P.R. Borrower, such assets of P.R. Borrower and P.R. Subsidiary Guarantor.

Capital Requirements

Our future capital requirements will depend on numerous factors, including:

• the obligations placed upon our company from our credit agreement discussed above, including any debt covenants related to those obligations;

• working capital requirements and production, sales, marketing and development costs required to support our business;

• the need for manufacturing expansion and improvement;

• the transfer of products to our Puerto Rico manufacturing facility;

• the requirements of any potential future acquisitions, asset purchases or equity investments; and

• the amount of cash generated by operations, including potential milestone and license revenue.

We anticipate that cash and short-term investments, cash generated from operations and funds available under our credit facility will be sufficient to finance operations of our company, including ongoing, product development and capital expenditures for at least the next twelve months. In the event we engage in future acquisitions or capital projects, we may have to raise additional capital through additional borrowings or the issuance of debt or equity securities.

As described further above, we are responsible for servicing the debt of $1 billion incurred in connection with the separation. We expect to pay the principal and interest on the outstanding debt with funds generated by our operations. Our ability to meet our debt service obligations will depend on our future performance, which will be affected by financial, business, economic and other factors, including potential changes in customer preferences, the success of product and marketing innovations and pressure from competitors. If we do not have enough money to pay our debt service obligations, we may be required to refinance all or part of our existing debt, sell assets or borrow more money. We may not be able to, at any given time, refinance this debt, sell assets or borrow more money on terms acceptable to us or at all, the failure to do any of which could have adverse consequences for our business, financial condition and results of operations.

Contractual Obligations and Off-Balance Sheet Arrangements

Contractual obligations represent future cash commitments and liabilities under agreements with third parties, and exclude contingent liabilities for which we cannot reasonably predict future payment. The following information summarizes our contractual obligations and other commitments, including credit facilities and operating leases, as of December 31, 2007:

	Payments due by period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(in thousands)
Credit facility principal repayments (excluding interest)		1,000,000		5,000		72,500		185,000		737,500
Operating lease obligations		23,820		7,384		9,441		4,013		2,982
Total	$	1,023,820	$	12,384	$	81,941	$	189,013	$	740,482

We do not currently have any off-balance sheet arrangements that are material or reasonably likely to be material to our financial position or results of operations.

38

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates in our unaudited condensed consolidated financial statements are discussed below. Actual results could vary from those estimates.

Revenue Recognition

Product Revenue Recognition

We recognize revenue from the sale of a product and for contract manufacturing when title and risk of loss have transferred to the customer, collection is reasonably assured and we have no further performance obligation. This is typically when the product is received by the customer. At the time of sale, as further described below, we reduce sales and provide for estimated chargebacks, contractual allowances or customer rebates, product returns and customer credits and cash discounts. Our methodology used to estimate and provide for these sales provisions was consistent across all periods presented. Accruals for sales provisions are presented in our financial statements as a reduction of revenue and accounts receivable and, for contractual allowances, an increase in accrued liabilities. We regularly review information related to these estimates and adjust our reserves accordingly if, and when, actual experience differs from estimates.

We have internal historical information on chargebacks, rebates and customer returns and credits which we use as the primary factor in determining the related reserve requirements. As further described below, due to the nature of our injectable products and their primary use in hospital and clinical settings with generally consistent demand, we believe that this internal historical data, in conjunction with periodic review of available third-party data and updated for any applicable changes in available information provides a reliable basis for such estimates.

We periodically review the wholesale supply levels of our more significant products by reviewing inventory reports purchased or available from wholesalers, evaluating our unit sales volume, and incorporating data from third-party market research firms. Based on these activities, we attempt to keep a consistent wholesale stocking level of approximately two- to six-weeks across our hospital-based products. The buying patterns of our customers do vary from time to time, both from customer to customer and product to product, but we believe that historic wholesale stocking or speculative buying activity in our hospital-based distribution channels has not had a significant impact on our historic sales comparisons or sales provisions.

Sales Provisions

Our sales provisions totaled $1,080.1 million, $759.9 million and $573.8 million for the year ended December 31, 2007, 2006 and 2005, respectively, and related reserves totaled $125.1 million, $112.5 million and $84.5 million at December 31, 2007, 2006 and 2005, respectively.

Chargebacks

Following industry practice, we typically sell our products to independent pharmaceutical wholesalers at wholesale list price. The wholesaler in turn sells our products to an end user, normally a hospital or alternative healthcare facility, at a lower contractual price previously established between us and the end user via a group purchasing organization, or GPO. GPOs enter into collective purchasing contracts with pharmaceutical suppliers to secure more favorable product pricing on behalf of their end-user members.

Our initial sale to the wholesaler, and the resulting receivable, are recorded at our wholesale list price. However, as most of these selling prices will be reduced to a lower end-user contract price, at the time of sale revenue is reduced by, and a provision recorded for, the difference between the list price and estimated end-user

39

contract price multiplied by the estimated wholesale units outstanding pending chargeback that will ultimately be sold under end-user contracts. When the wholesaler ultimately sells the product to the end user at the end-user contract price, the wholesaler charges us, a chargeback, for the difference between the list price and the end-user contract price and such chargeback is offset against our initial estimated contra asset. The most significant estimates inherent in the initial chargeback provision relate to wholesale units pending chargeback and the ultimate end-user contract-selling price. We base our estimation for these factors primarily on internal, product-specific sales and chargeback processing experience, estimated wholesaler inventory stocking levels, current contract pricing, IMS data and our expectation for future contract pricing changes.

Our net chargeback reserve totaled $101.2 million and $92.4 million at December 31, 2007 and 2006, respectively. Due to information constraints in the distribution channel, it has not been practical, and has not been necessary, for us to capture and quantify the impact of current versus prior year activity on the chargeback provision. Information constraints within the distribution channel primarily relate to our inability to track product through the channel on a unit or specific lot basis. In addition, for the most part, we do not receive information from our customers with respect to what level of their sales are subject to chargeback. The lack of information on a specific lot basis precludes us from tracking actual chargeback activity to the period of our initial sale. As a result, we rely on internal data, external IMS data and management estimates in order to estimate the amount of product in the channel subject to future chargeback. The amount of product in the channel is comprised of physical inventory at the wholesaler and product that the wholesaler has yet to report as end user sales. We estimate yet to be reported end user sales based on a historical average number of days to process chargeback activities from the date of the end user sale. We also review current year chargeback activity to determine whether material changes in the provision relate to prior period sales; such changes have not been material to our statements of operations. A one percent decrease in our estimated end-user contract-selling prices would reduce total revenue for the year ended December 31, 2007 by $0.2 million and a one percent increase in wholesale units pending chargeback at December 31, 2007 would decrease total revenue for the year ended December 31, 2007 by $0.5 million.

Contractual Allowances, Returns and Credits, Cash discounts and Bad Debts

Contractual allowances, generally rebates or administrative fees, are offered to certain wholesale customers, GPOs and end-user customers, consistent with pharmaceutical industry practices. Settlement of rebates and fees may generally occur from one to 15 months from date of sale. We provide a general provision for contractual allowances at the time of sale based on the historical relationship between sales and such allowances. Upon receipt of chargeback, due to the availability of product and customer specific information on these programs, we then establish a specific provision for fees or rebates based on the specific terms of each agreement. Our reserve for contractual allowances totaled $10.1 million and $16.6 million at December 31, 2007 and 2006, respectively. A one percent increase in the estimated rate of contractual allowances to total revenue at December 31, 2007 would decrease net revenues by $0.8 million at that point in time. Contractual allowances are reflected in the financial statements as a reduction of total revenue and as a current accrued liability.

Consistent with industry practice, our return policy permits our customers to return products within a window of time before and after the expiration of product dating. We provide for product returns and other customer credits at the time of sale by applying historical experience factors generally based on our historic data on credits issued by credit category or product, relative to related sales and we provide specifically for known outstanding returns and credits. Our reserve for customer credits and product returns totaled $8.8 million and $9.8 million at December 31, 2007 and 2006, respectively. At December 31, 2007, a one percent increase in the estimated reserve requirements for customer credits and product returns would have decreased total revenue for the year ended December 31, 2007 by $1.7 million.

We generally offer our customers a standard cash discount on our hospital-based products for prompt payments and, from time-to-time, may offer a greater discount and extended terms in support of product launches or other promotional programs. A provision for cash discounts is established at the time of sale based on the terms of sale and adjusted for historical experience factors on the level of cash discount taken.

40

We establish a reserve for bad debts based on general and identified customer credit exposure. Our historic bad debt losses have been insignificant.

Inventories

Inventories consist of products currently approved for marketing and may include certain products pending regulatory approval. From time to time, we capitalize inventory costs associated with products prior to regulatory approval based on our judgment of probable future commercial success and realizable value. Such judgment incorporates our knowledge and best judgment of where the product is in the regulatory review process, our required investment in the product, market conditions, competing products and our economic expectations for the product post-approval relative to the risk of manufacturing the product prior to approval. If final regulatory approval for such products is denied or delayed, we may need to provide for and expense such inventory.

We routinely review our inventory and establish reserves when the cost of the inventory is not expected to be recovered or our product cost exceeds realizable market value. In instances where inventory is at or approaching expiry, is not expected to be saleable based on our quality and control standards or for which the selling price has fallen below cost, we reserve for any inventory impairment based on the specific facts and circumstances. In evaluating the market value of inventory pending regulatory approval as compared to its cost, we consider the market, pricing and demand for competing products, our anticipated selling price for the product and the position of the product in the regulatory review process. Provisions for inventory reserves are reflected in the financial statements as an element of cost of sales with inventories presented net of related reserves.

Expense Recognition

Cost of sales represents the costs of the products which we have sold and consists of labor, raw materials, components, packaging, quality assurance and quality control, shipping and manufacturing overhead costs and the cost of finished products purchased from third parties. In addition, for the years ended December 31, 2007 and 2006, cost of sales included amortization of product rights purchased in June 2006 of $16.4 million and $8.2 million, respectively. The year ended December 31, 2006 also included a $11.8 million charge related to the one-time write-up of finished goods associated with the merger.

Research and development costs are expensed as incurred or consumed and consist primarily of salaries and other personnel-related expenses, as well as depreciation of equipment, allocable facility, raw material and production expenses and contract and consulting fees. Research and development costs also include costs associated with our Puerto activities prior to commercial production.

Selling, general and administrative expenses consist primarily of salaries, commissions and other personnel-related expenses, as well as costs for travel, trade shows and conventions, promotional material and catalogs, advertising and promotion, facilities, risk management and professional fees.

Stock-Based Compensation

We account for stock based compensation in accordance with FAS 123R, which requires the recognition of compensation cost for all share-based payments (including employee stock options) at fair value. Effective January 1, 2006, we adopted the provisions of FAS 123R. We use the straight-line attribution method to recognize share-based compensation expenses over the applicable vesting period of the award. Options currently granted generally expire ten years from the grant date and vest ratably over a four year period while restricted stock units currently granted under the 2001 Stock Plan general vest ratably over a four year period. Awards under the APP Pharmaceuticals, Inc. Restricted Stock Unit Plan (the “RSU Plan”) vest with respect to one half of the units on the second anniversary of the 2006 Merger and with respect to the remaining one half of the units on the fourth anniversary of the 2006 Merger. Excluding the effects of discontinued operations, pre-tax stock-based compensation costs for the year ended December 31, 2007, 2006 and 2005 were $12.1 million, $11.1 million and $12.0 million, respectively.

41

To determine stock-based compensation, we use the Black-Scholes option pricing model to estimate the fair value of options granted under equity incentive plans and rights to acquire stock granted under our stock participation plan. Compensation expense related to equity awards of restricted stock units is based upon the market price on the date of the grant. Stock compensation expense charged to earnings on a straight-line basis over the applicable vesting period. Awards under the RSU Plan entitle the holders on each vesting date to convert the vested portion of their awards into that number of shares of our common stock equal to the value of the vested portion of the award divided by the lower of (i) the average closing price of our common stock over the three consecutive trading days ending on and including the second full trading day preceding the vesting date and (ii) $14.47 (which is the adjusted price following the separation). Accordingly, compensation expense related to the RSU Plan is based on the lower of the market price or $14.47 and is expensed under the liability method in accordance with FAS 123(R) on a straight-line basis over the applicable vesting period.

Income taxes

Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as net operating loss and capital loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated financial statements in the period that includes the legislative enactment date.

In 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No. 109” (“FIN 48”), which provides specific guidance on the financial statement recognition, measurement, reporting and disclosure of uncertain tax positions taken or expected to be taken in a tax return. FIN 48 addresses the determination of whether tax benefits, either permanent or temporary, should be recorded in the financial statements. We adopted FIN 48 as of January 1, 2007 and as a result recognized a $0.1 million increase to retained earnings from the cumulative effect of adoption.

As of December 31, 2007, the total amount of gross unrecognized tax benefits, which are reported in other liabilities in our unaudited condensed consolidated balance sheet, was $3.0 million. This entire amount would impact our effective tax rate over time, if recognized. In addition, we accrue interest and any necessary penalties related to unrecognized tax positions in our provision for income taxes.

Our effective tax rate for the years ended December 31, 2007 was 40.1%. Our tax rate during the year ended December 31, 2007 was favorably impacted by a $3.1 million net reduction of reserves relating to FIN 48 due to closure of IRS examinations for the 2004 and 2005 tax years. Excluding the impact of the FIN 48 adjustment, our effective tax rate for the year ended December 31, 2007 would have been 42.1%.

We or one of our subsidiaries files income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. In the second quarter of 2007, the Internal Revenue Service (IRS) concluded an examination of our U.S. income tax returns for tax years 2004 and 2005. This resulted in our paying approximately $0.5 million of assessed tax resulting from our method of inventory capitalization. This amount was fully reserved. In addition, we recently received a “no adjustment” closing letter from the IRS in regard to an audit for our former previous parent company (American BioScience, Inc.) related to a 2002 net operating loss carry back to consolidated tax years 1997, 1998, 1999, 2000 and 2001. The Illinois Department of Revenue has commenced an audit of the Combined Unitary Tax Returns for tax years 2003 through 2005. The previous Illinois audit for tax years 2000, 2001, and 2002 resulted in a refund of approximately $2.3 million. In addition, we have received notice of intent to examine income tax returns from California (tax years 2004-2006), Massachusetts (2005-2006) and North Carolina (2003-2006). The California and Massachusetts audits began in the fourth quarter of 2007, and the North Carolina audit is anticipated to begin in the first quarter of 2008. There are no other open federal, state, or foreign government income tax audits at this time.

42

Acquisitions

Our consolidated financial statements and results of operations reflect an acquired business after the completion of the acquisition. We account for acquired businesses using the purchase method of accounting, which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Amounts allocated to acquired IPR&D are expensed at the date of acquisition. When we acquire net assets that do not constitute a business under generally accepted accounting principles in the U.S. (GAAP), no goodwill is recognized.

The judgments made in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact our results of operations. Accordingly, for significant items, we typically obtain assistance from third-party valuation specialists. The valuations are based on information available near the acquisition date and are based on expectations and assumptions that have been deemed reasonable by management.

Determining the useful life of an intangible asset also requires judgment, as different types of intangible assets will have different useful lives and certain assets may even be considered to have indefinite useful lives. For example, the useful life of the right associated with a pharmaceutical product’s exclusive patent will be finite and will result in amortization expense being recorded in our results of operations over a determinable period. However, the useful life associated with a brand that has no patent protection but that retains, and is expected to retain, a distinct market identity could be considered to be indefinite and the asset would not be amortized.

Impairment of long-lived assets

We review all of our long-lived assets, including goodwill and other intangible assets, for impairment indicators at least annually and we perform detailed impairment testing for goodwill annually and for all other long-lived assets whenever impairment indicators are present. Examples of those events or circumstances that may be indicative of impairment include:

• A significant adverse change in legal factors or in the business climate that could affect the value of the asset, including, by way of example, a successful challenge of our patent rights resulting in generic competition earlier than expected.

• A significant adverse change in the extent or manner in which an asset is used, including, by way of example, restrictions imposed by the FDA or other regulatory authorities that affect our ability to manufacture or sell a product.

• A projection or forecast that demonstrates losses associated with an asset, including, by way of example, a change in a government reimbursement program that results in an inability to sustain projected product revenues or profitability or the introduction of a competitor’s product that results in a significant loss of market share.

The value of intangible assets is determined primarily using the “income method,” which starts with a forecast of all expected future net cash flows. Accordingly, the potential for impairment for intangible assets may exist if actual revenues are significantly less than those initially forecasted or actual expenses are significantly more than those initially forecasted. Some of the more significant estimates and assumptions inherent in the intangible asset impairment estimation process include: the amount and timing of projected future cash flows; the discount rate selected to measure the risks inherent in the future cash flows; and the assessment of the asset’s life cycle and the competitive trends impacting the asset, including consideration of any technical, legal, regulatory, or economic barriers to entry as well as expected changes in standards of practice for indications addressed by the asset.

43

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2007, the FASB issued Statement No. 141(R), “Business Combination” (SFAS 141R) and Statement No. 160, “Accounting and Reporting of Noncontrolling Interest in Consolidated Financial Statements, an Amendment of ARB No. 51 (SFAS 160). These new standards will significantly change the accounting for and reporting of business combination transactions and noncontrolling (minority) interests consolidated financial statements. SFAS 141R and SFAS 160 are required to be adopted simultaneously and are effective for the first annual reporting period beginning on or after December 15, 2008. Earlier application is not permitted. SFAS 141R and SFAS 160 could have a significant impact on our accounting for future business combinations and other business arrangements after the implementation of these statements.

In June 2007, the FASB ratified the consensus reached by the EITF on EITF Issue No. 07-3, “Accounting for Nonrefundable Advance Payments for Goods or Services Received for Use in Future Research and Development Activities” (or “EITF 07-3”). EITF 07-3 states that nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities should be deferred or capitalized. Such amounts should be recognized as an expense as the related goods are delivered or the related services performed. If an entity does not expect the goods to be delivered or services to be rendered, the capitalized advance payment should be charged to expense. EITF 07-3 is effective for fiscal years beginning after December 15, 2007 and earlier application is not permitted. We occasionally enter into agreements for research and development of goods and service. We are presently evaluating the impact that the adoption of EITF 07-3 will have on our condensed consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115.” SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected will be recognized in earnings at each subsequent reporting date. SFAS No. 159 is effective for our company January 1, 2008. We are evaluating the impact that the adoption of SFAS No. 159 will have on our consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157 which redefines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (“GAAP”), and expands disclosures about fair value measurements. SFAS No. 157 applies where other accounting pronouncements require or permit fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The effects of adoption will be determined by the types of instruments carried at fair value in our financial statements at the time of adoption as well as the methods utilized to determine their fair values prior to adoption. Based on our current use of fair value measurements, SFAS No. 157 is not expected to have a material effect on our results of operations or financial position.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks associated with changes in interest rates and foreign currency exchange rates. Interest rate changes affect primarily our debt obligations and our investments in marketable securities. Changes in foreign currency exchange rates can affect our operations outside of the United States.

Interest Rate Risk: We are exposed to changes in interest rates on our borrowings. We have credit facilities totaling $1 billion as well as an unused $150 million revolving credit facility, all of which were outstanding as of December 31, 2007 and all of which bear interest at a variable rate. Effective February 14, 2008, we entered into interest rate swap agreements with an aggregate notional principal amount of $990 million to pay interest at a fixed rate of 3.04% and to receive interest at variable rate of one-month LIBOR. The interest rate swaps expire in February 2009. We formally designated these swaps as a hedge of our exposure to variability in future cash flows attributable to the LIBOR interest payments due on the credit facilities. Changes in fair values of the interest rate swaps are recorded in comprehensive income in our balance sheet each period. Because the terms of the swap and the LIBOR debt coincide (notional amount, interest rate reset dates, and underlying index), there are no other

44

basis differences and the likelihood of swap counterparty default is not probable, the hedge is expected to exactly offset changes in expected cash flows due to fluctuations in the LIBOR rate over the term of the swap agreements and there is no source of ineffectiveness. The effectiveness of the hedge relationship will be periodically assessed during the life of the hedge by comparing the current terms of the swap and the debt to assure they continue to coincide and through an evaluation of the continued ability of the counterparty to the swap to honor its obligations under the swap.

If our interest rates were to increase 1% in 2008 as compared to the weighted average interest rate in 2007, our interest expense for 2008 would increase $10 million based on our outstanding debt balances at December 31, 2007

Foreign Currency Risk: We have operations in Canada, however, both revenue and expenses of our Canadian operations are typically denominated in the currency of the country of operations, providing a partial hedge. Nonetheless, these foreign subsidiaries are presented in our financial statement in U.S. dollars and can be impacted by foreign currency exchange fluctuations through both (i) translation risk, which is the risk that the financial statements for a particular period or as of a certain date depend on the prevailing exchange rates of the various currencies against the U.S. dollar, and (ii) transaction risk, which is the risk that the currency impact of transactions denominated in currencies other than the subsidiaries functional currency may vary according to currency fluctuations.

With respect to translation risk, even though there may be fluctuations of currencies against the U.S. dollar, which may impact comparisons with prior periods, the translation impact is included in accumulated other comprehensive income, a component of stockholders’ equity, and does not affect the underlying results of operations. Gains and losses related to transactions denominated in a currency other than the functional currency of the countries in which we operate are included in the consolidated statements of operations. As of December 31, 2007, there were no outstanding hedge arrangements.

Investment Risk: The primary objectives of our investment program are the safety and preservation of principal, maintaining liquidity to meet operating and projected cash flow requirements, and maximizing return on invested funds, while diversifying risk. Some of the securities that we invest in may have interest rate risk. This means that a change in prevailing interest rates may cause the fair value of the principal amount of the investment to fluctuate. For example, if we hold a security that was issued with a fixed interest rate at the prevailing rate and the prevailing rate later rises, the fair value of the principal amount of our investment will probably decline.

To minimize this risk, we maintain an investment portfolio of cash equivalents and short-term investments consisting of high credit quality securities, including money market funds, commercial paper, government and non-government debt securities. We do not use derivative financial instruments. The average maturity of the debt securities in which we invest has been less than 90 days and the maximum maturity has been three months.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this item is incorporated herein by reference to the financial statements and schedule listed in Item 15 (a)1 and (a)2 of Part IV and included in this Form 10-K Annual Report.

45

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of APP Pharmaceuticals, Inc.

We have audited the accompanying consolidated balance sheets of APP Pharmaceuticals, Inc. and subsidiaries (previously known as Abraxis BioScience, Inc.) as of December 31, 2007 and 2006, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2007. Our audits also included the financial statement schedule included in the Index at Item 15(a). These financial statements and schedule are the responsibility of company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of APP Pharmaceuticals, Inc. and subsidiaries at December 31, 2007 and 2006, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2007, in conformity with U.S. generally accepted accounting principles. Also, in our opinion the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), APP Pharmaceuticals, Inc.’s internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 17, 2008 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Chicago, Illinois

March 17, 2008

46

APP Pharmaceuticals, Inc.

Consolidated Balance Sheets

	December 31, 2007			December 31, 2006
	(in thousands, except share data)
Assets
Current assets:
Cash and cash equivalents	$	31,788		$	39,297
Accounts receivable, less allowances for doubtful accounts of $100 in 2007 and 2006, and net chargebacks of $101,177 and $92,427 in 2007 and 2006		85,209			84,684
Inventories		149,191			218,280
Prepaid expenses and other current assets		13,531			15,570
Current receivables from related parties		6,996
Deferred income taxes		17,109			27,168
Total current assets		303,824			384,999
Property, plant and equipment, net		132,528			217,819
Investment in Drug Source Company, LLC		—			5,504
Intangible assets, net of accumulated amortization of $51,336 and $47,482 in 2007 and 2006		463,154			738,440
Goodwill		160,239			401,600
Non-current receivables from related parties		—			39
Deferred financing costs and other non-current assets, net of accumulated amortization of $299 and $281 in 2007 and 2006		17,842			25,320
Total assets	$	1,077,587		$	1,773,721
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Accounts payable	$	36,502		$	65,471
Accrued liabilities		45,595			61,428
Income taxes payable		—			80,054
Deferred revenue		—			39,225
Minimum royalties payable		—			1,017
Notes payable		—			72,248
Short term portion of debt		5,000			—
Total current liabilities		87,097			319,443
Long-term debt		995,000			165,000
Deferred income taxes, non-current		71,011			90,776
Long-term portion of deferred revenue		—			158,135
Other non-current liabilities		4,250			7,006
Total liabilities		1,157,358			740,360
Stockholders’ equity (deficit):
Common stock—$0.001 par value; 350,000,000 shares authorized;
160,069,196 and 165,928,134 shares issued in 2007 and 2006		160			166
Additional paid-in capital		(96,357	)		1,085,196
Retained earnings		13,715			4,483
Accumulated other comprehensive income		2,711			1,257
Less treasury stock at cost, 6,705,116 common shares were outstanding in 2006		—			(57,741	)
Total stockholders’ (deficit) equity		(79,771	)		1,033,361
Total liabilities and stockholders’ equity (deficit)	$	1,077,587		$	1,773,721

47

APP Pharmaceuticals, Inc.

Consolidated Statements of Operations

	Year ended December 31,
	2007			2006			2005
	(in thousands, except per share data)
Net revenue	$	647,374		$	583,201		$	385,082
Cost of sales		332,046			288,079			203,436
Gross profit		315,328			295,122			181,646
Operating expenses:
Research and development		46,497			27,787			18,454
Selling, general and administrative		90,229			80,669			69,059
Amortization of merger related intangibles		15,418			10,926			—
Separation related costs		3,024			—			—
Merger related in-process research and development charge		—			22,330			—
Other merger related costs		—			12,613			7,863
Total operating expense		155,168			154,325			95,376
Income from operations		160,160			140,797			86,270
Interest income and other		2,182			3,557			470
Interest expense		(25,162	)		(9,186	)		—
Minority interests		—			(11,383	)		(25,875	)
Income from continuing operations before income taxes		137,180			123,785			60,865
Provision for income taxes from continuing operations		55,001			68,559			30,409
Net income from continuing operations		82,179			55,226			30,456
Net loss from discontinued operations, net of taxes		(47,821	)		(102,123	)		(12,799	)
Net income (loss)	$	34,358		$	(46,897	)	$	17,657
Basic income (loss) per common share:
Continuing operations	$	0.51		$	0.35		$	0.19
Discontinued operations		(0.29	)		(0.65	)		(0.08	)
Net income (loss) per common share:	$	0.22		$	(0.30	)	$	0.11
Diluted income (loss) per common share:
Continuing operations	$	0.51		$	0.35		$	0.19
Discontinued operations		(0.30	)		(0.64	)		(0.08	)
Net income (loss) per common share:	$	0.21		$	(0.29	)	$	0.11
The composition of stock-based compensation from continuing operations included above is as follows:
Cost of sales	$	2,502		$	2,668		$	2,947
Research and development		602			554			465
Selling, general and administrative		8,977			7,902			8,625
	$	12,081		$	11,124		$	12,037

48

APP Pharmaceuticals, Inc.

Consolidated Statements of Stockholders’ Equity

Years Ended December 31, 2007, 2006 and 2005

	Series A Preferred Stock					Series B Preferred Stock					Common Stock					Additional Paid-in Capital			Retained Earnings (Deficit)			Other Comprehensive Income (Loss)			Treasury Stock					Total
	Shares		Amount			Shares		Amount			Shares		Amount												Shares		Amount
	(in thousands)
Balance, January 1, 2005	10,000,000		$	10,000		22,500,000		$	22,500		172,888,327		$	173		$	137,062		$	53,723		$	234		(6,646,398	)	$	(56,274	)	135,322
Effect of equity transactions by American Pharmaceutical Partners, Inc.	—			—		—			—		—			—			24,826			—			—		—			—		24,826
Purchase of common stock	—			—		—			—		(7,896,226	)		(8	)		(67,492	)		—			—		—			—		(67,500	)
Purchase of preferred stock A	(10,000,000	)		(10,000	)	—			—		—			—			(7,125	)		—			—		—			—		(17,125	)
Purchase of preferred stock B	—			—		(22,500,000	)		(22,500	)	—			—			(16,031	)		—			—		—			—		(38,531	)
Distribution of equity to acquire Transplant Research Institute	—			—		—			—		—			—			—			(20,000	)		—		—			—		(20,000	)
Comprehensive income:
Net income	—			—		—			—		—			—			—			17,657			—		—			—		17,657
Unrealized gain on available-for-sale securities, net of tax	—			—		—			—		—			—			—			—			1,066		—			—		1,066
Foreign currency translation adjustments	—			—		—			—		—			—			—			—			329		—			—		329
Comprehensive income	—			—		—			—		—			—			—			—			—		—			—		19,052
Balance, December 31, 2005	—			—		—			—		164,992,101			165			71,240			51,380			1,629		(6,646,398	)		(56,274	)	68,140
Effect of merger between APP and ABI	—			—		—			—		—			—			979,245			—			—		—			—		979,245
Exercise of Stock Options	—			—		—			—		643,578			1			7,975			—			—		—			—		7,976
Issuance of stock for employee retirement and stock purchase plan	—			—		—			—		157,792			—			3,274			—			—		—			—		3,274
Unvested restricted stock and stock options forfeited	—			—		—			—		(5,449	)		—			—			—			—		—			—		—
Issuance of vested stock	—			—		—			—		140,112			—			(41	)		—			—		—			—		(41	)
Purchase of treasury stock	—			—		—			—		—			—			—			—			—		(58,718	)		(1,467	)	(1,467	)
Stock compensation expense	—			—		—			—		—			—			19,436			—			—		—			—		19,436
Tax benefit of stock compensation plants	—			—		—			—		—			—			4,067			—			—		—			—		4,067
Comprehensive income:
Net income	—			—		—			—		—			—			—			(46,897	)		—		—			—		(46,897	)
Unrealized gain on available-for-sale securities, net of tax	—			—		—			—		—			—			—			—			(1,089	)	—			—		(1,089	)
Foreign currency translation adjustments	—			—		—			—		—			—			—			—			717		—			—		717
Comprehensive income	—			—		—			—		—			—			—			—			—		—			—		(47,269	)
Balance, December 31, 2006	—			—		—			—		165,928,134			166			1,085,196			4,483			1,257		(6,705,116	)		(57,741	)	1,033,361

49

APP Pharmaceuticals, Inc.

Consolidated Statements of Stockholders’ Equity—(Continued)

Years Ended December 31, 2007, 2006 and 2005

	Series A Preferred Stock		Series B Preferred Stock		Common Stock					Additional Paid-in Capital			Retained Earnings (Deficit)			Other Comprehensive Income (Loss)			Treasury Stock		Total
	Shares	Amount	Shares	Amount	Shares		Amount												Shares	Amount
	(in thousands)
Distribution of New Abraxis	—	—	—	—	—			—			(1,173,518	)		(25,043	)		(773	)	—	—		(1,199,334	)
Exercise of stock options	—	—	—	—	439,325			—			3,450			—			—		—	—		3,450
Issuance of stock for employee retirement and stock purchase plan	—	—	—	—	220,010			—			3,801			—			—		—	—		3,801
Cumulative effect adjustment of adoption of FIN 48	—	—	—	—	—			—						(83	)		—		—	—		(83	)
Purchase/(retirement) of treasury stock	—	—	—	—	(6,689,148	)		(6	)		(57,735	)		—			—		6,705,116	57,741		—
Issuance of shares in conjunction with legal settlement	—	—	—	—	43,500			—			14,763			—			—		—	—		14,763
Stock compensation related to restricted stock unit vesting	—	—	—	—	127,375			—			(2,611	)		—			—		—	—		(2,611	)
Stock compensation expense	—	—	—	—	—			—			28,136			—			—		—	—		28,136
Excess tax benefit of stock compensation plans	—	—	—	—	—			—			1,083			—			—		—	—		1,083
Tax benefit of licensing agreement and other					—			—			1,078			—			—		—	—		1,078
Comprehensive income:
Net income	—	—	—	—	—			—			—			34,358			—		—	—		34,358
Unrealized gain on available-for-sale securities, net of tax	—	—	—	—	—			—			—			—			(460	)	—	—		(460	)
Foreign currency translation adjustments	—	—	—	—	—			—			—			—			2,687		—	—		2,687
Comprehensive income	—	—	—	—	—			—			—			—			—		—	—		36,585
Balance, December 31, 2007	—	—	—	—	160,069,196		$	160		$	(96,357	)	$	13,715		$	2,711		—	—	$	(79,771	)

50

APP Pharmaceuticals, Inc.

Consolidated Statements of Cash Flows

	Year Ended December 31,
	2007			2006			2005
	(in thousands)
Cash flows from operating activities:
Net income from continuing operations	$	82,179		$	55,226		$	30,456
Net loss from discontinued operations, net of taxes		(47,821	)		(102,123	)		(12,798	)
Net income (loss)		34,358			(46,897	)		17,658
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation		28,460			19,108			14,224
Amortization		1,796			1,608			1,149
Amortization of product rights		16,440			8,220			—
Amortization of merger related inventory step-up		—			12,480			—
Amortization of merger related intangibles		50,811			38,275			—
Merger related in-process R&D charge		—			105,777			—
Stock-based compensation		28,598			35,023			16,409
Non-cash issuance for legal expenses		14,763			—			—
Loss on disposal of property, plant and equipment		797			189			941
Excess tax benefit from stock-based compensation		(1,083	)		(4,067	)		(15,687	)
Stock option grants/forfeitures		(2,611	)
Deferred income taxes		(10,142	)		(83,199	)		(9,127	)
Minority interest		—			11,383			25,875
Equity in net income of Drug Source Company, LLC, net of dividends received		(3,291	)		(2,776	)		3,528
Changes in operating assets and liabilities, net of effects of spin off:
Accounts receivable, net		(42,199	)		(22,816	)		(46,351	)
Inventories		(12,165	)		(42,998	)		(23,847	)
Prepaid expenses and other current assets		(7,900	)		(2,004	)		(2,226	)
Non-current receivables (due to) from related parties		(6,997	)		610			(2	)
Deferred revenue		(33,945	)		178,956			18,366
Minimum royalties payable		(984	)		(3	)		(82	)
Other non-current liabilities		2,607			(1,565	)		872
Income taxes payable		(80,031	)		73,062			(2,597	)
Accounts payable and accrued expenses		35,071			46,611			35,363
Net cash provided by operating activities		12,353			324,977			34,466
Cash flows from investing activities:
Purchases of property, plant and equipment		(86,160	)		(84,486	)		(51,107	)
Purchases of other non-current assets		(2,862	)		(13,972	)		—
Purchase of product rights		—			(328,797	)		(4,085	)
Net sale (purchase) of short-term investments		—			54,455			12,020
Net cash (used in) investing activities		(89,022	)		(372,800	)		(43,172	)
Cash flows from financing activities
Proceeds from the exercise of stock options		3,450			7,975			11,547
Proceeds from issuance of senior secured credit agreement		1,000,000			—			—
Proceeds from issuance from unsecured credit facility		366,000			204,500			190,000
Proceeds from the sale of stock under employee retirement and stock purchase plan		3,801			3,274			3,129
Notes payable		(66,735	)		72,248			—
Excess tax benefit from stock-based compensation		1,083			4,065			15,687
Repayment of borrowings on unsecured credit facility		(531,000	)		(229,500	)		(42,750	)
Payment of deferred financing costs		(13,275	)		(1,704	)		(585	)
Distribution of equity to acquire TRI		—			—			(20,000	)
Repurchase of preferred stock		—			—			(55,656	)
Retirement of treasury stock		—			(1,467	)		(67,500	)
Separation asset transfer		(696,431	)		—			—
Net cash provided by financing activities		66,893			59,391			33,872
Effect of exchange rates on cash		2,267			(1,089	)		329
Net (decrease) increase in cash and cash equivalents		(7,509	)		10,479			25,495
Cash and cash equivalents, beginning of year		39,297			28,818			3,323
Cash and cash equivalents, end of year	$	31,788		$	39,297		$	28,818
Supplemental disclosure of cash flow information:
Cash paid for interest	$	17,552		$	13,165		$	7,674
Cash paid for income taxes, net of refunds		122,501			33,490			33,690

See accompanying notes to consolidated financial statements

51

APP Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements

December 31, 2007

1. Description of Business

We are a pharmaceutical company that develops, manufactures and markets injectable pharmaceutical products. We believe that we are the only independent U.S. public company with a primary focus on the injectable oncology, anti-infective and critical care markets, and we further believe that we offer one of the most comprehensive injectable product portfolios in the pharmaceutical industry. We manufacture products in each of the three basic forms in which injectable products are sold: liquid, powder and lyophilized, or freeze-dried.

We began in 1996 with an initial focus on U.S. marketing and distribution of generic pharmaceutical products manufactured by others. In June 1998, we acquired Fujisawa USA, Inc.’s generic injectable pharmaceutical business, including manufacturing facilities in Melrose Park, Illinois and Grand Island, New York and our research and development facility in Melrose Park, Illinois. We also acquired additional assets in this transaction, including inventories, plant and equipment and abbreviated new drug applications that were approved by or pending with the FDA.

Our products are generally used in hospitals, long-term care facilities, alternate care sites and clinics within North America. Unlike the retail pharmacy market for oral products, the injectable pharmaceuticals marketplace is largely made up of end users who have relationships with group purchasing organizations, or GPOs, and/or specialty distributors who distribute products within a particular end-user market, such as oncology clinics. GPOs and specialty distributors generally enter into collective product purchasing agreements with pharmaceutical suppliers in an effort to secure more favorable drug pricing on behalf of their members.

We are a Delaware corporation that was formed in 2001 as successor to a California corporation formed in 1996. On April 18, 2006, we completed a merger with American BioScience, Inc., or ABI, our former parent. In connection with the closing of that merger, our certificate of incorporation was amended to change our original name of American Pharmaceutical Partners, Inc. to Abraxis BioScience, Inc. which we refer to as “Old Abraxis.” Old Abraxis operated in two distinct business segments: Abraxis BioScience (ABI), representing the combined operations of Abraxis Oncology and Abraxis Research; and Abraxis Pharmaceutical Products (APP), representing the hospital-based operations.

On November 13, 2007, Old Abraxis separated into two independent publicly-traded companies, one holding the Abraxis Pharmaceutical Products business, focusing primarily on manufacturing and marketing our oncology, anti-infective and critical care hospital-based generic injectable products and marketing our proprietary anesthetic/analgesic products (which we refer to collectively as the “hospital-based business”), and the other holding the Abraxis Oncology and Abraxis Research businesses (which we refer to as the “proprietary business”). We refer to the proprietary business following the separation as “New Abraxis,” which subsequently changed its name to Abraxis BioScience, Inc. We continue to operate the hospital-based business (which we refer to as “New APP”) under the name APP Pharmaceuticals, Inc.

New APP and New Abraxis have entered into a series of agreements, including a separation and distribution agreement, a transition services agreement, an employee matters agreement, a tax allocation agreement, a manufacturing agreement and various real estate leases. Please refer to Note 7—Related Parties for additional information on the separation related agreements. Also, in connection with the separation, we incurred $1 billion of indebtedness and, in addition, entered into a $150 million revolving credit facility that is currently unused. Approximately $276 million of the proceeds of this indebtedness was used to repay in full our prior revolving credit facility; approximately $12 million was used to pay fees and expenses related to the debt financing; and $700 million was contributed to New Abraxis. New APP is solely responsible for servicing the debt following the transactions. Please refer to Note 3—Spin-off of New Abraxis.

52

2. Summary of Significant Accounting Policies

Basis of Accounting and Consolidation

On November 13, 2007, Old Abraxis separated into two independent publicly-traded companies: our company, APP Pharmaceuticals, Inc. (New APP), and New Abraxis. The consolidated financial statements include: (a) the assets, liabilities and results of operations of APP Pharmaceuticals, Inc. and our wholly owned subsidiaries, Pharmaceutical Partners of Canada, Inc. and APP Pharmaceuticals Manufacturing, LLC; and (b) for periods prior to the spin-off, the historical operations of New Abraxis and its subsidiaries. The historical operating results of New Abraxis are now presented as discontinued operations. Please refer to Note 3- Spin-off of New Abraxis.

Accordingly, prior to our separation, the consolidated assets and liabilities include the results of Old Abraxis and the wholly owned subsidiaries, Pharmaceutical Partners of Canada, Inc., APP Pharmaceuticals Manufacturing, LLC, Pharmaceutical Partners Switzerland, GmbH, VivoRx AutoImmune, Inc., Chicago BioScience, LLC and Transplant Research Institute, as well as the majority-owned subsidiary, Resuscitation Technologies, LLC, Cenomed, and investment in Drug Source Company, LLC, which is accounted for using the equity method.

Certain amounts in the accompanying financial statements were reclassified to conform to the current year presentation, including the reclassification of $52 million of current deferred tax assets to reduction in non-current deferred tax liability.

Fiscal Year

For years ended December 31, 2007 and 2006, APP Pharmaceuticals and its subsidiary use a calendar fiscal year, beginning on January 1 and ending on December 31. For year ended December 31, 2005, the company used a 52-week fiscal year, which ended on December 31, 2005.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Estimates may also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash, Cash Equivalents and Short-term Investments

It is our policy to include cash and investments having a maturity of three months or less at the time of acquisition in cash and cash equivalents. Short-term investments consist of highly-liquid, available-for-sale, municipal variable rate demand notes which are recorded at cost, and may be redeemed at par upon seven days notice. The cost of these short-term investments closely approximates their fair market value due to their variable interest rates, which typically reset every seven days. We have never incurred realized or unrealized holding gains or losses on these securities and income resulting from our short-term investments is recorded as interest income.

Accounts Receivable and Concentration of Credit Risk

We typically have multi-year contractual agreements with GPOs and individual hospital groups to supply our products to end-user hospital and alternate site customers. As is traditional in the pharmaceutical industry, a significant amount of our generic pharmaceutical products are sold to end users under GPO contracts through a relatively small number of drug wholesalers, which comprise the primary pharmaceutical distribution chain in

53

the United States. Three wholesalers collectively, and approximately proportionately, represented 74%, 73% and 77% of our sales in fiscal 2007, 2006 and 2005, respectively, and represented 86% and 88% of accounts receivable at December 31, 2007 and 2006, respectively. To help control our credit exposure, we routinely monitor the creditworthiness of our customers, review outstanding customer balances and record allowances for bad debts as necessary. We insure all, or a portion of, gross receivables from our largest customers to protect against risk of significant credit loss. Historical credit loss has been insignificant.

Inventories

Inventories are valued at the lower of cost or market as determined under the first-in, first-out, or FIFO, method, as follows:

	December 31,
	2007						2006
	Approved		Pending Regulatory Approval		Total Inventory		Approved		Pending Regulatory Approval		Total Inventory
	(in thousands)
Finished goods	$	58,787			$	58,787	$	55,248			$	55,248
Work in process		20,097		354		20,451		26,698		3,566		30,264
Raw materials		68,202		1,751		69,953		110,642		22,126		132,768
	$	147,086	$	2,105	$	149,191	$	192,589	$	25,692	$	218,280

Inventories consist of products currently approved for marketing and may include certain products pending regulatory approval. From time to time, we capitalize inventory costs associated with products prior to regulatory approval based on our judgment of probable future commercial success and realizable value. Such judgment incorporates our knowledge and best judgment of where the product is in the regulatory review process, our required investment in the product, market conditions, competing products and our economic expectations for the product post-approval relative to the risk of manufacturing the product prior to approval. If final regulatory approval for such products is denied or delayed, we may need to provide for and expense such inventory.

At December 31, 2007 and December 31, 2006, inventory included $2.1 and $25.7 million respectively in cost relating to products pending FDA and European approval. Included in the amount pending approval at December 31, 2006 was approximately $17.7 million of paclitaxel (whole plant) and other Abraxane^® related products associated with New Abraxis’ operations, at our Grand Island facility.

We routinely review our inventory and establish reserves when the cost of the inventory is not expected to be recovered or our product cost exceeds realizable market value. In instances where inventory is at or approaching expiry, is not expected to be saleable based on our quality and control standards or for which the selling price has fallen below cost, we reserve for any inventory impairment based on the specific facts and circumstances. In evaluating the market value of inventory pending regulatory approval as compared to its cost, we considered the market, pricing and demand for competing products, our anticipated selling price for the product and the position of the product in the regulatory review process. Provisions for inventory reserves are reflected in the financial statements as an element of cost of sales with inventories presented net of related reserves.

54

Property, Plant and Equipment

Property, plant and equipment is stated on the basis of cost or allocated acquisition value. Provisions for depreciation are computed for financial reporting purposes using the straight-line method over the estimated useful life of the related asset and for leasehold improvements the lesser of the estimated useful life of the related asset or the term of the related lease as follows:

Buildings and improvements	10-30 years
Machinery and equipment	3-10 years
Furniture and fixtures	5-7 years
Aircraft	15 years

Depreciation expense from continuing operations was $19.1 million, $13.6 million and $11.4 million for the years ended December 31, 2007, 2006 and 2005, respectively. Depreciation expense increased $5.5 million in 2007 as compared to 2006, due primarily to our Puerto Rico facility. Depreciation expense increased $2.2 million in 2006 as compared to 2005, due primarily to an overall increase in capital expenditures.

Property, plant, and equipment consist of the following:

	December 31,
	2007			2006
	(in thousands)
Land	$	3,619		$	6,636
Building and improvements		41,743			80,253
Machinery and equipment		81,252			124,559
Furniture and fixtures		50,725			40,599
Construction in progress		32,185			49,702
		209,524			301,749
Less allowance for depreciation		(76,996	)		(83,930	)
	$	132,528		$	217,819

Approximately $145 million of the reduction from 2006 related to the spin-off of New Abraxis, as described in Note 3.

Deferred Financing Costs

Costs incurred in connection with the issuance and amendments to our credit facilities are capitalized and amortized using the straight-line methods over the term of the related facility, which approximates the effective interest method. Unamortized debt issue costs are written-off in conjunction with the refinancing or termination of the applicable debt arrangement prior to its scheduled maturity. We capitalized deferred financing costs of $13.3 million and $1.7 million in 2007 and 2006, respectively, associated with our new senior secured credit agreement entered into in November 2007 and our prior $450 million unsecured credit facility entered into in 2006. In addition, we wrote-off $0.8 million in 2007 and $0.5 million in 2006 of unamortized deferred financing costs relating to terminated debt.

Goodwill and Intangible Assets

We are required to perform impairment tests related to our goodwill under SFAS No. 142, “Goodwill and Other Intangible Assets” annually, which we perform on October 1, and whenever events or changes in circumstances suggest that it is more likely than not that the fair value of the reported units are below their carrying values. We completed the 2007 annual impairment tests for our goodwill and determined that goodwill

55

allocated to our reporting units was not impaired and that no impairment charges were required. The change in goodwill during 2007 was due to the spin-off of New Abraxis as detailed in Note 3.

Intangible assets are recorded at acquisition cost and are amortized on a straight-line basis over the period estimated revenues are expected to be derived from such assets (weighted average amortization period of approximately seventeen years). We review our intangible assets for impairment whenever events or changes in circumstance indicate that the carrying amount of an intangible asset may not recoverable.

Product Revenue recognition

We recognize revenue from the sale of a product and for contract manufacturing when title and risk of loss have transferred to the customer, collection is reasonably assured and we have no further performance obligation. This is typically when the product is received by the customer. At the time of sale, as further described below, we reduce sales and provide for estimated chargebacks, contractual allowances or customer rebates, product returns and customer credits and cash discounts. Our methodology used to estimate and provide for theses sales provisions was consistent across all periods presented. Historically, Medicaid rebates issued have not been material. Accruals for sales provisions are presented in our financial statements as a reduction of revenues and accounts receivable and, for contractual allowances, in accrued liabilities. We regularly review information related to these estimates and adjust our reserves accordingly if, and when, actual experience differs from estimates.

We have extensive, internal historical information on chargebacks, rebates and customer returns and credits which we use as the primary factor in determining the related reserve requirements. As further described below, due to the nature of our generic injectable products and their primary use in hospital and clinical settings with generally consistent demand, we believe that this internal historical data, in conjunction with periodic review of available third-party data (as described below) and updated for any applicable changes in available information provides a reliable basis for such estimates.

Sales to our three major wholesale customers comprised 74%, 73%, and 77% of our 2007, 2006 and 2005 net revenue respectively. We periodically, as we believe warranted, review the wholesale supply levels of our significant products by reviewing inventory reports purchased or available from wholesalers, evaluating our unit sales volume, and incorporating data from third-party market research firms and periodic visits to wholesalers’ warehouses. Based on these activities, we attempt to keep a consistent wholesale stocking level of approximately two- to six-weeks across our generic products. The buying patterns of our customers do vary from time to time, both from customer to customer and product to product, but we believe that historic wholesale stocking or speculative buying activity in our generic distribution channel has not had a significant impact on our historic sales comparisons or sales provisions.

From time to time we enter into inventory management agreements with our wholesale customers which require us to pay a fee in connection with their distribution of our products or other services, possibly including sales data and other services and contractual rights for us. In addition, we may be required to enter into such agreements in the future in order to maintain our relationships with other such wholesalers. We are unable to ascertain the potential impact of any such future agreements on our sales, but do not believe that such agreements would result in a substantial change in wholesale stocking levels of our products as compared to current levels.

Our sales provisions totaled $1,107.3 million, $759.9 million, and $573.8 million in 2007, 2006 and 2005, respectively, and related reserves totaled $125.1 million and $112.5 million and $84.5 million at December 31, 2007, 2006 and 2005, respectively.

56

Deferred Revenue

Other deferred revenue pertains to Old Abraxis (pre spin-off) upfront payments earned from our co-promotion agreement with AstraZeneca and our agreement with Taiho Pharmaceutical Co. Ltd. Such deferred revenue was recognized ratibly over the term of the agreement and is recorded as a component of discontinued operations in our statement of operations.

Chargebacks

The estimated provision for chargebacks is our most complex sales allowance. Following industry practice, we typically sell our product to independent pharmaceutical wholesalers at wholesale list price. The wholesaler in turn sells our product to an end user, normally a hospital or alternative healthcare facility, at a lower contractual price previously established between ourselves and the end user via a group purchasing organization, or GPO. GPOs enter into collective purchasing contracts with pharmaceutical suppliers to secure more favorable product pricing on behalf of their end-user members.

Our initial sale to the wholesaler, and the resulting receivable, are recorded at our wholesale list price. As most of these list selling prices will be reduced to a lower end-user contract price, we then reduce reported sales and receivables by the difference between the list price and estimated end-user contract price. Then, when the wholesaler ultimately sells the product to the end user at the end-user contract price, the wholesaler charges us, a chargeback, for the difference between the list price and the end-user contract price and such chargeback is offset against our initial estimated provision. On a monthly basis, we compare the unit and price components of our recorded chargeback provision to estimated ending wholesale units in the distribution channel pending chargeback under end-user contracts and estimated end-user contract prices and adjust the chargeback provision as necessary.

The most significant estimates inherent in the initial chargeback provision relate first to wholesale units pending chargeback and, second, to the ultimate end-user contract-selling price. We base our estimation for these factors on internal, product-specific sales and chargeback processing experience, estimated wholesaler inventory stocking levels, current contract pricing, our expectation for future contract pricing changes and IMS data. Key factors which complicate the chargeback calculation include the time lags between the date the product is sold to the wholesaler and the dates the wholesaler sells the product to the end-user customer and the related reporting of that final sale enabling us to process the chargeback. Our chargeback provision is also potentially impacted by a number of market conditions including: competitive pricing, competitive products and changes impacting demand in both the distribution channel and healthcare provider.

Due to information constraints in the distribution channel, it has not been practical, and has not been necessary, for us to capture and quantify the impact of current versus prior year activity on the chargeback provision. Information constraints within the distribution channel primarily relate to our inability to track product through the channel on a unit or specific lot basis. In addition, for the most part, we do not receive information from our customers with respect to what level of their sales are subject to chargeback. The lack of information on a specific lot basis precludes us from tracking actual chargeback activity to the period of its initial sale. As a result, we rely on internal data, external IMS data and management estimates in order to estimate the amount of inventory in the channel subject to future chargeback. The amount of product in the channel is comprised of product at the distributor and that the distributor has yet to report as end user sales. Physical inventory in the channel is estimated by our evaluation of our monthly sales to our wholesalers and our knowledge of inventory turnover at our major wholesalers. We estimate yet to be reported end user sales based on a historical average number of days to process chargeback activities from the date of the end user sale. We also review current year chargeback activity to determine whether material changes in the provision relate to prior period sales, such changes have not been material to the statement of operations. A one percent decrease in our estimated end-user contract-selling prices would reduce net revenue for the twelve months ended December 31, 2007 by $0.2 million and a one percent increase in wholesale units pending chargeback for the twelve months ended December 31, 2007 would reduce net revenue by less than $0.5 million.

57

The provision for chargebacks is presented in our financial statements as a reduction of sales:

	Year Ended December 31,
	2007			2006			2005
	(in thousands)
Balance at beginning of year	$	92,427		$	47,841		$	97,382
Provision for chargebacks		1,003,577			713,241			519,750
Credit or checks issued to third parties		(994,095	)		(668,655	)		(569,291	)
Balance transferred at separation		(732	)		—			—
Balance at end of year	$	101,177		$	92,427		$	47,841

Contractual allowances, returns and credits, cash discounts and bad debts

Contractual allowances, generally rebates or administrative fees, are offered to certain wholesale customers, GPOs and end-user customers, consistent with pharmaceutical industry practices. Settlement of rebates and fees may generally occur from one to 15 months from date of sale. We provide a general provision for contractual allowances at the time of sale based on the historical relationship between sales and such allowances. Upon receipt of chargeback, due to the availability of product and customer specific information on these programs, we then establish a specific provision for fees or rebates based on the specific terms of each agreement. A one percent increase in the estimated rate of contractual allowances to sales at December 31, 2007 would decrease net revenues by $0.8 million. Contractual allowances are reflected in the financial statements as a reduction of revenues and as a current accrued liability. The accrual for customer credits and product returns is presented in the financial statements as a reduction of revenues and accounts receivable. Our provision for contractual allowances during each of the three years ended December 31, 2007 was as follows:

	Year Ended December 31,
	2007			2006			2005
	(in thousands)
Balance at beginning of year	$	16,555		$	12,152		$	11,433
Provision for contractual allowances and customer rebates		49,320			33,525			33,572
Credit issued to third parties		(50,265	)		(29,122	)		(32,853	)
Balance transferred at separation		(5,470	)		—			—
Balance at end of year	$	10,140		$	16,555		$	12,152

Consistent with industry practice, our return policy permits our customers to return products within a window of time before and after the expiration of product dating. We provide for product returns and other customer credits at the time of sale by applying historical experience factors, generally based on our historic data on credits issued by credit category or product, relative to related sales and we provide specifically for known outstanding returns and credits. At December 31, 2007, a one-percent increase in the estimated reserve requirements for customer credits and product returns would have decreased 2007 net revenues by $1.7 million. Our provision for customer credits and product returns during each of the three years ended December 31, 2007 was as follows:

	Year Ended December 31,
	2007			2006			2005
	(in thousands)
Balance at beginning of year	$	9,762		$	16,272		$	9,397
Provision for customer credits and product returns		7,871			20,386			27,010
Credit issued to third parties		(8,347	)		(26,896	)		(20,135	)
Balance transferred at separation		(444	)		—			—
Balance at end of year	$	8,842		$	9,762		$	16,272

58

We generally offer our customer a standard cash discount on generic injectable products for prompt payments and, from time-to-time, may offer a greater discount and extended terms in support of product launches or other promotional programs. Our wholesale customers typically pay within terms and a provision for cash discount is established at the time of sale based on the terms of sale and adjusted for historical experience factors.

We establish a reserve for bad debts based on general and identified customer credit exposure. Our actual loss due to bad debts in each of the three-year period ended December 31, 2007 was less than $0.1 million.

Shipping and Handling Fees and Costs

Shipping and handling fees billed to customers are recognized in revenues. Other shipping and handling costs are included in cost of sales.

Income Taxes

Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as net operating loss and capital loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated financial statements in the period that includes the legislative enactment date.

Since our 2001 initial public offering and continuing through the year-ended December 31, 2005 we have filed separate, stand-alone federal income tax returns. For state purposes, depending upon the applicable state laws, we may have filed a separate or a consolidated tax return with American BioScience.

Due to the tax free merger with American BioScience in 2006, we filed final stand-alone federal and consolidated state income tax returns for American Pharmaceutical Partners, Inc. For tax year 2006 we included pre- and post-merger income from American BioScience, and post-merger income from American Pharmaceutical Partners, Inc. in new stand-alone federal and state tax return filings. For tax purposes, the downstream merger of parent into subsidiary was treated as a reverse acquisition whereby, American BioScience was the surviving entity.

New APP and New Abraxis entered into a series of agreements in connection with the separation, including a tax allocation agreement. Refer to Note 7—Related Party Transactions for further details.

Research and Development Costs

Research and development costs are expensed as incurred or consumed and consist of pre-production manufacturing scale-up activities and related salaries and other personnel-related expenses, depreciation, facilities, raw material and production costs and professional services.

Equity-Based Compensation

We account for stock-based compensation in accordance with FAS 123(R), which requires the recognition of compensation cost for all share-based payments (including employee stock options) at fair value. Effective January 1, 2006, we adopted the provisions of FAS 123(R) using a modified version of retrospective application. As a result, stock-based employee compensation for options is recorded as an expense based on the fair value method under FAS 123(R) (FAS 123 for 2005). We use the straight-line attribution method to recognize share-based compensation expense over the vesting period of the award. Options currently granted generally expire ten

59

years from the grant date and vest ratably over a four-year period, while restricted stock units currently granted vest ratably over a four-year period. Awards under the APP Pharmaceuticals, Inc. Restricted Stock Unit Plan (“the RSU Plan”) generally vest with respect to one half of the units on the second anniversary of the 2006 Merger and with respect to one half of the units on the fourth anniversary of the 2006 Merger.

Stock-based compensation recognized under FAS 123(R), as well as expense associated with the retrospective application, uses the Black-Scholes option pricing model to estimate the fair value of options granted under our equity incentive plans and rights to acquire stock granted under our stock participation plan. Compensation expense related to equity awards of restricted stock units is based upon the market price on the date of grant. Excluding the effects of discontinued operations, pre-tax stock-based compensation costs for the years ended December 31, 2007, 2006 and 2005 were $12.1 million, $11.1 million and $12.0 million, respectively.

Refer to Note 13—Stock Options, for a detail of financial statement changes caused by the retrospective application.

Fair Value of Financial Instruments

Our financial instruments consist mainly of cash and cash equivalents, short-term investments, accounts receivable, accounts payable and our credit facility. Cash equivalents include investments with maturities of three months or less at the time of acquisition. Short-term investments consist of highly-liquid, available-for-sale, municipal variable rate demand notes, which are recorded at cost, and may be redeemed at par upon seven days notice. At December 31, 2007 and 2006, the carrying amounts of items comprising current assets and current liabilities approximate fair value due to the short-term nature of these financial instruments. The interest rates on borrowings under the bank credit facility are revised periodically to reflect market rate fluctuations; as such, the carrying amount of the bank credit facility approximate fair value.

As of December 31, 2007, we did not have any derivatives or other foreign currency or interest rate hedging instruments.

60

Per Share Information

Basic income per common share is computed by dividing net income by the weighted-average number of common shares outstanding. Dilutive income per common share is computed by dividing net income by the weighted-average number of common shares used for the basic calculations plus potentially dilutive shares for the portion of the year that the shares were outstanding. Potentially dilutive common shares resulted from outstanding stock options. Calculations of basic and diluted income per common share information are based on the following:

	Year Ended December 31,
	2007			2006			2005
	(in thousands, except per share data)
Basic and dilutive numerator:
Net income (loss)	$	34,358		$	(46,897	)	$	17,657
Denominator:
Weighted average common shares outstanding—basic		159,643			158,937			157,694
Net effect of dilutive securities:
Stock options and restricted stock awards		1,363			—			2,048
Weighted average common shares outstanding—diluted		161,006			158,937			159,742
Income from continuing operations per common share—basic		0.51			0.35			0.19
Loss from discontinued operations per common share—basic		(0.29	)		(0.65	)		(0.08	)
Net income (loss) per common share—basic	$	0.22		$	(0.30	)	$	0.11
Income from continuing operations per common share—diluted		0.51			0.35			0.19
Loss from discontinued operations per common share—diluted		(0.30	)		(0.64	)		(0.08	)
Net income (loss) per common share—diluted	$	0.21		$	(0.29	)	$	0.11

Employee stock options for which the exercise price exceeded the average market price of our common stock in the respective fiscal years were excluded from the computation of diluted income per common share as follows:

	Year Ended December 31,
	2007	2006	2005
	(in thousands, except per share data)
Number of options excluded	1,941	2,706	535
Range of exercise prices per share	$10.27 - $28.73	$2.00 - $56.02	$45.86 - $56.02

Recent Accounting Pronouncements

In December 2007, the FASB issued Statement No. 141(R), “Business Combination” (SFAS 141R) and Statement No. 160, “Accounting and Reporting of Noncontrolling Interest in Consolidated Financial Statements, an Amendment of ARB No. 51 (SFAS 160). These new standards will significantly change the accounting for and reporting of business combination transactions and noncontrolling (minority) interests consolidated financial statements. SFAS 141R and SFAS 160 are required to be adopted simultaneously and are effective for the first annual reporting period beginning on or after December 15, 2008. Earlier application is not permitted. SFAS 141R and SFAS 160 could have a significant impact on our accounting for future business combinations and other business arrangements after the implementation of these statements.

61

In June 2007, the FASB ratified the consensus reached by the EITF on EITF Issue No. 07-3, “Accounting for Nonrefundable Advance Payments for Goods or Services Received for Use in Future Research and Development Activities” (or “EITF 07-3”). EITF 07-3 states that nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities should be deferred or capitalized. Such amounts should be recognized as an expense as the related goods are delivered or the related services performed. If an entity does not expect the goods to be delivered or services to be rendered, the capitalized advance payment should be charged to expense. EITF 07-3 is effective for fiscal years beginning after December 15, 2007 and earlier application is not permitted. We often enter into agreements for research and development goods and service. We are presently evaluating the impact that the adoption of EITF 07-3 will have on our condensed consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115.” SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected will be recognized in earnings at each subsequent reporting date. SFAS No. 159 is effective for our company January 1, 2008. We are evaluating the impact that the adoption of SFAS No. 159 will have on our consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157 which redefines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (“GAAP”), and expands disclosures about fair value measurements. SFAS No. 157 applies where other accounting pronouncements require or permit fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The effects of adoption will be determined by the types of instruments carried at fair value in our financial statements at the time of adoption as well as the methods utilized to determine their fair values prior to adoption. Based on our current use of fair value measurements, SFAS No. 157 is not expected to have a material effect on our results of operations or financial position.

3. Spin-off of New Abraxis

On November 13, 2007, Old Abraxis, Inc. was separated into two independent publicly-traded companies: our company, APP Pharmaceuticals, Inc., which owns and operates the hospital-based business; and the other which owns and operates the proprietary business. We refer to the proprietary business following the separation as “New Abraxis,” which subsequently changed its name to Abraxis BioScience, Inc. We continue to operate the hospital-based business (which we refer to as “New APP” following the separation) under the name APP Pharmaceuticals, Inc.

New APP and New Abraxis entered into a series of agreements in connection with the separation, including a separation and distribution agreement, a transition services agreement, an employee matters agreement, a tax allocation agreement, a manufacturing agreement and various real estate leases. Also, in connection with the separation, we incurred $1 billion of indebtedness and, in addition, entered into a $150 million revolving credit facility that is currently unused. Please refer to Note 7—Related Parties for additional information on the separation related agreements. $700 million of the proceeds from this indebtedness was contributed to New Abraxis, approximately $12 million was used to pay fees and expenses related to the debt financing and approximately $276 million of the proceeds was used to repay in full the then existing revolving credit facility. New APP is solely responsible for servicing the debt.

62

Summarized financial information for discontinued operations is as follows:

	2007			2006			2005
	(in thousands)
Net revenues	$	293,415		$	182,287		$	135,675
Earnings before taxes		(67,831	)		(141,383	)		(5,218	)
Income tax (benefit) expense		(20,010	)		(39,260	)		7,580
Net earnings		(47,821	)		(102,123	)		(12,798	)

The financial information above includes the operations of New Abraxis through November 30, 2007. Note: November 30, 2007 was used as the transaction date versus the November 13 date to ensure proper cutoffs were obtained. Operating results between November 13 and November 30 were not material. As a consequence, the results for the full year 2007 include eleven months of the operations of New Abraxis. The results of the discontinued operations also include direct transaction costs of approximately $14.3 million, net of tax, in 2007.

The following is a summary of the assets and liabilities transferred to New Abraxis on November 30, 2007. The December 31, 2006 balances represent assets and liabilities that are included in the accompanying consolidated balance sheet.

	November 30, 2007		December 31, 2006
	(in millions)
Cash	$	696	$	1
Receivables		28		28
Inventory		80		80
Prepaid expenses, deferred income taxes, and other receivables		19		28
Net property and equipment		145		116
Net intangibles		208		243
Goodwill		241		241
Other assets		46		27
Total assets	$	1,463	$	764
Trade accounts payable, salaries and other accruals	$	82	$	71
Deferred revenue, long and short term		163		197
Deferred income taxes, non-current		14		29
Other long-term liabilities		5		8
Total liabilities	$	264	$	305
Net assets transferred to New Abraxis	$	1,199

For the twelve month periods ended December 31, 2007, 2006 and 2005, we have allocated interest expense of $0.2 million, $4.8 million and $6.6 million, respectively, to discontinued operations. The amounts allocated in 2006 and 2005 represents the interest expense for American BioScience, Inc. prior to the merger with American Pharmaceutical Partners, Inc.

4. Merger

On April 18, 2006, we completed a merger with American BioScience, Inc., or ABI, our former parent, pursuant to the terms of the Agreement and Plan of Merger dated November 27, 2005 that we entered into with ABI and certain shareholders of ABI.

For accounting purposes, the merger between us and ABI was treated as a downstream merger with ABI viewed as the surviving entity, although we were the surviving entity for legal purposes. As such, effective as of the merger date, the merger was accounted for in our consolidated financial statements as an implied acquisition

63

of our minority interests using the purchase method of accounting. Therefore, the historical book value of the minority interests was stepped up to its estimated fair values and the historical shareholders’ equity of the accounting acquirer, ABI, was retroactively restated for the equivalent number of shares received in the merger.

At the April 18, 2006 acquisition date, the minority shareholders owned 34.17% of our total outstanding common shares. Based on a $39.14 price for our common stock, representing the weighted average price of our common stock for the period three trading days prior to and three trading days subsequent to the merger announcement date, the fair value of the minority interests as of April 18, 2006 totaled approximately $974.8 million. This amount represented the estimated fair market value assigned to the shares owned by minority interests and will be referred to as the purchase price attributed to minority interests. The purchase price attributed to minority interests was allocated to the minority interests’ pro-rata share of our tangible and identifiable intangible assets and liabilities based on their estimated fair values at the acquisition date. The excess of the purchase price attributed to minority interests over the minority interests’ pro-rata share of the fair values of our assets and our liabilities has been reflected as goodwill. The amount allocated to goodwill will not be deductible for tax purposes.

The allocation of the purchase price to the estimated fair values of the assets and liabilities attributable to our minority interests as of the acquisition date was as follows (in thousands):

Working capital and other assets, net	$	132,562
Property, plant and equipment		49,152
Deferred tax assets		9,282
In-process research and development		105,777
Identifiable intangible assets		455,370
Goodwill		401,600
Deferred tax liability		(178,953	)
Total	$	974,790

The estimated step-up of the minority interests to fair value has been assigned to the following categories (in thousands):

Inventory	$	12,480
Deferred tax assets		9,282
In-process research and development		105,777
Identifiable intangible assets		455,370
Goodwill		401,600
Deferred tax liability		(178,953	)
Total	$	805,556

The above purchase price allocation was based in part on a third-party valuation of certain tangible and intangible assets, including in-process research and development and identifiable intangible assets.

In-process research and development

Approximately $105.8 million of the purchase price was allocated to in-process research and development and represents the minority interests’ share of the estimated fair value of in-process research and development assets for projects that, as of the acquisition date, had not yet reached technological or regulatory feasibility and had no alternative future uses in their current states. The values assigned to in-process research and development projects include unapproved indications for Abraxane. All of the $105.8 million of in-process research and development was expensed in the second quarter of 2006, of which $22.3 million related to continuing operations.

64

The estimated fair values of these projects were determined based on a discounted cash flow model prepared by an independent third party, KPMG LLP. The estimated cash flows for each project were probability adjusted to take into account the risks associated with the successful commercialization of the projects. The estimated after-tax cash flows were then discounted using discount rates of approximately 20%.

The major risks and uncertainties associated with the timely and successful completion of the acquired in-process research and development projects consist of the ability to confirm the safety and efficacy of the technology based on the data from clinical trials and obtaining necessary regulatory approvals. The major risks and uncertainties associated with the core technology consist of successfully utilizing the technology in future research projects. No assurance can be given that the underlying assumptions used to forecast the cash flows or the timely and successful completion of the projects will materialize, as estimated. For these reasons, among others, actual results may vary significantly from the estimated results.

Identifiable intangible assets

Acquired identifiable intangible assets primarily include core technology associated with Abraxane, customer relationships and trade name.

The amounts assigned to each intangible asset class as of the acquisition date and the related weighted average amortization periods are as follows:

	Value of acquired intangibles		Weighted- average amortization period
	(in thousands)
Core technology	$	158,863	7 yrs
Developed product technology		146,002	9 yrs
Customer relationships		124,027	11 yrs
Tradename		26,478	7 yrs
Total	$	455,370

Pro forma results of operations

The following unaudited pro forma information presents a summary of our consolidated results of operations as if the acquisition had taken place at the beginning of each period presented (in thousands, except per share data):

	Year Ended December 31,
	2006		2005
Total revenue	$	765,488	$	520,757
Net income		60,531		2,459
Pro forma income per share:
Basic		0.38		0.02
Diluted		0.38		0.02

The pro forma net income and income per share for each period above excludes the acquired in-process research and development charge of $105.8 million, or approximately $0.67 per share. In addition, the pro forma results of operations for the twelve months ended December 31, 2006 include a non-recurring tax benefit of $17.9 million related to the removal of our valuation allowance against certain deferred tax assets. The pro forma information is not necessarily indicative of results that would have been achieved had the acquisition occurred as of January 1, 2006 and 2005, or indicative of results that may be achieved in the future.

65

5. Goodwill and Other Intangibles

As of December 31, 2007 and 2006, goodwill had a carrying value of $160.2 million and $401.6 million, respectively, resulting from the merger, as fully described in Note 4—Merger, between ABI and APP on April 18, 2006 and the carrying value related to continuing operations has not changed since then. Substantially all of our intangible assets, other than goodwill, are subject to amortization. Amortization expense from continuing operations on intangible assets was $33.6 million, $19.3 million, and $1.1 million for the years ended December 31, 2007, 2006 and 2005, respectively. At December 31, 2007 the weighted average expected lives of intangibles was approximately 17.3 years.

The following table reflects the components of intangible assets, which have finite lives, as of December 31:

	2007				2006				Category Amortization Period
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(in thousands)				(in thousands)
Product rights	$	328,797	$	24,660	$	328,797	$	8,220	20 years
Customer relationships		100,439		14,299		124,027		8,316	12 years
Developed product technology		84,663		12,053		146,002		4,997	12 years
Other		591		324		1,755		988	5 years
Core technology		—		—		158,863		22,282
Tradename		—		—		26,478		2,679
Total		514,490		51,336		785,922		47,482

Approximately $208 million of the decrease in net intangible assets was due to the asset transfer to New Abraxis, which was made on November 30, 2007. Please refer to Note 3- “Spin-off of Abraxis BioScience”. Estimated amortization expense for identifiable intangible assets, other than goodwill, in each of the five succeeding years is approximately $31.9 million.

6. Acquisition of Assets

We entered into an Asset Purchase Agreement with AstraZeneca UK Limited on April 26, 2006 to acquire AstraZeneca’s U.S. anesthetics and analgesic product portfolio, which includes Diprivan ^® (propofol), Naropin ^® (ropivacaine), as well as a variety of local anesthetics including EMLA ^® (Eutectic Mixture of Lidocaine and Prilocaine), Xylocaine ^® (lidocaine), Polocaine ^® (mepivacaine), Nesacaine ^® (chloroprocaine HCl Injection, USP), Sensorcaine ^® (bupivacaine), and Astramorph ^® (morphine sulfate injection, USP). Under the agreement, we paid AstraZeneca approximately $259 million at closing and paid $75 million upon the first anniversary of closing, June 28, 2007, and these costs are being amortized, on a straight line basis, over twenty years. At the closing, AstraZeneca entered into an exclusive supply agreement with us under which AstraZeneca will supply these products to us for an initial term of five years. In addition, AstraZeneca has agreed that we will be its preferred partner for consideration of certain proprietary injectable products when patents on these products expire. Under the terms of the agreement, AstraZeneca has also granted us a right of first offer to purchase or license AstraZeneca’s anesthetics and analgesics portfolio outside of the U.S. should AstraZeneca decide to divest these assets. This transaction closed on June 28, 2006.

With respect to the products purchased from AstraZeneca we have recorded intangible assets of approximately $329 million which will be amortized over the estimated lives of the products, or twenty years. In determining the appropriate amortization period and method for these acquired products, we considered, among other things, the nature of the products, the anticipated timing of cash flows and the relatively high barriers to entry for competition due to the complex development and manufacturing processes. In particular, some of the products have been on the market since 1948 (and all since 1996), and they have generally experienced minimal price erosion and stable product sales. In addition, the products all share similar attributes in that they have a

66

favorable risk profile (e.g., minimal side effects, adverse experiences, etc.) and are easy to administer to patients. Based on the risk profile, ease of use and already low pricing, we do not expect new competing products will enter the market in the foreseeable future and the barriers to entry should help protect the market positions of the products and preserve their useful lives. Accordingly, as future cash flows with respect to these products are expected to exceed 20 years and remain relatively stable, we have utilized a straight-line 20 year amortization period.

7. Related Party Transactions

At December 31, 2007 and 2006, net receivable from related parties totaled $7.0 million and $0 million, respectively. Of the $7.0 million net receivable from related parties at December 31, 2007, $6.9 million related to activities provided under the agreements noted below, $0.1 related to charges associated with services rendered under these agreements. For December 31, 2007, net receivable from related party related primarily to transactions involving New Abraxis, which was spun-off from us on November 13, 2007. See below for a detailed discussion of these transactions with New Abraxis. For 2006, receivables from related parties consist of a note receivable from a former employee bearing interest at 3.44% per annum.

In connection with the separation and related transactions, we entered into a number of agreements that governs the relationship between New Abraxis and us for a period of time after the separation. The agreements were entered into while New Abraxis was still our wholly owned subsidiary. These agreements include:

• Tax allocation agreement

• Dual officer agreement

• Employee matters agreement

• Transition services agreement

• Manufacturing agreement

• Various real estate leases

Tax Allocation Agreement

The tax allocation agreement allocates the liability for taxes. Under the tax allocation agreement, we are responsible for and have agreed to indemnify New Abraxis against all tax liabilities to the extent they relate to our hospital-based products business, and New Abraxis is responsible for and have agreed to indemnify us against all tax liabilities to the extent they relate to New Abraxis’ proprietary products business. The tax allocation agreement also provides the extent to which, and the circumstances under which, the parties would be liable if the distribution were not to constitute a tax-free distribution under Section 355 and Section 368(a)(1)(D) of the Internal Revenue Code. In general, New Abraxis would be required to indemnify us for any taxes resulting from a failure of the distribution to so qualify, unless such failures results solely from our specified acts.

Dual Officer Agreement

We entered into an agreement with New Abraxis under which we and New Abraxis acknowledged and agreed that Dr. Soon-Shiong and Ms. Gopala may serve as an officer of both companies and receive compensation from either or both companies. We also acknowledge and agree in this agreement that neither Dr. Soon-Shiong nor Ms. Gopala will have any obligation to present to us any business or corporate opportunity that may come to his or her attention, other than certain business opportunities relating to the manufacture or sale of products that either were manufactured and sold by the hospital-based products business prior to the separation or were the subject of an ANDA filed by New APP prior to the separation and related transactions. This agreement does not ensure the continued services of either Dr. Soon-Shiong or Ms. Gopala following the separation and related transactions, restrict these individuals from resigning from our company or restrict our

67

board of directors from terminating their employment with us. In connection with the private letter ruling, Old Abraxis has represented to the Internal Revenue Service that no person will serve as an executive officer of both New Abraxis and us one year following the distribution.

Employee Matters Agreement

We entered into an employee matters agreement with New Abraxis, providing our respective obligations to employees and former employees who are or were associated with our respective businesses, and for other employment and employee benefit matters. Under the terms of the employee matters agreement, we generally assumed all liabilities and obligations related to employee benefits for current and former employees who are or were associated with the hospital-based products business, and New Abraxis generally assumed all liabilities and obligations related to employee benefits for current and former employees who are or were associated with the proprietary products business. Under the employee matters agreement, the parties have agreed to reimburse one another for all indemnifiable losses that each may incur on behalf of the other as a result of any of the benefit plans or any of the termination or severance obligations.

Transition Services Agreement

Pursuant to the transition services agreement, New Abraxis and we will continue to provide to one another various services on an interim, transitional basis, for periods up to 24 months depending on the particular service. Services that New Abraxis provides to us include legal services (e.g., assistance with SEC filings, labor and employment matters, and litigation support), financial services and corporate development. Services that we provide to New Abraxis include information technology support, tax services, accounts payable services, internal audit services, accounts receivable services, general legal services, accounting related assistance, corporate insurance and franchise tax services, human resources, customer operations, sales and marketing support, corporate purchasing and facility services and regulatory support (including assistance with state and federal license renewals). Payments made under the transition services agreement are based on the providing party’s actual costs of providing a particular service. This agreement will terminate after a period of 24 months, but generally may be terminated earlier by either party as to specific services on certain conditions. For the year ended December 31, 2007, we incurred net transition service costs of $0.1 million with New Abraxis. As of December 31, 2007, we had a net receivable related to transition services of $0.1 million with New Abraxis.

Manufacturing Agreement

We entered into a manufacturing agreement with New Abraxis, through our wholly-owned subsidiary, New APP LLC, for the manufacture of Abraxane^® and certain of New Abraxis’ pipeline products by New APP LLC for New Abraxis at the Melrose Park and Grand Island manufacturing facilities. Under the terms of the manufacturing agreement, New Abraxis will perform certain manufacturing activities with respect to Abraxane^® or other pipeline products, principally related to the formulation and compounding of the active pharmaceutical ingredients in such products, and New APP LLC will undertake the remainder of the manufacturing processes. As part of the manufacturing services, New APP LLC will also provide New Abraxis with training related to proper manufacturing practices and other related training, assistance with quality assurance and control and information technology support related to manufacturing operations. With regard to the Melrose Park and Grand Island facilities, New APP LLC will be responsible for obtaining and maintaining necessary approvals to manufacture Abraxane^® or other pipeline products in compliance with the regulatory requirements applicable as to the jurisdictions in which such products are sold, subject to the right to receive reimbursement from New Abraxis for the costs of such approvals in certain circumstances. New Abraxis will be responsible for obtaining and maintaining the remainder of the regulatory approvals required to sell and distribute Abraxane^® both in the United States and in other jurisdictions and New Abraxis will be responsible for the final release of the product for sale at the completion of the manufacturing process.

In the manufacturing agreement, New APP LLC agreed with New Abraxis to cap the manufacturing growth over the term of the agreement of Abraxane^® and other pipeline products that New APP LLC is required to

68

manufacture under the agreement. Further, in the event of capacity constraints at the Melrose Park or Grand Island facilities, the manufacturing agreement will provide that the available capacity will be prorated between New Abraxis and New APP LLC according to the parties’ then current use of New APP LLC’s manufacturing capacity. While the manufacturing agreement allows New Abraxis to override these proration provisions, New Abraxis may only do so by paying New APP LLC additional fees under the manufacturing agreement. The fee New Abraxis would be required to pay New APP LLC to override the proration provisions of the manufacturing agreement is equal to the profit lost by New APP LLC as a result of New Abraxis’ election to override the proration provisions.

New Abraxis will pay New APP LLC a customary margin on its manufacturing costs. In addition, during each of the first three years of the manufacturing agreement, New Abraxis will pay New APP LLC a facility management fee equal to $3 million. The amount of this fee may be offset to the extent New APP employees are transferred to New Abraxis based upon the amount of compensation paid to such transferred employees. The term of the manufacturing agreement will end on December 31, 2011, which will be automatically extended for one year if either New APP exercises its right to extend the lease on New Abraxis’ Melrose Park manufacturing facility for an additional year or New Abraxis exercises its right to extend the lease for New APP’s Grand Island manufacturing facility for an additional year. (See “—Real Estate Leases” below).

The manufacturing agreement includes customary confidentiality provisions pursuant to which New Abraxis and New APP LLC will keep confidential all confidential information of the other party, subject to certain exceptions.

In addition, the manufacturing agreement contains the following indemnification provisions. New Abraxis will indemnify New APP LLC, its affiliates and its officers, directors and employees and agents (which are referred to as the “APP indemnified parties”) from any damages incurred by or assessed against them resulting from a third-party claim caused by or alleged to be caused by (i) New Abraxis’ failure to perform its obligations under the manufacturing agreement (ii) any product liability claim arising from the negligence, fraud or intentional misconduct of New Abraxis or any of its affiliates or any product liability claim arising from its manufacturing obligations (or any failure or deficiency in New Abraxis’ manufacturing obligations) under the manufacturing agreement; (iii) any claim that the manufacture, use or sale of Abraxane^® or New Abraxis 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, the APP indemnified parties by reason of the $100 million limitation of liability described below. New Abraxis will also indemnify the APP indemnified parties for liabilities that they become subject to as a result of their activities under the manufacturing agreement and for which they are not responsible under the terms of the manufacturing agreement. New APP LLC will indemnify New Abraxis, and its affiliates, and their respective officers, directors, employees and agents from any damages incurred or assessed against them resulting from a third-party claim caused by or alleged to be caused by (i) New APP LLC’s gross negligence, bad faith, intentional misconduct or intentional failure to perform its obligations under the manufacturing agreement; and (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 LLC or its affiliates. The APP indemnified parties will not have any liability for monetary damages to New Abraxis or its affiliates or third parties in connection with the manufacturing agreement for damages in excess of $100 million in the aggregate, except to the extent that the damages are the result of (i) one of New APP LLC’s or New Abraxis’ executive officers in bad faith affirmatively instructing their employees to intentionally breach New APP LLC’s obligation to manufacture Abraxane^® or pipeline products under the manufacturing agreement or (ii) any intentional failure by New APP LLC, in bad faith, to cure any material breach of its obligation to manufacture Abraxane^® or pipeline products under the manufacturing agreement following notice of this breach.

For the period ended December 31, 2007, we had no earned margins relating to the manufacture of Abraxane for New Abraxis and recorded $0.3 million of facility management fees.

69

Real Estate Leases

Following the distribution, New Abraxis owns the manufacturing facility located on Ruby Street, Melrose Park, Illinois, and the research and development and the warehouse facility, both located in the same building on N. Cornell Avenue, Melrose Park, Illinois. We own the manufacturing facility located in Grand Island, New York. Following the distribution, the parties entered into a series of lease agreements to facilitate continued production of their respective pharmaceutical products while a manufacturing transition plan is being implemented. Under the terms of the lease agreements, New Abraxis leases the Ruby Street facility, consisting of approximately 122,000 square feet of office, warehouse and pharmaceutical manufacturing space, to us. The initial term of the lease expires on December 31, 2011 and may be renewed at New Abraxis’ option for one additional year if we are manufacturing a certain level of our products at the Ruby Street facility in the period prior to the expiration of the lease. During the term of the lease, New Abraxis will have access to the Ruby Street facility to perform certain elements of the manufacturing processes of Abraxane^® and other nab™ technology product candidates under the manufacturing agreement as well as, under certain circumstances, to provide contract manufacturing services to third parties. See “Manufacturing Agreement” above. In order to provide sufficient warehouse space to us during the term of the Ruby Street lease, New Abraxis also leased the Cornell Warehouse facility, consisting of approximately 71,000 square feet of warehouse space, to us. The initial term of the lease will be until December 31, 2011, and may be renewed at our option for one additional year if the lease for the Ruby Street manufacturing facility is extended. New Abraxis also leased the Cornell R&D facility, consisting of approximately 48,000 square feet of research and development space, to us. The initial term of the lease will be until December 31, 2010 and may be terminated upon twelve months written notice from and after January 1, 2009. This lease has no option to extend the term of the lease.

New Abraxis leased a portion of our Grand Island facility, consisting of approximately 5,700 square feet of pharmaceutical manufacturing space, to allow New Abraxis to perform its obligations under the manufacturing agreement. The initial term of the lease will be until December 31, 2011, and may be renewed at New Abraxis’ option for one additional year if New Abraxis has not received regulatory approvals from the European Medicines Agency (or “EMEA”), the European equivalent to the FDA, to manufacture Abraxane^® in at least two facilities (not including our Grand Island facility) by June 30, 2011.

For the period ended December 31, 2007, we incurred $0.2 million in net rental payments relating to these real estate leases.

From time to time in the ordinary course of business, we purchase active pharmaceutical ingredients or final dosage forms from Interchem Corporation and World Gen, LLC. Joseph M. Pizza, who became a director on December 19, 2007, is the president and chief executive officer of these entities. During the year ended December 31, 2007, we purchased a total of $20.7 million of products from these entities. As of December 31, 2007, we had approximately $3.8 million in accounts payable to these entities.

8. Accrued Liabilities

Accrued liabilities consist of the following at:

	December 31,
	2007		2006
	(in thousands)
Sales and marketing	$	13,814	$	26,876
Payroll and employee benefits		12,357		27,417
Legal and insurance		10,213		2,045
Accrued Separation Costs		1,993		—
Accrued Interest		4,024		92
Other		3,194		4,998
	$	45,595	$	61,428

70

9. Long-Term Debt and Credit Facilities

Senior Secured Credit Agreement

On November 13, 2007, we, our wholly-owned operating subsidiary APP Pharmaceuticals, LLC (“New APP LLC”) and APP Pharmaceuticals Manufacturing, LLC, a wholly-owned subsidiary of New APP LLC (“P.R. Borrower” and together with New APP LLC, the “Borrowers”) entered into a senior secured credit agreement (the “Credit Agreement”) with certain lenders and Deutsche Bank AG New York Branch, as Administrative Agent. The Credit Agreement provides for two term loan facilities: a Term Loan A facility for $500 million and a Term Loan B facility for $500 million. The Credit Agreement also provides for a revolving credit facility of $150 million. A portion of the proceeds from the debt financing was used to repay our existing indebtedness including fees and expenses related to the debt financing and $700 million was contributed to New Abraxis immediately prior to the separation.

Loan Repayments—Cumulative for each calendar year

(in thousands)

	Term Loan A		Term Loan B		Total
2008	$	—	$	5,000	$	5,000
2009		12,500		5,000		17,500
2010		50,000		5,000		55,000
2011		75,000		5,000		80,000
2012		100,000		5,000		105,000
2013		262,500		475,000		737,500
	$	500,000	$	500,000	$	1,000,000

The term loan facilities mature on November 13, 2013, and the revolving credit facility matures on November 13, 2012. The Term Loan A facility amortizes based on the following schedule: 0% in year one; 2.5% in year two; 10% in year three; 15% in year four; 20% in year five; and 52.5% in year six. The Term Loan B facility amortizes 1% in each of the first six years, with a balloon payment due at maturity. Amounts drawn under the term loan facilities or revolving credit facility bear the following annual interest rates: for the Term Loan A facility and the revolving credit facility, a rate at either an adjusted LIBOR, plus a margin of 2.25%, or an alternate base rate plus a margin of 1.25%; and for the Term Loan B facility, a rate at either an adjusted LIBOR, plus a margin of 2.50%, or an alternate base rate plus a margin of 1.50%. The revolving credit facility includes a $40 million sub-limit for swingline loans and a $20 million sub-limit for letters of credit. The interest rate margins are subject to step downs based on, among other things, our total leverage ratio. Effective February 14, 2008, we entered into interest rate swap agreements with an aggregate notional principal amount of $990 million to pay interest at a fixed rate of 3.04% and to receive interest at variable rate of one-month LIBOR. The interest rate swaps expire in February 2009.

The Credit Agreement contains a number of negative covenants restricting, among other things, indebtedness, liens, merger or transfer of substantially all assets of our company or the Borrowers, asset dispositions, distributions, dividends and repurchases of capital stock, prepayment or modification of certain other debt, acquisitions and investments, affiliate transactions, and limitations on dividends or other payments to subsidiaries or the parent company, APP Pharmaceuticals, Inc. We are required to comply with a senior secured leverage ratio test. The Credit Agreement contains customary events of default.

Beginning in December 2008, the Credit Agreement requires the Borrowers to prepay any outstanding loans, subject to specified exceptions, with (i) 50% of excess cash flow (with step downs to 0% based on our total leverage ratio), (ii) 100% of the net proceeds of non-ordinary course asset sales and any insurance or condemnation proceeds (with step downs to 75% based on our total leverage ratio), and (iii) 100% of the proceeds of any indebtedness not otherwise permitted to be incurred or issued under the Credit Agreement, subject to our total leverage ratio.

71

The obligations of New APP LLC under the term loan facilities and revolving credit facility are unconditionally guaranteed on a senior secured basis by our company and each direct and indirect wholly-owned domestic restricted subsidiary of New APP LLC (each, a “Subsidiary Guarantor”). The obligations of P.R. Borrower are unconditionally guaranteed by our company, New APP LLC and each future wholly-owned subsidiary of P.R. Borrower (each, a “P.R. Subsidiary Guarantor). The obligations and guarantees of the Borrowers are secured by a first-priority security interest in substantially all tangible and intangible assets (including a pledge of capital stock, limited to 65% for pledges of stock of foreign subsidiaries) of our company, New APP LLC and each Subsidiary Guarantor and, in the case of P.R. Borrower, such assets of P.R. Borrower and P.R. Subsidiary Guarantor.

As of December 31, 2007, $1 billion was outstanding on the term loans at a weighted average interest rate of 7.63%. There was no outstanding balance on the revolving credit facility. We were in compliance with all covenants at December 31, 2007.

$450 million Unsecured Credit Facility

On April 18, 2006, in connection with the closing of our merger with ABI, the prior APP and ABI facilities were replaced with a three-year, $450 million, unsecured credit facility, with a sub-limit of $10 million for standby and commercial letters of credit and $20 million for swing line loans. In connection with the closing of the merger, the amount outstanding under the ABI facility was repaid with borrowings from the new facility. There was no outstanding balance under the APP facility as of such date. Interest rates under the new facility vary depending on the type of loan made and our leverage ratio as defined in the agreement. The agreement contains various restrictive covenants pertaining to the maintenance of minimum net worth, leverage and interest coverage ratios. In addition, the agreement restricts our ability to declare or pay dividends, make future loans to third parties and incur other indebtedness. Fees of $1.7 million associated with the new agreement were capitalized and will be amortized over the term of the agreement and the remaining $0.6 million in unamortized debt acquisition costs related to the prior facilities were written off in the second quarter of 2006 in conjunction with the closing of the merger.

As of December 31, 2006, $165 million was outstanding on our credit facility at a weighted average interest rate of 6.1%. In November 2007, in connection with the closing of the separation, we repaid in full the outstanding balance on the unsecured credit facility and wrote off $0.8 million in unamortized deferred financing costs.

Note Payable

In connection with the Asset Purchase Agreement with AstraZeneca UK Limited, we agreed to pay $75 million of the purchase price upon the first year anniversary of the closing. At December 31, 2006, $75 million was outstanding on the note which was repaid in full in July of 2007.

No interest was capitalized during the years ended December 31, 2007, 2006 and 2005

10. Leases and Commitments

We have entered into various operating lease agreements for warehouses, office space, automobiles, communications, information technology equipment and software, and office equipment including the real estate leases, as described in Note 7—Related Party Transactions. Rental expense for continuing operations amounted to $3.2 million, $2.6 million and $2.4 million for the years ended December 31, 2007, 2006 and 2005, respectively.

72

As of December 31, 2007, total future annual minimum lease payments related to non-cancelable operating leases including amounts pertaining to related party leases as disclosed in Note 7 are as follows:

Year	Total Amount		Related Parties
	(in thousands)
2008	$	7,384	$	2,588
2009		5,118		2,588
2010		4,323		2,588
2011		3,138		1,675
2012		875		—
Thereafter		2,982		—
	$	23,820	$	9,438

11. Employee Benefit Plan

We sponsor a 401(k) defined-contribution plan, or 401(k) Plan, covering substantially all eligible employees. Employee contributions to the 401(k) Plan are voluntary. In January 2005, we adopted an enhanced 401(k) defined-contribution plan to replace the previous plan. Under the new plan, we contribute a qualified non-elective contribution in an amount equal to 3% of all eligible employee's compensation, regardless of participation in the plan with such employer contributions vesting immediately. Participants' contributions are limited to their annual tax deferred contribution limit as allowed by the Internal Revenue Service. Our total matching contributions to the 401(k) Plan on a continuing operations basis were $2.1 million, $1.9 million, and $1.7 million for the years ended December 31, 2007, 2006 and 2005, respectively. We may contribute additional amounts to the 401(k) Plan at our discretion although, we have never made a discretionary contribution to the 401(k) Plan.

12. Stockholders’ Equity

For accounting purposes, the 2006 merger between APP and ABI was accounted for as a downstream merger with ABI viewed as the surviving entity, although APP was the surviving entity for legal purposes. The merger was accounted for as an implied acquisition of APP’s minority ownership interest by ABI. As such, the historical carrying value of APP’s minority ownership interest was stepped up to its estimated fair value and that increase in value was recorded in additional paid-in-capital on the balance sheet.

Additionally, pre-acquisition stockholders’ equity and earnings per share were retroactively restated for the equivalent number of shares received by the accounting acquirer in the 2006 merger, with differences between the par value of the issuers and accounting acquirer’s stock recorded in paid-in-capital.

Common Stock Voting Rights

The holders of our common stock are entitled to one vote for each share held of record upon such matters and in such manner as may be provided by law.

Preferred Stock

We are authorized to issue up to 6,000,000 shares of preferred stock that is not designated as a particular class. Our Board of Directors may authorize and cause the issuance of the undesignated preferred stock in one or more series, determine the powers, preferences and rights and the qualifications, limitations or restrictions granted to or imposed upon any wholly unissued series of undesignated preferred stock and to fix the number of shares constituting any series and the designation of the series, without any further vote or action by our stockholders.

73

Dividends

As part of the separation and distribution, we distributed on a pro rata basis to holders of record of our common stock on November 13, 2007 one share of New Abraxis common stock for every four shares of our common stock held on that date, or 39.9 million common stock shares (see Note 3—Spin-off of New Abraxis above for more information). The distribution did not otherwise change the number of, or the rights associated with, outstanding shares of our common stock.

Other than the distribution of New Abraxis, we have never paid a dividend on any class of stock and have restrictions on the paying of cash dividends in the future. Our senior secured credit agreement limits cash dividend payments, subject to certain limitations, generally up to a maximum aggregate to $10 million. In the event that we liquidate, dissolve or wind-up, the holders of our common stock are entitled to share ratably in all assets remaining after payment of liabilities and liquidation preferences of any outstanding share of preferred stock. Holders of our common stock have no preemptive rights or rights to convert their common stock into any other securities.

Registration Rights

We granted registration rights to the former ABI shareholders with respect to all shares of our common stock they received in the 2006 merger. These holders of registrable securities have the right to require us to register all or a portion of the shares of our common stock they received in the merger. In addition, these holders of registrable securities may require us to include their shares in future registration statements that we file and may require us to register their shares for resale on a Form S-3 registration statement. Upon registration, the registered shares generally will be freely tradeable in the public market without restriction. However, in connection with any underwritten offering, the holders of registrable securities have agreed to lock up any other shares for up to 90 days and have agreed to a limit on the maximum number of shares that can be registered for the account of the holders of registrable securities under so-called “shelf” registration statements.

Except for underwriters’ discounts and commissions and certain marketing expenses, we will be obligated to pay all expenses for the first eight registration statements filed upon the request of a holder of registrable securities, and any other or additional expenses of registration are to be borne by the holders of registrable securities on a pro rata basis. These registration rights are subject to some conditions and limitations, among them the right of the underwriters of an offering to limit the number of shares included in registration. We will be obligated to indemnify the holders of these registration rights, and each selling holder will be obligated to indemnify us, against specified liabilities under the Securities Act of 1933, the Securities Exchange Act of 1934 and other applicable federal or state law.

Treasury Stock

We repurchased 58,718 of our shares in the 2006 third quarter for $1.5 million. The repurchase was funded using our internal cash resources and was held as treasury shares to be used for general corporate purposes. In aggregate, the 6,705,116 common shares held as treasury stock at December 31, 2006 had a cost basis of $8.61 per share. All treasury shares were cancelled as part of the separation and distribution of New Abraxis on November 13, 2007.

Increase in Authorized Shares

In connection with our 2006 merger with ABI, our Board of Directors approved an amendment to our certificate of incorporation to increase the authorized number of shares of common stock to 350,000,000, $0.001 par value per share. This charter amendment also was approved by the requisite vote of our stockholders pursuant to an action by written consent. Before giving effect to this charter amendment, our certificate of incorporation authorized us to issue 100,000,000 shares of common stock, $0.001 par value per share, and 6,000,000 shares of preferred stock, $0.001 par value per share. The authorized number of shares of preferred stock was not affected by the charter amendments.

74

13. Stock Options

We sponsor the following stock compensation plans:

1997 Stock Option Plan

Under the 1997 Stock Option Plan, or the 1997 Plan, options to purchase shares of our common stock were granted to certain employees and the directors with an exercise price equal to the estimated fair market value of our common stock on the date of grant. The 1997 Plan stock options vested upon completion of our initial public offering in December 2001.

2001 Stock Incentive Plan

The 2001 Stock Incentive Plan, or the 2001 Plan, provides for the grant of incentive stock options and restricted stock to our employees, including officers and employee directors, non-qualified stock options to employees, directors and consultants and other types of awards. At December 31, 2007, there were 18,210,995 options available for grant and 22,060,177 common shares reserved for the exercise of stock options under the 2001 Plan. Except as determined by our compensation committee, the number of shares reserved for issuance increases annually on the first day of each fiscal year by an amount equal to the lesser of a) 6,000,000 shares, b) 5% of the total number of shares outstanding as of that date or c) a number of shares as determined by our Board of Directors.

The compensation committee of our Board of Directors administers the 2001 Plan and has the authority to determine the terms and conditions of awards, including the types of awards, the number of shares subject to each award, the vesting schedule of the awards and the selection of the grantees. The exercise price of all options granted under the 2001 Plan will be determined by the compensation committee of our Board of Directors, but in no event will this price be less than the fair market value of our common stock on the date of grant.

2001 Non-Employee Director Stock Option Program

The 2001 Non-Employee Director Stock Option Program, or the 2001 Program, was adopted as part, and is subject to the terms and conditions, of the 2001 Plan. The 2001 Program establishes a program for the automatic grant of awards to our non-employee directors at the time that they initially join the board and at each annual meeting of the stockholders at which they are elected.

Restricted Stock

At December 31, 2007, 487,397 restricted units were outstanding under our 2001 Stock Incentive Plan with a weighted average per share market value of $12.56 and with vesting dates ranging from March 2008 to June 2011. Upon vesting, each restricted unit entitles the holder to one share of common stock. Compensation expense related to restricted stock grants is based upon the market price on the date of grant and is charged to earnings on a straight-line basis over the applicable vesting period. Restricted stock units currently granted generally vest ratably over a four year period. Restricted stock awards relating to the 2001 Stock Incentive Plan are accounted for under the equity method per FAS 123(R).

Restricted Unit Plan

In connection with the separation, we assumed the restricted units previously granted to our employees under the American BioScience Restricted Unit Plan II. Those awards are now governed under the APP Pharmaceuticals, Inc. Restricted Stock Unit Plan (the “RSU Plan”). Shares of our common stock are issuable upon the vesting of these units. The units issued under the RSU Plan vest one-half on April 18, 2008 (which is the second anniversary of the closing of the merger between Old Abraxis, then known as American

75

Pharmaceutical Partners, and American BioScience). The balance of the shares will vest on April 18, 2010. The restricted stock units entitle their holders to receive a number of our shares of common stock on each vesting date determined by taking the value of the vested portion of the award divided by our average trading price over the three days prior to vesting; except that if the average trading price of our stock price is less than $14.47, then the notional price is divided by $14.47. The maximum number of our shares that may be issuable under this restricted unit plan is 345,542 shares.

Pursuant to an agreement between Old Abraxis and RSU Plan LLC (“RSU LLC”), RSU LLC has agreed that prior to the date on which restricted stock units issued pursuant to the RSU Plan become vested, RSU LLC will deliver, or cause to be delivered, to us the number of our shares of common stock or cash (or a combination thereof) in an amount sufficient to satisfy the obligations to participants under the RSU Plan of the vested restricted units. We are required to satisfy our obligations under the RSU Plan by paying to the participants cash and/or shares of our common stock in the same proportion as was delivered by the RSU LLC. The intention of this agreement is to have RSU LLC satisfy our obligations under the RSU Plan so that there would not be any further dilution to our stockholders as a result of our assumption of certain awards under the American BioScience Restricted Unit Plan II.

Excluding the effects of discontinued operations stock based compensation costs for RSU awards for the years ended December 31, 2007, 2006 and 2005 were $6.0 million, $2.0 million and $1.0 million, respectively. As of December 31, 2007, there was $5.4 million of total unrecognized compensation expense related to restricted stock granted under the company’s equity incentive plans which is expected to be recognized over a weighted average period of 1.86 years.

Employee Stock Purchase Plan

Under the 2001 Employee Stock Purchase Plan, or the ESPP, eligible employees may contribute up to 10% of their base earnings toward the semi-annual purchase and issuance of our common stock. The employees’ purchase price is the lesser of 85% of the fair market value of the stock on the first business day of the offer period or 85% of the fair market value of the stock on the last business day of the semi-annual purchase period. Employees can purchase no more than 625 shares of our common stock within any given purchase period. An aggregate of 9,238,726 shares of our common stock were reserved for issuance under the ESPP at December 31, 2007. The ESPP provides for annual increases in the number of shares of our common stock issuable under the ESPP equal to the lesser of: a) 3,000,000 shares; b) a number of shares equal to 2% of the total number of shares outstanding; or c) a number of shares as determined by our Board of Directors. During the year ended December 31, 2007, approximately 220,000 shares of our stock were issued under the ESPP for an aggregate purchase price of $3.8 million. On August 7, 2007, in connection with the separation of Old Abraxis’ proprietary products business, Old Abraxis’ Compensation Committee indefinitely suspended the ESPP from and after completion of the purchase period that ended on July 31, 2007.

Stock Options

We account for stock-based compensation in accordance with FAS 123(R), which requires the recognition of compensation cost for all share-based payments, including employee stock options, at fair value. We use the straight-line attribution method to recognize share-based compensation expense over the vesting period of the award. Options currently granted generally expire ten years from the grant date and vest ratably over a four-year period.

In accordance with FAS 123(R), we adjust stock-based compensation on a quarterly basis for revisions to the estimated rate of equity award forfeitures based on actual forfeiture experience. The effect of adjusting the forfeiture rate for all expense amortization after January 1, 2005 will be recognized in the period the forfeiture estimate is changed. During the fourth quarter of 2007, we revised the forfeiture rate with respect to stock options. The effect of the change in the forfeiture rate resulted in a reduction in stock compensation expense of $2.1 million in the quarter. No changes in estimated rate of forfeitures were made during 2005 or 2006.

76

As of December 31, 2007, there was $7.0 million of total unrecognized compensation expense related to stock options granted under the company’s equity incentive plans which is expected to be recognized over a weighted average period of 2.15 years.

The fair values of options granted during the years ended December 31, 2007, 2006 and 2005 were determined using the Black-Scholes option pricing model, which incorporates various assumptions. The risk-free rate of interest for the average contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is zero as we do not anticipate paying any dividends. The expected term of awards granted is based upon the historical exercise patterns of the participants in our plans and expected volatility is based on the historical volatility of our stock over the expected term of the award. The weighted average estimated values of employee stock option grants and rights granted under our employee stock purchase plan as well as the weighted average assumptions that were used in calculating such values during the last three years were based on estimates at the date of grant as follows:

	Twelve Months Ended December 31,
	2007			2006			2005
Stock Options
Risk-free rate		4.1	%		3.9	%		3.9	%
Dividend yield		—			—			—
Expected life in years		5			5			5
Volatility		55	%		59	%		46	%
Fair value of options granted	$	1,440,389		$	21,395,865		$	15,583,788
Weighted average grant date fair value of options granted	$	5.76		$	13.23		$	20.01
Employee Stock Purchase Plan
Risk-free rate		4.0	%		2.8	%		2.2	%
Dividend yield		—			—			—
Expected life in years		1.2			1.2			1.2
Volatility		60	%		48	%		46	%

Our stock options outstanding that have vested and are expected to vest as of December 31, 2007 were as follows:

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intinsic Value(1)
Vested	1,695,836	$	10.83	5.39	$	18,365,299
Expected to Vest	1,411,880		15.49	8.35		21,869,890
Total	3,107,716	$	12.95	6.73	$	40,235,189

(1) These amounts represent the difference between the exercise price and $10.27, the closing price of APP Pharmaceuticals stock on December 31, 2007 for in-the-money options.

The above options outstanding that are expected to vest are net of estimated future option forfeitures in accordance with the provisions of FAS 123(R). Options with a fair value of $5.9 million and $8.3 million and with weighted average grant date fair values of $7.62 and $13.62 vested during the twelve months ended December 31, 2007 and 2006, respectively. Options with a fair value of $0.7 million and $5.6 million, weighted average grant date fair values of $3.83 and $8.68 and aggregate intrinsic values of $1.1 million and $10.6 million were exercised during the twelve months ended December 31, 2007 and 2006, respectively. Non-vested options totalling 1,411,885 and 2,188,175 shares with weighted average grant date fair values of $7.59 and $15.02 were outstanding at December 31, 2007 and 2006, respectively.

77

Additional information with respect to our stock option activity is as follows:

	Options Outstanding				Exercisable Options
	Shares		Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
Outstanding at December 31, 2004	4,970,137		$	13.24	2,625,886	$	5.62
Granted	778,800		$	45.91
Exercised	(1,760,444	)	$	6.92
Forfeited	(416,496	)	$	31.23
Outstanding at December 31, 2005	3,571,997		$	21.36	1,774,537	$	11.31
Granted	1,617,550		$	28.40
Exercised	(644,030	)	$	12.46
Forfeited	(573,646	)	$	34.18
Outstanding at December 31, 2006	3,971,871		$	23.81	1,783,696	$	14.94
Granted	437,000		$	23.41
Exercised	(398,871	)	$	8.17
Forfeited	(363,285	)	$	35.15
Outstanding at November 13, 2007	3,646,715		$	24.39	1,960,183	$	20.18
Separation Conversion(1)	(514,245	)
Granted	42,500		$	10.28
Exercised	(39,468	)	$	4.91
Forfeited	(27,786	)	$	15.67
Outstanding at December 31, 2007	3,107,716		$	12.95	1,695,836	$	10.83

(1) As part of the separation, stock options relating to employees of New Abraxis were eliminated and stock options for our employees were converted to reflect the adjusted value of the options post-separation. The number of options outstanding on the split date and the associated exercise prices were converted at a rate of 1.9533, which was based on our closing stock price for the 10 consecutive trading days preceding and 10 consecutive trading days following the separation. No additional stock compensation expense resulted from the modifications made due to the anti-dilutive provisions related to the plan.

The following table summarizes information about our stock options outstanding at December 31, 2007:

	Options Outstanding				Options Exercisable
Exercise Price Ranges	Number of Shares	Weighted Average Remaining Contractual Life	Weighted- Average Exercise Price		Number of Shares	Weighted Average Exercise Price
$  0.00    –  $  2.70	290,312	1.4	$	1.30	290,312	$	1.30
$  2.70    –  $  5.40	112,663	4.1	$	4.11	112,663	$	4.11
$  5.40    –  $  8.10	393,416	5.0	$	6.48	393,416	$	6.48
$  8.10    –  $10.80	138,693	8.9	$	10.27	31,370	$	10.27
$10.80    –  $13.50	460,808	7.7	$	12.49	212,648	$	12.80
$13.50    –  $16.21	1,193,814	8.1	$	15.23	363,980	$	15.24
$16.21    –  $18.91	97,115	6.3	$	17.80	62,197	$	17.81
$18.91    –  $21.61	109,131	7.2	$	20.63	65,671	$	20.46
$21.61    –  $24.31	243,650	7.0	$	23.60	128,914	$	23.59
$24.31    –  $27.01	68,114	7.0	$	25.68	34,665	$	25.70
	3,107,716	6.7	$	12.95	1,695,836	$	10.83

78

14. Income Taxes

The provisions for income tax for continuing operations consists of the following:

	Year Ended December 31,
	2007			2006			2005
	(in thousands)
Current:
Federal	$	49,925		$	86,709		$	42,172
State		8,788			5,069			4,205
Foreign		4,376			2,970			1,696
Total current		63,089			94,748			48,073
Deferred:
Federal		(7,381	)		(26,610	)		(16,080	)
State		(707	)		421			(1,584	)
Total deferred		(8,088	)		(26,189	)		(17,664	)
Total provision for income taxes	$	55,001		$	68,559		$	30,409

A reconciliation of the federal statutory rate to our effective tax rate is as follows (in %):

	Year Ended December 31,
	2007		2006		2005
Tax provision at statutory federal rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal income tax benefit	3.8		3.7		3.4
In-process research and development	—		6.9		—
Research and development tax credits	(0.7	)	(3.6	)	(2.7	)
Minority interest	—		3.5		16.3
Foreign rate differential	6.2		3.3		—
Domestic production activities deduction	(2.1	)	(1.8	)	(2.1	)
Stock based compensation	1.0		0.1		—
Other items	(2.3	)	8.3		0.2
Change in FIN 48 liability	(0.8	)	—		—
Income tax expense	40.1	%	55.4	%	50.1	%

79

Deferred tax assets and liabilities consist of the following:

	December 31,
	2007			2006
	(in thousands)
Deferred tax assets:
Inventory	$	8,500		$	11,770
Milestone payment		—			3,578
Deferred revenue		—			79,341
Net operating loss and credit carryforwards		—			753
Amortization of stock-based compensation		4,190			4,017
Other accruals and reserves		4,419			8,265
Total deferred tax assets		17,109			107,724
Deferred tax liabilities:
Intangible asset amortization		(64,239	)		(157,479	)
Depreciation		(5,305	)		(13,725	)
Foreign exchange		(1,374	)		—
Other accruals and reserves		(93	)		(128	)
Total deferred tax liabilities		(71,011	)		(171,332	)
Net deferred tax liability	$	(53,902	)	$	(63,608	)

We adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”), on January 1, 2007. This interpretation clarifies what criteria must be met prior to the recognition of the financial statement benefit of a position taken in a tax return in accordance with FASB Statement No. 109, Accounting for Income Taxes. The effect of the implementation of FIN 48 was not material.

Following is a reconciliation of our total gross unrecognized tax benefits for the year-to-date at December 31, 2007 (in thousands). All of the total tax benefits of $3.0 million, if recognized, would affect our effective tax rate in future periods.

Balance, January 1, 2007	$	4,557
Additions for tax positions related to current year		835
Additions for tax positions related to prior years		662
Reductions for tax periods of prior years		(3,095	)
Balance, December 31, 2007	$	2,959

We recognize interest and penalties related to unrecognized tax benefits in its income tax expense. At December 31, 2007, we had accrued $0.1 million for the payment of such interest.

We and our subsidiaries file income tax returns in the US Federal jurisdiction, Canada, Puerto Rico, and various state jurisdictions. We are subject to US federal income tax examinations for calendar years 2006 and 2007. We are also subject to Canadian income tax examinations for 2005 through 2007 tax years, and to Puerto Rican income tax examinations for 2006 and 2007 tax years. Additionally, we are subject to various state income tax examinations for the 2003 through 2007 tax years. We are currently under state income tax examinations in California, Illinois, Massachusetts and North Carolina for various tax years. There are no other open federal, state, or foreign government income tax audits at this time.

80

15. Regulatory Matters

We are subject to regulatory oversight by the United States Food and Drug Administration and other regulatory authorities with respect to the development and manufacturing of its products. Failure to comply with regulatory requirements can have a significant effect on our business and operations. Management has designed and operates a system of controls to attempt to ensure compliance with regulatory requirements.

16. Litigation

In October 2007, Old Abraxis entered into a settlement agreement and release with respect to all disputes with a former officer and employee of ABI. Under the separation and distribution agreement, New Abraxis assumed all liabilities relating to litigation with this individual. Pursuant to the indemnification provisions of the definitive agreements for the 2006 merger, the former ABI shareholders indemnified Old Abraxis for approximately two-thirds of the obligations under the settlement agreement and the amount is recorded in our statement of cash flows as non-cash issuance for legal expenses while the entire settlement is reflected in our statement of operations as discontinued operations.

We are from time to time subject to claims and litigation arising in the ordinary course of business. These claims have included assertions that our products infringe existing patents, product liability and also claims that the use of our products has caused personal injuries. We intend to defend vigorously any such litigation that may arise under all defenses that would be available to us. In the opinion of management, the ultimate outcome of proceedings of which management is aware, even if adverse to us, will not have a material adverse effect on our consolidated financial position or results of operations.

17. Total Revenue by Product Line

With the spin-off of New Abraxis, we currently maintain only one operating segment, hospital-based. Total revenue by product line were as follows:

	2007		2006		2005
	(in thousands)
Critical care	$	382,772	$	302,244	$	163,581
Anti-infective		193,704		213,490		169,818
Oncology		55,308		57,872		51,084
Contract manufacturing and other		15,590		9,595		599
Total revenue	$	647,374	$	583,201	$	385,082

18. Unaudited Quarterly Financial Data

Selected quarterly data for 2007 and 2006 is as follows:

	Year Ended December 31, 2007
	First		Second		Third			Fourth
	(in thousands, except per share data)
Net revenue	$	140,268	$	159,327	$	153,179		$	194,600
Gross profit		65,437.0		80,150.0		68,124.0			101,617.0
Income (loss) from continuing operations		13,617.0		22,792.0		14,110.0			31,660.0
Net Income (Loss)	$	11,115	$	23,096	$	(8,385	)	$	8,532
Income (loss) from continuing operations per common share:
Basic	$	0.09	$	0.14	$	0.09		$	0.20
Diluted	$	0.08	$	0.14	$	0.09		$	0.20
Net income (loss) per common share:
Basic	$	0.07	$	0.14	$	(0.05	)	$	0.05
Diluted	$	0.07	$	0.14	$	(0.05	)	$	0.05

81

During the 4th quarter of 2007, we revised our forfeiture rate with respect to stock options. As a result of this change in estimate, the 4th quarter includes a benefit of $2.1 million relating to stock compensation.

	Year Ended December 31, 2006
	First		Second			Third		Fourth
	(in thousands, except per share data)
Net revenue	$	113,472	$	120,255		$	149,768	$	199,706
Gross profit	$	59,950	$	58,371		$	68,355	$	108,446
Income (loss) from continuing operations	$	14,211	$	(11,959	)	$	16,344	$	36,629
Net Income (Loss)	$	1,884	$	(90,787	)	$	13,557	$	28,449
Income (loss) from continuing operations per common share:
Basic	$	0.09	$	(0.08	)	$	0.11	$	0.23
Diluted	$	0.09	$	(0.08	)	$	0.11	$	0.23
Net income (loss) per common share:
Basic	$	0.01	$	(0.57	)	$	0.09	$	0.18
Diluted	$	0.01	$	(0.57	)	$	0.09	$	0.18

82

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

We maintain disclosure controls and procedures, as such term is defined under Exchange Act Rules 13a-15(e) and 15d-15(e), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosures. In designing and evaluating our disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives and in reaching a reasonable level of assurance we necessarily are required to apply judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our management, with participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the fiscal year covered by this report. Based on their evaluation and subject to the foregoing, management concluded that our disclosure controls and procedures were effective as of December 31, 2007.

(b) Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Internal control over financial reporting includes those written policies and procedures that:

• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America;

• provide reasonable assurance that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the consolidated financial statements.

Internal control over financial reporting includes the controls themselves, monitoring and internal auditing practices and actions taken to correct deficiencies as identified.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2007. In making this assessment, management used the criteria set forth by the Committee of Sponsoring

83

Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of its internal control over financial reporting. Management reviewed the results of its assessment with the Audit Committee of our Board of Directors.

Based on this assessment, management believes that we maintained effective internal control over financial reporting as of December 31, 2007, based on those criteria.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2007 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report below.

(c) Changes in internal controls.

As reported in the Annual Report on Form 10-K for the year ended December 31, 2006, and in the Quarterly Reports on Form 10-Q for each of the first three quarters of 2007, management identified a material weakness in internal controls over the accounting for income taxes. As a result of this material weakness, management concluded in its 2006 Annual Report on Form 10-K that the company’s internal controls over financial reporting were not effective as of December 31, 2006.

During 2007, management carried out an evaluation of the company’s internal controls over financial reporting related to the accounting for income taxes. The company identified and undertook the following steps to remediate the material weakness described above:

• With the help of external advisors (other than the company’s independent registered public accounting firm), existing income tax-related controls were enhanced with standardized documentation, and additional controls were added as necessary to identify and quantify potential issues.

• Organizational structure changes were implemented to enhance efficiencies, effectiveness, and accountability of the company’s tax department. Key tax positions were established to ensure tax processes and key controls are monitored and sustainable over time.

• The company provided additional training and education efforts in the tax areas.

The planned remediation steps set forth above were designed and initiated following the identification of the material weakness and deployed as soon as practicable throughout fiscal year 2007. The company undertook and completed, as appropriate, testing to validate the design and operating effectiveness of its existing and newly implemented procedures and controls described above for the quarters ended September 30, 2007 and December 31, 2007. In reviewing the results from this testing, management has concluded that the internal controls related to the accounting for income taxes have been significantly improved and that the above referenced material weakness in internal control over financial reporting related to the accounting for income taxes has been remediated as of December 31, 2007.

Management has determined that, as of December 31, 2007 other than as described above, there were no other changes in our internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f), that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. OTHER INFORMATION

None.

84

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of APP Pharmaceuticals, Inc.

We have audited APP Pharmaceuticals, Inc.’s internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). APP Pharmaceuticals, Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying management report entitled Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, APP Pharmaceuticals, Inc. maintained in all material respects, effective internal control over financial reporting as of December 31, 2007, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of APP Pharmaceuticals, Inc. as of December 31, 2007 and 2006, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2007 of APP Pharmaceuticals, Inc. and our report dated March 17, 2008 expressed an unqualified opinion thereon.

/s/    ERNST & YOUNG LLP        

Chicago, Illinois

March 17, 2008

85

PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item will be contained in the Proxy Statement for our 2008 Annual Meeting of Stockholders and is incorporated herein by reference.

Item 11. EXECUTIVE COMPENSATION

The information required by this item will be contained in the Proxy Statement for our 2008 Annual Meeting of Stockholders and is incorporated herein by reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item will be contained in the Proxy Statement for our 2008 Annual Meeting of Stockholders and is incorporated herein by reference.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item will be contained in the Proxy Statement for our 2008 Annual Meeting of Stockholders and is incorporated herein by reference.

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The information required by this item will be contained in the Proxy Statement for our 2008 Annual Meeting of Stockholders and is incorporated herein by reference.

PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K

a. (1) Financial Statements

The following consolidated financial statements of APP Pharmaceuticals, Inc. are included in Part II, Item 8 of this Report:

Management’s Report on Internal Control over Financial Reporting

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets at December 31, 2007 and 2006

Consolidated Statements of Income for the Years Ended December 31, 2007, 2006 and 2005

Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2007, 2006 and 2005

Consolidated Statements of Cash Flows for the Years Ended December 31, 2007, 2006 and 2005

Notes to Consolidated Financial Statements

(2) Financial Statement Schedule

The following consolidated financial statement schedule of APP Pharmaceuticals, Inc. is filed as part of this Report:

Schedule II. Valuation and Qualifying Accounts and Reserves

86

All other schedules are omitted because the required information is not present or is not present in amounts sufficient to require submission of the schedule or because the information required is given in the consolidated financial statements or the notes thereto.

(3) Exhibits

The exhibits are as set forth in the Exhibit Index.

87

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, State of California on the 17 day of March 2008.

APP Pharmaceuticals, Inc.
By:	/s/    PATRICK SOON-SHIONG, M.D.
	Patrick Soon-Shiong, M.D. Chairman of the Board of Directors and Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Patrick Soon-Shiong, M.D., Lisa Gopalakrishnan and Richard E. Maroun, and each of them, as attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendment to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Commission, granting to said attorneys-in-fact, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Partnership in the capacities and on the dates indicated.

Signature	Title	Date
/s/    PATRICK SOON-SHIONG, M.D.         Patrick Soon-Shiong, M.D.	Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer)	March 17, 2008
/s/    LISA GOPALAKRISHNAN         Lisa Gopalakrishnan	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	March 17, 2008
/s/    MICHAEL D. BLASZYK         Michael D. Blaszyk	Director	March 17, 2008
/s/    MICHAEL S. SITRICK         Michael S. Sitrick	Director	March 17, 2008
/s/    JOSEPH M. PIZZA         Joseph M. Pizza	Director	March 17, 2008
/s/    STUART DEPINA         Stuart DePina	Director	March 17, 2008
/s/    RAMESH GOPALAKRISHNAN         Ramesh Gopalakrishnan	Director	March 17, 2008

88

APP Pharmaceuticals, Inc.

Schedule II—Valuation and Qualifying Accounts For the Three Years Ended December 31, 2007

Allowance for doubtful accounts:

Column A	Column B		Column C			Column D		Column E
Description	Balance at beginning of period		Additions charged to costs and expenses			Deductions		Balance at end of period
	(in thousands)
Year ended December 31, 2007	$	100	$	7		$	7	$	100
Year ended December 31, 2006	$	627	$	(472	)	$	55	$	100
Year ended December 31, 2005	$	632	$	4		$	9	$	627

EXHIBIT INDEX

Exhibit Number	Description
2.1	Agreement and Plan of Merger, dated as of November 27, 2005, by and among American Pharmaceutical Partners, Inc., American BioScience, Inc. (“ABI”) and, with respect to specified matters, certain ABI shareholders (Incorporated by reference to Exhibit 2.1 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 29, 2005)
2.2	Agreement and Plan of Reorganization, dated as of November 13, 2007, by and among the Registrant, Abraxis BioScience, Inc. and Abraxis BioScience, LLC (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 13, 2007)
2.3†	Separation and Distribution Agreement among the Registrant, Abraxis BioScience, LLC, APP Pharmaceuticals, LLC and Abraxis BioScience, Inc. (f/k/a New Abraxis, Inc.)
3.1	Amended and Restated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 13, 2007)
3.2	Bylaws of the Registrant (Incorporated by reference to Exhibit 3.2 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 13, 2007)
4.1	Reference is made to Exhibits 3.1 and 3.2
4.2†	Specimen Stock Certificate of the Registrant
4.3	Registration Rights Agreement, dated April 18, 2006, by and among the Registrant and the ABI shareholders set forth therein (Incorporated by reference to Exhibit 4.4 to Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 10, 2006)
10.1†	Separation and Distribution Agreement among the Registrant, Abraxis BioScience, LLC, APP Pharmaceuticals, LLC and Abraxis BioScience, Inc. (f/k/a New Abraxis, Inc.) (Filed as Exhibit 2.3 hereto)
10.2†	Tax Allocation Agreement among the Registrant, Abraxis BioScience, LLC, APP Pharmaceuticals, LLC and Abraxis BioScience, Inc. (f/k/a New Abraxis, Inc.)
10.3†	Transition Services Agreement between the Registrant and Abraxis BioScience, Inc. (f/k/a New Abraxis, Inc.)
10.4†	Employee Matters Agreement among the Registrant, APP Pharmaceuticals, LLC, Abraxis BioScience, LLC and Abraxis BioScience, Inc. (f/k/a New Abraxis, Inc.)
10.5†*	Manufacturing Agreement between APP Pharmaceuticals, LLC and Abraxis BioScience, Inc. (f/k/a New Abraxis, Inc.)
10.6†	Lease Agreement between APP Pharmaceuticals, LLC and Abraxis BioScience, LLC for the premises located at 2020 Ruby Street, Melrose Park, Illinois
10.7†	Lease Agreement between APP Pharmaceuticals, LLC and Abraxis BioScience, LLC for the warehouse facilities located at 2045 N. Cornell Avenue, Melrose Park, Illinois
10.8†	Lease Agreement between APP Pharmaceuticals, LLC and Abraxis BioScience, LLC for the research and development facility located at 2045 N. Cornell Avenue, Melrose Park, Illinois
10.9†	Lease Agreement between Abraxis BioScience, LLC and APP Pharmaceuticals, LLC for the premises located at 3159 Staley Road, Grand Island, New York
10.10	Form of Indemnification Agreement between the Registrant and each of its executive officers and directors (Incorporated by reference to Registrant’s Registration Statement filed on Form S-1/A, file number 333-70900, filed with the Securities and Exchange Commission on November 20, 2001)

Exhibit Number	Description
10.11	1997 Stock Option Plan (Incorporated by reference to the Registrant’s Registration Statement filed on Form S-1, file number 333-70900, filed with the Securities and Exchange Commission on October 3, 2001)
10.12	2001 Stock Incentive Plan, including forms of agreements thereunder (Incorporated by reference to the Registrant’s Definitive Proxy Statement on Form 14A filed with the Securities and Exchange Commission on April 29, 2005)
10.13	2001 Employee Stock Purchase Plan, including forms of agreements thereunder (Incorporated by reference to the Registrant’s Registration Statement filed on Form S-1, file number 333-70900, filed with the Securities and Exchange Commission on October 3, 2001)
10.14	Lease Agreement between Manufacturers Life Insurance Company (U.S.A.) and the Registrant for 1501 E. Woodfield Road, Suite 300 East Schaumburg, Illinois, known as Schaumburg Corporate Center (Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 23, 2005)
10.15	Description of Non-Employee Director Cash Compensation Program (Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 25, 2005)
10.16	Amended and Restated 2001 Non-Employee Director Option Program (Incorporated by reference to Exhibit 10.26 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 25, 2005)
10.17	Purchase and Sale Agreement, dated April 24, 2006, between the Registrant and Pfizer, Inc. (Incorporated by reference to Exhibit 10.26 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 10, 2006)
10.18*	Asset Purchase Agreement, dated April 26, 2006, between the Registrant and AstraZeneca UK Limited (Incorporated by reference to Exhibit 10.14 to the Registrant’s Quarterly Report on Form 10-Q/A filed with the Securities and Exchange Commission on August 10, 2006)
10.19*	Amended to the Asset Purchase Agreement, dated June 28, 2006, between the Registrant and AstraZeneca UK Limited (Incorporated by reference to Exhibit 10.15 to the Registrant’s Quarterly Report on Form 10-Q/A filed with the Securities and Exchange Commission on August 10, 2006)
10.20*	Manufacturing and Supply Agreement, dated June 28, 2006, between the Registrant and AstraZeneca LP. (Incorporated by reference to Exhibit 10.17 to the Registrant’s Quarterly Report on Form 10-Q/A filed with the Securities and Exchange Commission on August 10, 2006)
10.21*	Manufacturing and Supply Agreement, dated June 28, 2006, between the Registrant and AstraZeneca Pharmaceuticals LP. (Incorporated by reference to Exhibit 10.18 to the Registrant’s Quarterly Report on Form 10-Q/A filed with the Securities and Exchange Commission on August 10, 2006)
10.22	Retention Agreement, dated as of November 20, 2006, between the Registration and Thomas H. Silberg (Incorporated by reference to Exhibit 10.24 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2007)
10.23	Retention Agreement, dated as of November 20, 2006, between the Registration and Frank Harmon (Incorporated by reference to Exhibit 10.25 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2007)
10.24†	Credit Agreement, dated November 13, 2007, among the Registrant, APP Pharmaceuticals LLC, APP Pharmaceuticals Manufacturing LLC and the other parties thereto, including an amendment thereto
14.1	Code of Business Conduct (Incorporated by reference to Exhibit 14.1 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2007)

Exhibit Number	Description
21.1†	List of Subsidiaries of the Registrant
23.1†	Consent of Independent Registered Public Accounting Firm
24.1	Power of Attorney (included on signature page)
31.1†	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2†	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1†	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002
32.2†	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002

† Filed herewith.

* Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment filed with the Securities and Exchange Commission.

EX-2.3

Exhibit 2.3

EXECUTION COPY

SEPARATION AND DISTRIBUTION AGREEMENT

among

APP PHARMACEUTICALS, INC.

(f/k/a GENERICO HOLDINGS, INC.)

APP PHARMACEUTICALS, LLC

ABRAXIS BIOSCIENCE, LLC

and

NEW ABRAXIS, INC. (to be renamed

ABRAXIS BIOSCIENCE, INC.)

Dated as of November 13, 2007

TABLE OF CONTENTS

		Page
ARTICLE I. DEFINITIONS		2
Section 1.01.	Definitions	2
ARTICLE II. PRE-DISTRIBUTION TRANSACTIONS		13
Section 2.01.	Transactions	13
Section 2.02.	Effect on Capital Stock	14
Section 2.03.	Documents to Be Delivered By New Alpha and Generico	14
Section 2.04.	Financial Instruments	14
Section 2.05.	Related Party Agreements; Intercompany Accounts	15
Section 2.06.	Other Transaction Agreements	15
ARTICLE III. THE GENERICO CONTRIBUTION; THE SHARE DISTRIBUTION		16
Section 3.01.	Transfer of Generico Assets and Alpha Assets and Assumption of Generico Liabilities and Alpha Liabilities	16
Section 3.02.	[Intentionally Omitted.]	26
Section 3.03.	The Distribution Agent	26
Section 3.04.	[Intentionally Omitted.]	26
Section 3.05.	Delivery of Distribution Shares	26
Section 3.06.	Registration Statement; Information Statement; Other Filings	27
Section 3.07.	The Share Distribution	27
Section 3.08.	Actions In Connection with the Share Distribution	27
Section 3.09.	Sole Discretion	27
Section 3.10.	Conditions to the Generico Contribution and the Share Distribution	28
ARTICLE IV. MUTUAL RELEASE; INDEMNIFICATION		29
Section 4.01.	Mutual Release	29
Section 4.02.	Indemnification by the Generico Parties	30
Section 4.03.	Indemnification by the Alpha Parties	31
Section 4.04.	Notice of Claims	31

i

Section 4.05.	Determination of Amount	32
Section 4.06.	Third Party Claims	32
Section 4.07.	Exclusive Remedy	34
Section 4.08.	Limitations	34
Section 4.09.	Survival of Indemnities	34
Section 4.10.	Exclusivity of Tax Allocation Agreement	34
Section 4.11.	Exclusivity of Employee Matters Agreement	35
Section 4.12.	Other Transaction Agreements	35
ARTICLE V. CERTAIN OTHER MATTERS		35
Section 5.01.	Insurance	35
Section 5.02.	Use of Names	37
Section 5.03.	Subsequent Transfers	39
Section 5.04.	Reporting Cooperation	39
Section 5.05.	Post-Transaction Actions	40
ARTICLE VI. ACCESS TO INFORMATION		40
Section 6.01.	Provision of Corporate Records	40
Section 6.02.	Access to Information	40
Section 6.03.	Production of Witnesses	42
Section 6.04.	Retention of Records	42
Section 6.05.	Confidentiality	42
ARTICLE VII. TERMINATION		43
Section 7.01.	Termination	43
Section 7.02.	Effect of Termination	43
ARTICLE VIII. MISCELLANEOUS		44
Section 8.01.	Entire Agreement; Construction	44
Section 8.02.	Survival of Agreements	44
Section 8.03.	Governing Law	44
Section 8.04.	Notices	44
Section 8.05.	Expenses	45
Section 8.06.	Consent to Jurisdiction	45
Section 8.07.	Amendments	45

ii

Section 8.08.	Assignment	46
Section 8.09.	Captions; Currency	46
Section 8.10.	Severability	46
Section 8.11.	Parties in Interest	46
Section 8.12.	Schedules	47
Section 8.13.	Waivers; Remedies	47
Section 8.14.	Further Assurances	47
Section 8.15.	Counterparts	47
Section 8.16.	Performance	47
Section 8.17.	Interpretation	47
Section 8.18.	Limited Liability	48
Section 8.19.	Enforcement	48
Section 8.20.	Mutual Drafting	48

SCHEDULES

Schedule 3.01(c)(ix)(x)	Alpha Grand Island and Ruby Street Machinery and Equipment
Schedule 3.01(c)(ix)(y)	Generico Cornell Machinery and Equipment
Schedule 3.01(c)(xi)	Product Applications
Schedule 3.01(c)(xii)	Product Approvals
Schedule 3.01(c)(xvi)	Contributed Real Property
Schedule 3.01(c)(xvii)	Contributed Real Property Leases
Schedule 3.01(d)(i)	Alpha Assets
Schedule 3.01(e)(ii)	Generico Liabilities
Schedule 3.01(e)(iii)	Generico Litigation Liabilities
Schedule 3.01(f)(iii)	Generico Transaction Liabilities
Schedule 3.01(m)(viii)	Cruz Devila Property Schedule

iii

This SEPARATION AND DISTRIBUTION AGREEMENT (this “Agreement”), dated as of November 13^th, 2007, is among APP Pharmaceuticals, Inc., a Delaware corporation formerly known as Generico Holdings, Inc. (“Gholdco”), APP Pharmaceuticals, LLC, a Delaware limited liability company (“Generico”) (Gholdco and Generico, together, the “Generico Parties”), Abraxis BioScience, LLC, a Delaware limited liability company (“New Alpha, LLC”), and New Abraxis, Inc., a Delaware corporation (to be renamed Abraxis BioScience, Inc.) (“New Alpha”) (New Alpha, LLC and New Alpha, together, the “Alpha Parties”).

R E C I T A L S:

WHEREAS, on the date hereof, pursuant to an Agreement and Plan of Merger, dated as of that date (the “Holding Company Merger Agreement”), Abraxis BioScience, Inc., a Delaware corporation (“Alpha”) will merge (the “Alpha Merger”) with and into New Alpha, LLC, and pursuant to the Alpha Merger, each issued and outstanding share of common stock, $0.001 par value per share, of Alpha (other than shares held by Alpha in treasury) will be converted into one share of common stock, par value $0.001 per share, of Gholdco (the “Gholdco Common Stock”), with New Alpha, LLC being the surviving entity in the Alpha Merger and all of its membership interests being held by Gholdco;

WHEREAS, the following transactions will occur effective as of the date hereof after the consummation of the Alpha Merger and prior to the Distribution Time (as defined below);

(a) the contribution by New Alpha, LLC and the Alpha Subsidiaries to Generico of all of the Generico Assets (as defined below), and the assumption by Generico of all of the Generico Liabilities (as defined below), upon and subject to the terms and conditions set forth in this Agreement (collectively, the “Generico Contribution”);

(b) immediately after the Generico Contribution, the distribution by New Alpha, LLC of all of the outstanding membership interests of Generico to Gholdco (the “Generico Distribution”);

(c) immediately after the Generico Distribution, the contribution (the “Alpha Contribution”) by Gholdco of all of the membership interests of New Alpha, LLC to New Alpha;

(d) simultaneously with the Alpha Contribution, the incurrence by Generico of an aggregate of $1 billion (the amount borrowed, “Borrowing Amount”) of Debt Financing (as defined below);

(e) immediately after the consummation of the Debt Financing, the distribution by Generico to Gholdco of an amount of cash up to the Borrowing Amount (the “Generico Cash Distribution”) immediately followed by the contribution by Gholdco to New Alpha of cash in an aggregate amount of $975,722,781.93 (the “Cash Contribution”), a portion of which will be used to repay all outstanding amounts under the Existing Credit Agreement;

WHEREAS, immediately after the Cash Contribution, Gholdco will distribute (the “Share Distribution”) all of the issued and outstanding shares of common stock of New Alpha (“New Alpha Common Stock”) on a pro rata basis to the holders of record of Gholdco Common Stock upon the terms and subject to the conditions set forth in this Agreement (the transactions described above in the two prior WHEREAS clauses, together with the Share Distribution and the other transactions contemplated hereby, the “Transactions”);

WHEREAS, for United States federal income tax purposes, it was intended that the Alpha Merger qualify as a reorganization under Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended (the “Code”), in which each of Alpha, New Alpha, LLC, Gholdco and their respective Affiliates recognize no income or gain, and it is intended that the Alpha Contribution, the Cash Contribution and the Share Distribution shall each have Tax-Free Status (as defined below); and

WHEREAS, Alpha received a private letter ruling from the Internal Revenue Service to the effect (a) that the Alpha Merger qualifies as a reorganization under Section 368(a)(1)(F) of the Code in which each of Alpha, New Alpha, LLC, Gholdco and their respective Affiliates recognize no income or gain, and (b) that (i) the Alpha Contribution, the Cash Contribution and the Share Distribution qualify as a tax-free reorganization described in Section 368(a)(1)(D) of the Code and (ii) subject to the requirements under Section 355 of the Code on which the Internal Revenue Service will not rule as provided in Revenue Procedure 2003-48, 2003-2 C.B. 86, that the Share Distribution is a transaction that will qualify for nonrecognition treatment under Sections 355(a) and 361(c) of the Code, in which (A) each of Gholdco, New Alpha, LLC, New Alpha, and their respective Affiliates recognize no income or gain, and (B) no income or gain is recognized by (and no amount is included in the income of) the holders of Gholdco common stock upon the receipt of shares of common stock of New Alpha pursuant to the Share Distribution (the “Private Letter Ruling”).

NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth in this Agreement, the parties hereto agree as follows:

ARTICLE I.

DEFINITIONS

Section 1.01. Definitions.

(a) As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined).

“Accounts Payable” means all accounts payable, and all Liabilities thereunder (but excluding any item constituting Indebtedness).

“Accounts Receivable” means accounts, loans and notes receivable and all proceeds thereof and rights to payment thereto.

2

“Affiliate” means, as to any Person, any other Person which, directly or indirectly, controls, or is controlled by, or is under common control with, such Person; provided, however, that for purposes of the Transaction Agreements, following the Distribution Time, no member of either Group shall be deemed to be an Affiliate of any member of the other Group. As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.

“Agreement” has the meaning set forth in the preamble to this Agreement.

“Alpha” has the meaning set forth in the recitals to this Agreement.

“Alpha Assets” has the meaning set forth in Section 3.01(d).

“Alpha Business” means (i) the business and operations of the Abraxis Oncology and Abraxis Research divisions of New Alpha, LLC which develop, manufacture and market proprietary pharmaceutical products, including Abraxane^® and the other Alpha Products, and currently comprise the ABI reporting segment of Alpha, (ii) all other businesses of Alpha and its Subsidiaries not otherwise included in the Generico Business, and (iii) the provision of the Alpha Shared Services.

“Alpha Contribution” has the meaning set forth in the recitals to this Agreement.

“Alpha Financial Instruments” means all Indebtedness (other than the Generico Financial Instruments and the performance bonds and letters of credit set forth in Schedule 3.01(e)(ii)) under which any member of the Alpha Group or the Generico Group has any primary, secondary, contingent, joint, several or other Liability as of the Distribution Time.

“Alpha Group” means New Alpha, New Alpha, LLC and the Alpha Subsidiaries.

“Alpha Indemnified Parties” means each member of the Alpha Group and each of their respective Representatives and each of the heirs, executors, successors and assigns of any of the foregoing.

“Alpha IP” has the meaning set forth in Section 3.01(d)(x).

“Alpha Liabilities” means (a) all Liabilities of any member of the Alpha Group under, or for which any member of the Alpha Group is expressly made responsible pursuant to, any Transaction Agreement to which it is or becomes a party, including the breach by any member of the Alpha Group of any agreement or covenant contained therein, subject to the terms, conditions and limitations in such Transaction Agreement; (b) all Liabilities of any member of the Alpha Group or the Generico Group to the extent based upon, arising out of or resulting from the Alpha Business, regardless of whether such Liability existed prior to, at or after the Distribution Time; (c) all Liabilities of any member of the Alpha Group or the Generico Group with respect to Indebtedness, but excluding the Indebtedness incurred pursuant to the Debt Financing; and (d) all Excluded Liabilities.

“Alpha Merger” has the meaning set forth in the recitals to this Agreement.

“Alpha Parties” has the meaning set forth in the preamble to this Agreement.

3

“Alpha Products” means all of the existing and pending products and products under development by or on behalf of New Alpha, LLC or any of their Subsidiaries and all related products within the same product family, other than the Generico Products.

“Alpha Sell-off Period” has the meaning set forth in Section 5.02(d).

“Alpha Shared Services” means those services or facilities that the Alpha Group will provide or lease to the Generico Group pursuant to the Transaction Agreements.

“Alpha Subsidiaries” means each direct and indirect Subsidiary of New Alpha, LLC and/or New Alpha other than members of the Generico Group.

“Alpha Trademarks” has the meaning set forth in Section 5.02(c).

“Applicable Law” means all applicable laws, statutes, ordinances, orders, decrees, rules, regulations, policies or guidelines promulgated, or judgments, decisions, orders or arbitration awards entered, by any Governmental Entity.

“Assets” means any and all assets, properties and rights, whether tangible or intangible, real, personal or mixed, fixed, contingent or otherwise, and wherever located, including Accounts Receivable; Cash; Data and Records; rights under Contracts; Inventories; Machinery and Equipment; Governmental Authorizations; Intellectual Property; Product Application Information; Product Applications; Product Approval Information; Product Approvals; Promotional Materials; Real Property; rights under Real Property Leases; Securities; bank and brokerage accounts; credits, prepayments and prepaid expenses; claims and causes of action; goodwill and going concern value; and other intangible assets.

“Bensenville Facility” means the distribution and warehousing facility located at 600 Supreme Drive, Bensenville, Illinois, 60160.

“Board of Directors” means the board of directors or similar governing body of any specified Person.

“Borrowing Amount” has the meaning set forth in the recitals to this Agreement.

“Business Day” means any day on which banks are not required or authorized to close in the City of New York.

“Cash” means cash, cash equivalents, funds, certificates of deposit and similar instruments on hand and in all accounts of the applicable Person with any financial institution (it being understood that Cash shall not include (i) deposits with customers or landlords or other similar prepayment or security arrangements and (ii) checks that have been issued by New Alpha or New Alpha, LLC (including Alpha, its predecessor) or any of their Subsidiaries to third parties but not yet cashed but shall include checks that have been received by New Alpha, New Alpha, LLC (including Alpha, its predecessor) or any of their Subsidiaries from a third-party but not yet cleared).

“Cash Contribution” has the meaning set forth in the recitals to this Agreement.

“Claim Notice” has the meaning set forth in Section 4.04.

4

“Claims Administration” means the processing of claims made under Policies, including the reporting of claims to the insurance carrier, management and defense of claims, and providing for appropriate releases upon settlement of claims.

“Claims Made Policies” has the meaning set forth in Section 5.01(b).

“Code” means the Internal Revenue Code of 1986, as amended, or any successor legislation.

“Consents” means any consents, waivers or approvals from, or notification requirements to, any third parties.

“Contracts” means any material loan or credit agreement, note, instrument, mortgage, bond, indenture real estate or other lease or sublease, benefit plan, license, sublicense, memorandum of understanding, sales order, purchase order, open bid or other contract, agreement or obligation, in each case, including all amendments, modifications and supplements thereto and waivers and consents thereunder.

“Contributed Contracts” has the meaning set forth in Section 3.01(c)(iv).

“Contributed IP” has the meaning set forth in Section 3.01(c)(vi).

“Contributed Licenses” has the meaning set forth in Section 3.01(c)(viii).

“Contributed Machinery and Equipment” has the meaning set forth in Section 3.01(c)(ix).

“Contributed Real Property” has the meaning set forth in Section 3.01(c)(xvi).

“Contributed Real Property Leases” has the meaning set forth in Section 3.01(c)(xvii).

“Conveyance and Assumption Instrument” has the meaning set forth in Section 3.01(h).

“Cornell Facility” means Alpha’s research and development and warehouse facility located at 2045 N. Cornell Avenue, Melrose Park, Illinois 60160.

“Credit Agreement” means the Credit Agreement, dated as of November 13, 2007, by and among Generico, Abraxis Bioscience Manufacturing LLC, Gholdco, and Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., Wachovia Capital Markets, LLC, and the other banks party thereto.

“Cruce Davila Property” means the real property located in the Commonwealth of Puerto Rico and acquired by Abraxis BioScience Manufacturing, LLC pursuant to that certain Purchase and Sale Agreement, dated April 24, 2006, between Abraxis BioScience Manufacturing, Inc. and Pfizer.

“Data and Records” means all financial, accounting, corporate, operating and other data and records, customer and vendor lists, cost and pricing information, all books, records, files and documents relating to customers and vendors, customer complaints, product recalls, customer and vendor claims or litigation, sales orders, credit information, payroll and personnel matters and other similar books, records, files and documents, in each case, in whichever form or medium, including electronic media.

5

“Debt Financing” means the financing on the terms of the Credit Agreement and the other Contracts entered into by members of the Generico Group in connection with the Credit Agreement.

“Distribution Agent” the Person selected by Alpha to act as distribution agent in connection with the Transactions.

“Distribution Agent Agreement” has the meaning set forth in Section 3.03.

“Distribution Date” means the date hereof.

“Distribution Shares” means the aggregate number of shares of New Alpha Common Stock constituting the Share Distribution.

“Distribution Time” means the time on the Distribution Date at which the Share Distribution is effective.

“Employee Matters Agreement” means the Employee Matters Agreement, to be dated as of the date hereof, by and among New Alpha, LLC, New Alpha, Generico and Gholdco, as it may be amended from time to time.

“Environmental Liabilities” means all Liabilities relating to, arising out of or resulting from any environmental law or contract or agreement relating to environmental, health or safety matters (including all removal, remediation or cleanup costs, investigatory costs, governmental response costs, natural resources damages, property damages, personal injury damages, costs of compliance with any product take back requirements or with any settlement, judgment or other determination of Liability and indemnity, contribution or similar obligations) and all costs and expenses, interest, fines, penalties or other monetary sanctions in connection therewith.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Liabilities” has the meaning set forth in Section 3.01(f).

“Existing Credit Agreement” means the Credit Agreement, dated as of April 18, 2006, by and among Alpha, the various lenders from time to time party thereto, First Third Bank, as Agent and L/C Issuer, Wachovia Bank, National Association, as Documentation Agent, and Harris Nesbitt Inc.

“Facility Lease Agreements” means the (a) Lease, to be dated as of the date hereof, between New Alpha, LLC and Generico providing for the lease of the manufacturing facility located at 2020 Ruby Street, Melrose Park, Illinois by New Alpha, LLC to Generico, (b) the Lease, to be dated as of the date hereof, between New Alpha, LLC and Generico providing for the lease of a portion of the manufacturing facility located at 3159 Staley Road, Grand Island, New York by Generico to New Alpha, LLC, (c) the Lease, to be dated as of the date hereof, between New Alpha, LLC and Generico providing for the lease of a portion of the research and development facility located at 2045 N. Cornell Avenue, Melrose Park, Illinois from New Alpha, LLC to Generico and (d) the Lease, to be dated as of the date hereof, between New Alpha, LLC and Generico providing for the lease of a portion of the warehouse facility located at 2045 N. Cornell Avenue, Melrose Park, Illinois from New Alpha, LLC to Generico, in each case as amended from time to time.

6

“FDA” means the United States Food and Drug Administration.

“Generico” has the meaning set forth in the preamble to this Agreement.

“Generico Assets” has the meaning set forth in Section 3.01(c).

“Generico Business” means the Abraxis Pharmaceutical Products business consisting of the development, manufacture, sale and marketing of the Generico Products and any other generic pharmaceutical products comprising the APP reporting segment of Alpha, including the provision of the Generico Shared Services.

“Generico Cash Distribution” has the meaning set forth in the recitals to this Agreement.

“Generico Contribution” has the meaning set forth in the recitals to this Agreement.

“Generico Distribution” has the meaning set forth in the recitals to this Agreement.

“Generico Financial Instruments” means the Credit Agreement and the other Contracts entered into by members of the Generico Group in connection with the Credit Agreement.

“Generico Group” means Gholdco, Generico and each Generico Subsidiary and, after the Distribution Time, each other direct and indirect Subsidiary of Gholdco or Generico.

“Generico Indemnified Parties” means each member of the Generico Group and each of their respective Representatives and each of the heirs, executors, successors and assigns of any of the foregoing.

“Generico Liabilities” has the meaning set forth in Section 3.01(e).

“Generico Parties” has the meaning set forth in the preamble to this Agreement.

“Generico Products” means all of the existing and pending products and products under development identified on Schedule 3.01(c)(xi) and 3.01(c)(xii) and all related products within the same product family, including any variations of such products in formulation, dosage, delivery system, or the like (but, for the avoidance of doubt, in no event will the Generico Products include any product incorporating “nab” technology).

“Generico Sell-off Period” has the meaning set forth in Section 5.02(c).

“Generico Shared Services” means those services or facilities that the Generico Group will provide or lease to the Alpha Group pursuant to the Transaction Agreements.

“Generico Subsidiary” means each of the following Persons: Abraxis BioScience, Inc. (formerly Pharmaceutical Partners of Canada, Inc.), a Canadian corporation, and Abraxis BioScience Manufacturing, LLC, a Puerto Rican limited liability company.

“Generico Trademarks” has the meaning set forth in Section 5.02(d).

“Gholdco” has the meaning set forth in the preamble to this Agreement.

7

“Gholdco Common Stock” has the meaning set forth in the recitals to this Agreement.

“Gholdco Record Date” means 5:00 p.m. ET on the date hereof.

“Governmental Authorizations” means all licenses, permits, certificates and other authorizations and approvals under the Applicable Laws of any Governmental Entity.

“Governmental Entity” means any supranational, national, federal, state, municipal, local or foreign government, any instrumentality, subdivision, court, administrative agency, board, commission or other authority thereof, any arbitral tribunal, or any quasi-governmental or private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority.

“Grand Island Facilities” means the manufacturing facility located at 3159 Staley Road, Grand Island, New York and the warehouse and administrative facilities located at 300 Lang Boulevard, Grand Island, New York.

“Group” means the Generico Group or the Alpha Group, as applicable.

“Indebtedness” means, without duplication, (i) Liabilities for borrowed money from third parties, (ii) Liabilities under any note, bond or other debt security or instrument, (iii) Liabilities under capitalized leases, (iv) Liabilities in respect of letters of credit, surety bonds or similar instruments, (v) Liabilities arising out of interest rate protection, swap, collar or other similar hedging Contracts or arrangements, (vi) Liabilities for the deferred purchase price of property or services (other than Accounts Payable), (vii) Liabilities of the type referred to above for which a Person is responsible or liable, as obligor, guarantor, surety or otherwise and (viii) in each case, with any accrued and unpaid interest thereon, and any penalties, fees, expenses and premiums incurred in connection therewith.

“Indemnifiable Losses” means any and all losses, Liabilities, claims, damages, deficiencies, obligations, fines, payments, Taxes, Liens, costs and expenses, in each case, matured or unmatured, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, known or unknown, whenever arising and whether or not resulting from Third Party Claims (including the costs and expenses of any and all Proceedings; all amounts paid in connection with any demands, assessments, judgments, settlements and compromises relating thereto; interest and penalties with respect thereto; reasonable out-of-pocket expenses and reasonable attorneys’, accountants’ and other experts’ fees and expenses reasonably incurred in investigating, preparing for or defending against any such Proceedings or in asserting, preserving or enforcing an Indemnified Party’s rights hereunder; and any losses that may result from the granting of injunctive relief as a result of any such Proceedings).

“Indemnified Party” has the meaning set forth in Section 4.04.

“Indemnitor” has the meaning set forth in Section 4.04.

“Information” means all records, books, contracts, instruments, computer data and other data and information (in each case, in whichever form or medium, including electronic media).

“Information Statement” means the information statement sent to Alpha’s stockholders in connection with the Share Distribution, and any amendments or supplements thereto.

8

“Injunction” means any temporary restraining order, preliminary or permanent injunction or other order issued by a court or other Governmental Entity of competent jurisdiction.

“Intellectual Property” means each of the following in any jurisdiction throughout the world, (a) Patents, patent applications and patent and invention disclosures, together with all issuances, continuations, continuations-in-part, divisions, revisions, supplementary protection certificates, extensions and re-examinations thereof, and any other U.S. or foreign patent rights entitled to the same priority claim (in whole or in part) as any of the foregoing, (b) trademarks, service marks, trade names, trade dress, logos, Internet names, hypertext markup language files and related graphic and text files associated with websites, business and product names and slogans and all registrations to and applications for registration of any of the foregoing; (c) copyrights and all applications, registrations, and renewals in connection with the foregoing; (d) Trade Secrets; and (e) computer software (including but not limited to source code, executable code, data, databases, and documentation).

“Inventories” means inventories, including raw materials, work-in process, materials, components, finished goods, parts, accessories and supplies, and any claims or benefits in, to, or under any express or implied warranties from suppliers of goods or services relating thereto.

“Liabilities” means any and all claims, debts, liabilities, guarantees, commitments and obligations of whatever nature, in each case, whether fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown, due or to become due, whenever or however arising and regardless of when or by whom asserted (including those arising out of any Contract or tort, whether based on negligence, strict liability or otherwise) and whether or not the same would be required by generally accepted accounting principles to be reflected as a liability in financial statements or disclosed in the notes thereto, including all costs and expenses relating thereto.

“Licenses” means licenses, sublicenses, agreements, or permissions related to Intellectual Property.

“Liens” means any obligation or the loss of a benefit under, or the creation of any material pledges, claims, liens, charges, encumbrances and security interests of any kind or nature whatsoever.

“Machinery and Equipment” means machinery, equipment, tooling, vehicles (including automobiles and trucks), furniture and fixtures (other than Real Property fixtures), leasehold improvements, repair parts, change parts, tools, plants, laboratory and office equipment and supplies, computer hardware and software.

“Manufacturing Agreement” means the Manufacturing Agreement, to be dated as of the date hereof, to be entered into between New Alpha and APP Pharmaceuticals, LLC, as it may be amended from time to time.

“Melrose Park Facility” means the manufacturing facility located at 2020 Ruby Street, Melrose Park, Illinois, 60160.

“Nasdaq” means the Nasdaq Global Market of The Nasdaq Stock Market, Inc.

“New Alpha” has the meaning set forth in the preamble to this Agreement.

9

“New Alpha Common Stock” has the meaning set forth in the recitals to this Agreement.

“New Alpha, LLC” has the meaning set forth in the preamble to this Agreement.

“Occurrence Basis Policies” has the meaning set forth in Section 5.01(b).

“Patents” means patents, patent applications and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions and re-examinations thereof.

“Person” means an individual, corporation, limited liability company, partnership, association, joint venture, trust, unincorporated organization, other entity or group (as defined in the Exchange Act), including any Governmental Entity.

“Pfizer” means Pfizer Pharmaceuticals, LLC.

“Pfizer Lease” means the lease agreement, dated February 14, 2007, between Abraxis BioScience Manufacturing, LLC and Pfizer.

“Policies” means all insurance policies, insurance contracts and claim administration contracts of any kind of any member of the Alpha Group and their predecessors which were or are in effect at any time at or prior to the Distribution Time (other than insurance policies, insurance contracts and claim administration contracts established in contemplation of the Share Distribution to cover only the members of the Generico Group after the Distribution Time), including primary, excess and umbrella, commercial general liability, fiduciary liability, product liability, automobile, aircraft, property and casualty, business interruption, directors and officers liability, employment practices liability, workers’ compensation, crime, errors and omissions, special accident, cargo and employee dishonesty insurance policies, together with all rights, benefits and privileges thereunder.

“Private Letter Ruling” has the meaning set forth in the recitals to this Agreement.

“Privileged Information” means, with respect to either Group, Information regarding a member of such Group, or any of its operations, employees, assets or Liabilities (whether in documents or stored in any other form or known to its employees or agents) that is or may be reasonably protected from disclosure pursuant to the attorney-client privilege, the work product doctrine or other applicable privilege or that a Group is required to keep confidential pursuant to the terms of a Contract with a third Person.

“Proceeding” means any suit, litigation, action, arbitration, proceeding, claim, charge, investigation or other proceeding.

“Product Application Information” means copies of the Product Applications, together with copies of correspondence with the FDA or other applicable Governmental Entity and any other existing files and dossiers, in each case relating to the Product Applications and/or to the underlying data or Information used to support such application.

“Product Applications” means each new drug application, abbreviated new drug application or investigational new drug application or other application or other filings seeking to allow for the manufacturing, distribution, sale, marketing or investigation of a pharmaceutical product (or similar applications or filings in jurisdictions outside the United States) that has been filed with, or submitted to, the FDA (or similar Governmental Entity outside the United States), in each case as amended, and has not been approved or authorized by the FDA (or similar Governmental Entity outside the United States).

10

“Product Approval Information” means copies of the Product Approvals, together with copies of correspondence regarding the applicable pharmaceutical product with the applicable Governmental Entity, current approved packaging and any other existing files and dossiers, in each case relating to the Product Approvals and/or to the underlying data or Information used to support, maintain or obtain manufacturing, distribution or marketing authorization of the applicable product.

“Product Approvals” means all approvals, registrations or authorizations of the FDA or other similar Governmental Entities outside the United States for the manufacturing, distribution, sale, marketing or investigation of pharmaceutical products.

“Product Liability” means all Liabilities arising out of any Third Party Claim relating to product liability, product defect, product warranty (express or implied), negligence, strict liability, failure to warn or any Third Party Claim seeking damages or other remedy as a result of the manufacturing, packaging, labeling, sale, marketing or distribution of products and all Liabilities relating to or arising out of any Third Party Claim relating to the return or recall of products.

“Promotional Materials” means the advertising, promotional, educational and media materials and sales training materials (including distribution and sales promotion Information, market research studies and toll-free telephone numbers).

“PSS” means Dr. Patrick Soon-Shiong.

“PSS Entity” means any of PSS, any members of his immediate family, any trust for the benefit of PSS and/or members of his immediate family and any other entity in which PSS or any members of his immediate family separately or collectively hold (directly or indirectly) a majority of the outstanding equity interests or of which they constitute a majority of the trustees or over which they otherwise exercise control. For purposes of the definition of PSS Entities, PSS’s immediate family shall be deemed to consist of his Family Members (as defined in Rule 4200(a)(14) of the Nasdaq’s Marketplace Rules as in effect as of the date of this Agreement).

“Real Property” means real property (including buildings, structures, real property fixtures and improvements situated thereon) and all easements and rights of way, covenants and appurtenances pertaining to accrue to the benefit of such real property).

“Real Property Leases” means any Contract for the occupancy or use of Real Property.

“reasonable best efforts” means commercially reasonable best efforts, but shall not include any alteration of business activities in any material respect, any payment of consideration, or any making of financial accommodation.

“Registration Statement” means the registration statement on Form 10 initially filed by New Alpha with the SEC on August 9, 2007, as amended or supplemented.

11

“Related Party Agreements” means any Contract between any member of the Alpha Group or any PSS Entity, or any equityholder, director, or officer thereof, on the one hand, and any member of the Generico Group, on the other hand, other than the Transaction Agreements and the Holding Company Merger Agreement, and any Contract expressly contemplated thereby to be entered into by any member of the Generico Group, on the one hand, and any member of the Alpha Group, on the other hand.

“Representative” means, with respect to any Person, its officers, directors, employees, consultants, agents, advisors and other representatives.

“Schaumburg Facility” means the administrative offices located at 1501 E. Woodfield Road, Suites 300E, 300S, 310S and 210E, Schaumburg, Illinois 60173.

“SEC” means the Securities and Exchange Commission.

“Securities” means all short-term and long-term investments, bankers acceptances, shares of stock and other equity securities, notes, bonds, debentures, evidence of indebtedness, certificate of interest or participation in any limited liability company or partnership, collateral-trust certificates, puts, calls, straddles, options, investment contracts, voting trust and certificates and other securities of any kind.

“Share Distribution” has the meaning set forth in the recitals to this Agreement.

“Shared Policies” means all Policies that include any member of the Generico Group and/or any or all of the Generico Business within the definition of the named insured or the scope of coverage.

“Subsidiary” means, when used with respect to any Person, any corporation or other organization, whether incorporated or unincorporated, at least a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority of the Board of Directors or other body performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries.

“Tax” and “Taxes” (and, with correlative meaning, “Taxes” and “Taxable”) means any tax, including (i) any federal, state, municipal, county, local, foreign or other Governmental Entity net income, gross income, receipts, windfall profit, severance, real, personal, tangible, escheatable, unclaimed or abandoned property, goods and services, value added, estimated, capital stock, production, sales, use, license, excise, franchise, employment, unemployment, social security, payroll, withholding, alternative or add-on minimum, ad valorem, transfer, stamp, or environmental tax, or any other tax, customs, duty or other like assessment or charge of any kind whatsoever, together with any interest or penalty, addition to tax or additional amount imposed by any Governmental Entity, including any fines, penalties or interest arising under ERISA; and (ii) any liability for payments of a type described in clause (i) as a result of being or having been a member of an affiliated, consolidated, combined, unitary or similar group, or under a tax sharing, tax allocation, tax indemnity or other agreement, or as a result of being liable for another Person’s taxes as a transferee or successor, by contract or otherwise.

“Tax Allocation Agreement” means the Tax Allocation Agreement, to be dated as of the date hereof, by and among New Alpha, LLC, New Alpha, Generico and Gholdco in connection with the Share Distribution, as it may be amended from time to time.

12

“Tax-Free Status” means the qualification of (i) the Alpha Contribution, the Cash Contribution and the Share Distribution as a tax-free reorganization described in Section 368(a)(1)(D) of the Code and (ii) the Share Distribution as a transaction qualifying for nonrecognition treatment under Sections 355(a) and 361(c) of the Code, in which (A) each of Gholdco, New Alpha, LLC, New Alpha, and their respective Affiliates recognize no income or gain, and (B) no income or gain is recognized by (and no amount is included in the income of) the holders of Gholdco Common Stock upon the receipt of shares of common stock of New Alpha pursuant to the Share Distribution.

“Third Party Claim” has the meaning set forth in Section 4.06(a).

“Trade Secrets” means trade secrets and confidential technical information, including ideas, research and development, know-how, formulas, technology, compositions, analytical methodologies, manufacturing and production equipment and processes, techniques and all copies and tangible embodiments of the foregoing.

“Transaction Agreements” means collectively, this Agreement, the Employee Matters Agreement, the Tax Allocation Agreement, the Transition Services Agreement, the Manufacturing Agreement, Facility Lease Agreements, the Warehouse Services Agreement and the other agreements, if any, entered into or to be entered into in connection with the Transactions.

“Transaction Payables” means all expenses to be paid by the Generico Parties and the Alpha Parties pursuant to Section 8.05 and Section 3.01(j)(vi) of this Agreement.

“Transition Services Agreement” means the Transition Services Agreement, dated as of the date hereof, by and between New Alpha, LLC and Generico, as it may be amended from time to time.

“Warehouse Services Agreement” means the Warehouse Services Agreement, to be dated as of the date hereof, between New Alpha, LLC and Generico, as it may be amended from time to time.

ARTICLE II.

PRE-DISTRIBUTION TRANSACTIONS

Section 2.01. Transactions.

The transactions set forth in this Section 2.01 shall take place on the date hereof after the Alpha Merger and prior to the Distribution Time in the order set forth below:

(a) Generico Contribution. Upon the terms and subject to the conditions set forth in this Agreement, pursuant to ARTICLE II, New Alpha, LLC is, and is causing the Alpha Subsidiaries to, contribute, assign, transfer, convey and deliver to Generico all of New Alpha, LLC’s and the Alpha Subsidiaries’ rights, title and interest in and to all of the Generico Assets, and Generico is accepting, assuming and agreeing faithfully to perform, discharge and fulfill, all of the Generico Liabilities.

13

(b) The Generico Distribution. Upon the terms and subject to the conditions set forth in this Agreement, immediately following the effectiveness of the Generico Contribution, New Alpha, LLC will distribute all of the outstanding membership interests in Generico to Gholdco. Following the Generico Distribution, all of the outstanding membership interests in Generico will be wholly-owned by Gholdco.

(c) The Alpha Contribution. Upon the terms and subject to the conditions set forth in this Agreement, immediately following the Generico Distribution, Gholdco shall contribute all of the membership interests in New Alpha, LLC to New Alpha. Following the Alpha Contribution, all of the outstanding membership interests in New Alpha, LLC will be wholly-owned by New Alpha.

(d) The Debt Financing. Simultaneously with the Alpha Contribution, Generico shall consummate, and borrow the Borrowing Amount pursuant to, the Debt Financing.

(e) Generico Cash Distribution; Cash Contribution. Immediately after the consummation of the Debt Financing, Generico shall make the Generico Cash Distribution to Gholdco by wire transfer of immediately available funds to an account designated by Gholdco and immediately thereafter Gholdco shall make the Cash Contribution to New Alpha by wire transfer of immediately available funds to an account designated by New Alpha. New Alpha shall immediately contribute to New Alpha, LLC sufficient funds to repay in full the Existing Credit Agreement.

Section 2.02. Effect on Capital Stock.

The Generico Parties and the Alpha Parties shall take all action necessary to cause, immediately prior to the Distribution Time, (a) the number of authorized shares of New Alpha Common Stock to equal or exceed the number of shares of Gholdco Common Stock issued (including treasury shares held by Gholdco) as of the Gholdco Record Date and (b) the number of shares of New Alpha Common Stock outstanding to be increased to equal 25 percent of the number of shares of Gholdco Common Stock issued (including treasury shares held by Gholdco) as of the Gholdco Record Date.

Section 2.03. Documents to Be Delivered By New Alpha and Generico.

Unless otherwise provided herein, at or prior to the Distribution Time, New Alpha will execute and deliver (and, where applicable, cause a member of the Alpha Group to execute and deliver) to Gholdco (and/or to the appropriate member of the Generico Group), and Gholdco will execute and deliver (and, where applicable, cause a member of the Generico Group to execute and deliver) to New Alpha (and/or to the appropriate member of the Alpha Group), all of the Transaction Agreements.

Section 2.04. Financial Instruments.

(a) The Alpha Parties will use their reasonable best efforts to take or cause to be taken all actions, and enter into (or cause their Subsidiaries to enter into) such agreements and arrangements, as shall be necessary to cause, as of the Distribution Time, (i) the removal of members of the Generico Group from all Alpha Financial Instruments and (ii) the members of the Generico Group to be fully and unconditionally released from all Liabilities in respect of the Alpha Financial Instruments. It is understood and agreed that

14

all Liabilities in respect of the Alpha Financial Instruments are Alpha Liabilities and the Alpha Parties shall indemnify the members of the Generico Group from any Liabilities suffered thereby arising out of, resulting from or relating to the Alpha Financial Instruments. Without limiting the foregoing, after the Distribution Time, the Alpha Parties will not, and will not permit any member of the Alpha Group to, renew, extend, modify, amend or supplement any Alpha Financial Instrument in any manner that would increase, extend or give rise to any Liability of a member of the Generico Group under such Alpha Financial Instrument.

(b) The Generico Parties will use their reasonable best efforts to take or cause to be taken all actions, and enter into (or cause their Subsidiaries to enter into) such agreements and arrangements, as shall be necessary to cause, as of the Distribution Time, (i) the removal of members of the Alpha Group from all Generico Financial Instruments and (ii) the members of the Alpha Group to be fully and unconditionally released from all Liabilities in respect of the Generico Financial Instruments. It is understood and agreed that all Liabilities in respect of the Generico Financial Instruments are Generico Liabilities and the Generico Parties shall indemnify the members of the Alpha Group from any Liabilities suffered thereby arising out of, resulting from or relating to the Generico Financial Instruments. Without limiting the foregoing, after the Distribution Time, the Generico Parties will not, and will not permit any member of the Generico Group to, renew, extend, modify, amend or supplement any Generico Financial Instrument in any manner that would increase, extend or give rise to any Liability of a member of the Alpha Group under such Generico Financial Instrument.

(c) The parties’ obligations under this Section 2.04 will continue to be applicable to all Alpha Financial Instruments and Generico Financial Instruments identified at any time by the Generico Parties or the Alpha Parties, whether before, at or after the Distribution Time.

Section 2.05. Related Party Agreements; Intercompany Accounts.

(a) Effective immediately prior to the Distribution Time, all Related Party Agreements shall automatically terminate.

(b) Effective immediately prior to the Distribution Time, all intercompany receivables, payables and loans (other than any amounts owed under the other Transaction Agreements and the Holding Company Merger Agreement) between the members of the Generico Group, on the one hand, and the members of the Alpha Group, on the other hand, shall automatically be cancelled. All Transaction Payables shall be paid as provided in this Agreement.

Section 2.06. Other Transaction Agreements.

Subject to the terms and conditions of this Agreement, at or prior to the Distribution Time, each of the Generico Parties and the Alpha Parties shall execute and deliver the Transaction Agreements not previously executed and delivered.

15

ARTICLE III.

THE GENERICO CONTRIBUTION; THE SHARE DISTRIBUTION

Section 3.01. Transfer of Generico Assets and Alpha Assets and Assumption of Generico Liabilities and Alpha Liabilities.

(a) (i) On the terms and subject to the conditions set forth in this Agreement, as of the date hereof and, with effect immediately after the Alpha Merger and prior to the Generico Distribution, New Alpha, LLC hereby contributes, assigns, transfers, conveys and delivers, and shall cause the Alpha Subsidiaries to contribute, assign, transfer, convey and deliver to Generico, all of New Alpha, LLC’s and the Alpha Subsidiaries’ rights, title and interest in and to all of the Generico Assets free and clear of all Liens for borrowed money, and Generico hereby accepts from New Alpha, LLC and its Subsidiaries all of New Alpha, LLC’s and its Subsidiaries’ respective rights, title and interest in and to all Generico Assets.

(ii) On the terms and subject to the conditions set forth in this Agreement, with effect as of the date hereof the Generico Parties shall, and shall cause the Generico Subsidiaries to contribute, assign, transfer, convey and deliver to New Alpha, LLC (or one or more Subsidiaries of New Alpha, LLC as it may designate) all of the Generico Parties’ and the Generico Subsidiaries’ rights, title and interest in and to any of the Alpha Assets in which they have any right, title or interest, free and clear of all Liens for borrowed money.

(b) (i) On the terms and subject to the conditions set forth in this Agreement and with effect concurrently with the contribution, assignment, transfer, conveyance and delivery pursuant to Section 3.01(a), Generico hereby accepts, assumes and agrees faithfully to perform, discharge and fulfill all the Generico Liabilities in accordance with their respective terms. Generico shall be responsible for all Generico Liabilities, regardless of when or where such Liabilities arose or arise, or whether the facts on which they are based occurred prior to or subsequent to the date hereof, regardless of where or against whom such Liabilities are asserted or determined or whether asserted or determined prior to the date hereof, and regardless of whether arising from or alleged to arise from negligence, recklessness, violation of law, or misrepresentation by any member of the Alpha Group or the Generico Group or any of their respective directors, officers, employees, agents, Subsidiaries or Affiliates.

(ii) On the terms and subject to the conditions set forth in this Agreement, New Alpha, LLC and its Subsidiaries shall retain and faithfully perform, discharge and fulfill all the Alpha Liabilities in accordance with their respective terms. New Alpha, LLC shall be responsible for all Alpha Liabilities, regardless of when or where such Liabilities arose or arise, or whether the facts on which they are based occurred prior to or subsequent to the date hereof, regardless of where or against whom such Liabilities are asserted or determined or whether asserted or determined prior to the date hereof, and regardless of whether arising from or alleged to arise from negligence, recklessness, violation of law, or misrepresentation by any member of the Alpha Group or the Generico Group or any of their respective directors, officers, employees, agents, Subsidiaries or Affiliates.

(c) For purposes of this Agreement, “Generico Assets” shall mean the following (without duplication):

(i) the shares of capital stock and other equity interests in any Generico Subsidiary;

16

(ii) all Accounts Receivable of New Alpha, LLC or its Subsidiaries that arose from the sale of Generico Products or the conduct of the Generico Business;

(iii) all bank and brokerage accounts that are solely in the name of one or more members of the Generico Group or that are in the name of a member of the Alpha Group and were used by Alpha prior to the date hereof in the conduct of Alpha’s business;

(iv) all of the rights of New Alpha, LLC or its Subsidiaries under Contracts (other than Real Property Leases and Licenses) that are (x) with customers and suppliers relating to the Generico Products or (y) primarily used in, primarily related to, or primarily useful in the conduct of the Generico Business (collectively, the “Contributed Contracts”); provided, however, Contributed Contracts shall not include any Related Party Agreements;

(v) all Data and Records of New Alpha, LLC or its Subsidiaries primarily used in, primarily related to, or primarily useful in the conduct of the Generico Business; provided, however, that, notwithstanding anything herein to the contrary, New Alpha, LLC may retain an archival copy of any Data and Records to the extent necessary for tax, accounting, litigation or other similar business purpose;

(vi) all (x) Patents, invention disclosures or other registered Intellectual Property owned by New Alpha, LLC or its Subsidiaries that are embedded or inherent in any of the Generico Products or otherwise primarily used and primarily related to, or primarily useful in the conduct of the Generico Business and (y) other Intellectual Property that is primarily used in, primarily related to, or primarily useful in the conduct of the Generico Business (collectively, the “Contributed IP”);

(vii) all Inventories of New Alpha, LLC or its Subsidiaries of Generico Products (including Components (as defined in the Manufacturing Agreement) and excluding (x) Chemical Ingredients and (y) Materials (in each case as defined in the Manufacturing Agreement)) or that are used primarily in, primarily related to, or primarily useful in the conduct of the Generico Business;

(viii) all rights of New Alpha, LLC or its Subsidiaries under Licenses granting the right to use Intellectual Property embedded or inherent in any of the Generico Products, or that is primarily used, primarily held for use, or primarily useful, in the conduct of the Generico Business (the “Contributed Licenses”);

(ix) all Machinery and Equipment of New Alpha, LLC or its Subsidiaries (w) located at the Cruce Davila Property (other than such Machinery and Equipment which the lessor is entitled to receive under Article XIV of the Pfizer Lease and Machinery and Equipment to which New Alpha, LLC is entitled under Schedule 3.01(m)(vii)), the Bensenville Facility, and the Schaumburg Facility, (x) located at the Grand Island Facilities and Melrose Park Facilities (other than as set forth on Schedule 3.01(c)(ix)(x)), (y) located at the Cornell Facility and set forth on Schedule 3.01(c)(ix)(y) or (z) primarily used in, primarily related to, or primarily useful in, the conduct of the Generico Business (collectively, the “Contributed Machinery and Equipment”);

17

(x) all Promotional Materials of New Alpha, LLC or its Subsidiaries that are primarily used in, primarily related to, or primarily useful in, the conduct of the Generico Business;

(xi) the Product Applications for any Generico Products, including those listed on Schedule 3.01(c)(xi), and the related Product Application Information;

(xii) the Product Approvals for any Generico Products, including those listed on Schedule 3.01(c)(xii), and any Product Approvals obtained after the date of this Agreement as a result of the Product Applications referred to in Section 3.01(c)(xi), and the related Product Approval Information;

(xiii) all other Governmental Authorizations of New Alpha, LLC or its Subsidiaries (x) that relate to the facilities that constitute Contributed Real Property, (y) that relate to the Contributed Machinery and Equipment or (z) that are primarily used in, primarily related to, or primarily useful in, the conduct of the Generico Business;

(xiv) all credits, prepayments and prepaid expenses of New Alpha, LLC or its Subsidiaries to the extent relating to the Generico Products or that are primarily used in, primarily related to, or primarily useful in the conduct of the Generico Business;

(xv) all claims, and causes of action of New Alpha LLC or its Subsidiaries against third parties to the extent relating to the Generico Products, the Contributed Contracts, the Contributed IP, the Contributed Licenses, the Contributed Real Property Leases and other Generico Assets, or that are primarily used in, primarily related to, or primarily useful in the conduct of the Generico Business (excluding claims under Shared Policies which are the subject of ARTICLE V);

(xvi) the Real Property listed on Schedule 3.01(c)(xvi), including all tangible Assets located thereon (other than tangible assets located within those areas of such Real Property subleased to members of the Alpha Group) (the “Contributed Real Property”);

(xvii) the rights of New Alpha, LLC or its Subsidiaries under the Real Property Leases listed on Schedule 3.01(c)(xvii) (the “Contributed Real Property Leases”), including all tangible Assets located on the Real Property leased pursuant thereto;

(xviii) all goodwill arising out of going concern value of the Generico Business;

(xix) all Assets of New Alpha, LLC or its Subsidiaries to the extent specifically assigned to any member of the Generico Group pursuant to this Agreement or any other Transaction Agreement;

(xx) all Cash of the members of the Alpha Group and the Generico Group in excess of the Cash Contribution Amount;

(xxi) other Assets of New Alpha, LLC or its Subsidiaries primarily used in, primarily related to, or primarily useful to the conduct of the Generico Business.

18

(d) For the purposes of this Agreement, “Alpha Assets” shall mean (without duplication):

(i) the Assets listed or described on Schedule 3.01(d)(i);

(ii) any Product Applications or Product Approvals for any Alpha Product, including Abraxane^® and the Pipeline Products (as defined in the Manufacturing Agreement) and the related Product Approval Information;

(iii) a portion of the Cash of the members of the Alpha Group (or the Generico Group as of the date hereof) equal to the Cash Contribution Amount;

(iv) all Securities held by the members of the Alpha Group or the Generico Group as of the date hereof (other than as set forth in Section 3.01(c)(i));

(v) all Real Property or rights under Real Property Leases of the members of the Alpha Group (or the Generico Group as of the date hereof) (other than as expressly provided in Section 3.01(c)(xvi) and Section 3.01(c)(xvii));

(vi) all Accounts Receivable of New Alpha, LLC or its Subsidiaries that arose from the sale of Alpha Products or the conduct of the Alpha Business;

(vii) all bank and brokerage accounts that are solely in the name of one or more members of the Alpha Group and not used by Alpha in the conduct of its business prior to the date hereof;

(viii) all of the rights of New Alpha, LLC or its Subsidiaries under Contracts (other than Real Property Leases and Licenses) that are (x) with customers and suppliers relating to the Alpha Products or (y) primarily used in, primarily related to, or primarily useful in the conduct of the Alpha Business;

(ix) all Data and Records of New Alpha, LLC or its Subsidiaries that are primarily used in, primarily related to, or primarily useful in the conduct of the Alpha Business; provided, however, that, notwithstanding anything herein to the contrary, Generico may obtain an archival copy of any Data and Records to the extent necessary for tax, accounting, litigation, or other similar business purposes;

(x) all (x) Patents, invention disclosures or other registered Intellectual Property owned by New Alpha, LLC or its Subsidiaries that is embedded or inherent in any of the Alpha Products or otherwise related to the conduct of the Alpha Business and (y) other Intellectual Property that is primarily used in, primarily related to, or primarily useful in the conduct of the Alpha Business (the “Alpha IP”). For the avoidance of doubt, all “nab” Intellectual Property shall remain the exclusive property of New Alpha, LLC;

(xi) all Inventories of New Alpha, LLC or its Subsidiaries of Alpha Products (including (x) Chemical Ingredients and (y) Materials (each as defined in the Manufacturing Agreement) and excluding Components (as defined in the Manufacturing Agreement)) or that are used primarily in, primarily related to, or primarily useful in the conduct of the Alpha Business;

19

(xii) all rights of New Alpha, LLC or its Subsidiaries under Licenses granting the right to use Intellectual Property embedded or inherent in any of the Alpha Products or that is primarily used, primarily held for use, or primarily useful, in the conduct of the Alpha Business (the “Alpha Licenses”);

(xiii) all Machinery and Equipment of New Alpha, LLC or its Subsidiaries that are primarily used in, primarily related to, or primarily useful in the Alpha Business (other than the Contributed Machinery and Equipment);

(xiv) all Promotional Materials of New Alpha, LLC or its Subsidiaries that are primarily used in, primarily related to, or primarily useful in, the conduct of the Alpha Business;

(xv) all other Governmental Authorizations of New Alpha, LLC or its Subsidiaries that relate to (x) the facilities that do not constitute Contributed Real Property, (y) the Machinery and Equipment that is not Contributed Machinery and Equipment or (z) that are primarily used in, primarily related to, or primarily useful in, the conduct of the Alpha Business;

(xvi) all credits, prepayments and prepaid expenses of New Alpha, LLC or its Subsidiaries to the extent relating to the Alpha Products or that are primarily used in, primarily related to, or primarily useful in the conduct of the conduct of the Alpha Business;

(xvii) all claims and causes of action of New Alpha, LLC or its Subsidiaries against third parties to the extent relating to the Alpha Products, the Alpha IP, the Alpha Licenses or the Alpha Assets or that are primarily used in, primarily related to, or primarily useful in the conduct of the Alpha Business (excluding claims under Shared Policies which are the subject of ARTICLE V);

(xviii) all goodwill arising out of going concern value of the Alpha Business;

(xix) all Assets of New Alpha, LLC or its Subsidiaries to the extent specifically assigned to any member of the Alpha Group pursuant to this Agreement or any other Transaction Agreement; and

(xx) other Assets of New Alpha, LLC and its Subsidiaries primarily used in, primarily related to, or primarily useful in the conduct of the Alpha Business.

(e) For purposes of this Agreement, “Generico Liabilities” shall mean only the following (and, in each instance below, not including any Liabilities which are Excluded Liabilities):

(i) all Liabilities of any member of the Generico Group under, and all Liabilities for which any member of the Generico Group is expressly made responsible pursuant to, any Transaction Agreement to which it is or becomes a party, including the breach by any member of the Generico Group of any agreement or covenant contained therein, and subject to the terms, conditions and limitations in such agreements;

(ii) all Liabilities listed on Schedule 3.01(e)(ii);

20

(iii) all Liabilities arising out of or relating to (A) any Proceedings that are set forth on Schedule 3.01(e)(iii), or (B) any Proceedings to the extent arising out of, related to, or resulting from the Generico Business commenced after the date hereof;

(iv) all Liabilities, including Environmental Liabilities, of any member of the Alpha Group or the Generico Group, arising prior to the Distribution Time, to the extent primarily based upon, primarily arising out of or primarily resulting from:

(A) the conduct of the Generico Business (including Accounts Payable that arise from the conduct of the Generico Business);

(B) any Generico Assets;

(C) the Contributed Contracts, the Contributed Licenses, and the Contributed Real Property Leases;

(D) any Product Liability claims of third parties relating to any Generico Product; or

(E) rebates claimed or accrued by or under any rebate programs relating to the Generico Business and all charges and discounts relating to group purchasing organizations, buying groups, pharmaceutical benefit management organizations, managed care organizations and rebate programs, including wholesaler and chain pharmacy discounts, and indigent patient programs and patient discount programs relating to the Generico Business.

(f) Notwithstanding the generality of Section 3.01(a), the Generico Liabilities shall not include any Liabilities of any member of the Generico Group or the Alpha Group to the extent not set forth in Section 3.01(e) or that are expressly set forth in this Section 3.01(f). The Liabilities not set forth in Section 3.01(e) or that are expressly set forth in this Section 3.01(f) are the “Excluded Liabilities”. For the purposes of this Agreement, Excluded Liabilities shall include:

(i) all Liabilities arising out of or related to (A) the Alpha Assets or to current or former Assets of any member of the Alpha Group (or any of their respective predecessors), (B) former Assets of the Generico Group (or any of their respective predecessors) which are not related to the Generico Business and (C) the operation of the Alpha Business, including Liabilities under Contracts other than Contributed Contracts and Environmental Liabilities to the extent based upon, arising out of or resulting from operations or environmental conditions at, upon or emanating from any property or facility other than the Contributed Real Property or the Contributed Real Property Leases;

(ii) all Liabilities of any member of the Alpha Group under, and all Liabilities for which a member of the Alpha Group is expressly made responsible pursuant to any Transaction Agreement to which it is or becomes party, including Liabilities related to any breach by the Alpha Group (or prior to the Distribution Time, the Generico Group) of Sections 3.03, 3.04, 3.05 and 3.06 of this Agreement;

21

(iii) all Liabilities of any brokers, finders, investment bankers, or other similar Persons incurred by any member of the Alpha Group or the Generico Group in connection with the Transactions not described on Schedule 3.01(f)(iii);

(iv) all Liabilities for Taxes, except to the extent set forth in the Tax Allocation Agreement;

(v) all Liabilities arising out of or resulting from, (A) claims by stockholders of Alpha (before the Alpha Merger) or Gholdco, including derivative actions, arising out of or resulting from any act or omission taken on or prior to the Distribution Date, (B) any claims naming any officer or director of New Alpha, New Alpha, LLC (including Alpha, its predecessor) or any of their Subsidiaries or any member of the Generico Group relating to acts or omissions, or alleged acts or omissions, of such officer or director (other than to the extent set forth in the Employee Matters Agreement) taken on or prior to the Distribution Date, (C) acts or omissions or alleged acts or omission on the part of the Board of Directors (or similar governing body) of New Alpha, Alpha, New Alpha, LLC, Gholdco or Generico in connection with the approval of the Transaction Agreements and the consummation of the Transactions, or (D) fraud;

(vi) all Liabilities relating to current or former employees, except to the extent set forth in the Employee Matters Agreement; and

(vii) all Liabilities arising out of or relating to any pending Proceedings against any of the PSS Entities or any of their respective equityholders, officers or directors (for the avoidance of doubt, including PSS), or against any member of the Alpha Group or the Generico Group other than as set forth in Section 3.01(e)(iii).

(g) For purposes of this Agreement, an Asset shall be deemed to be used “primarily used”, “primarily related”, and “primarily useful” in the conduct of the Generico Business, or Alpha Business, as applicable, if its use by the Generico Business or Alpha Business, as applicable, relative to other uses of its Assets by the Alpha Business or the Generico Business, as applicable, is its primary use and has been consistent with Alpha and its Subsidiaries’ past practices. In the event any particular Asset may be construed to be both a Generico Asset based on a general categorical description (e.g., by reference to what is “primarily used, primarily related to, or primarily useful in”, or the like) set forth in Section 3.01(c) and an Alpha Asset based upon a specific description (e.g., by it being listed on a schedule, or by a specific reference to such Asset, the products to which it relates, the real property where it is located, or the like) set forth in Section 3.01(d), then such Asset shall be considered a Alpha Asset. Likewise, in the event any particular Asset may be construed to be both an Alpha Asset based on a general categorical description (e.g., by reference to what is “primarily used, primarily related to, or primarily useful in”, or the like) set forth in Section 3.01(d) and a Generico Asset based upon a specific description (e.g., by it being listed on a schedule, or by a specific reference to such Asset, the products to which it relates, the real property where it is located, or the like) set forth in Section 3.01(c), then such Asset shall be considered a Generico Asset. In the event that any dispute arises as to whether an Asset is a Generico Asset or an Alpha Asset, the Generico Parties and the Alpha Parties shall negotiate in good faith after the date hereof to determine whether such Asset should be a Generico Asset or an Alpha Asset. In the event that the parties cannot resolve such dispute despite such good faith negotiations, then each party shall be entitled to any remedy available in law or in equity.

22

(h) Transfer and Assumption Documents. In furtherance of the distribution, assignment, transfer and conveyance of Generico Assets and the acceptance and assumption of Generico Liabilities as provided for in this Section 3.01, New Alpha, LLC and Generico shall execute and deliver, and New Alpha, LLC shall cause the Alpha Subsidiaries to, and Generico shall cause the Generico Subsidiaries to, execute and deliver, such bills of sale, stock powers, certificates of title, assignments of contracts and other instruments of transfer, conveyance, assignment and assumption (“Conveyance and Assumption Instruments”) as and to the extent necessary to evidence the transfer, conveyance and assignment of all of New Alpha, LLC’s and the Alpha Subsidiaries’ rights, title and interest in and to the Generico Assets to Generico, and the acceptance and assumption by Generico of the Generico Liabilities, in each case with effect as of the date hereof, subject to Section 3.01(i) and Section 3.01(j).

(i) Novation of Generico Liabilities. The Alpha Parties and the Generico Parties, at the request of the other, shall use their reasonable best efforts to obtain, or to cause to be obtained, any Consent, substitution, amendment or Governmental Authorization required to novate or assign all Generico Liabilities, including any Alpha Group guarantees of Generico Liabilities, or to obtain in writing the unconditional release of all members of the Alpha Group from the Generico Liabilities, so that, in any such case, the members of the Generico Group will be solely responsible for the Generico Liabilities from and after the date hereof. Until the Alpha Parties and the Generico Parties are able to obtain, or to cause to be obtained, any such Consent, approval, release, substitution or amendment, the applicable member of the Alpha Group shall continue to be subject to the applicable Generico Liability and, unless not permitted by Applicable Law or the terms thereof, Generico shall, as agent or subcontractor for the applicable member of the Alpha Group and, where appropriate in the name thereof, as the case may be, pay, perform and discharge fully such Generico Liability. The Generico Parties shall jointly and severally indemnify each of the Alpha Indemnified Parties and hold each of them harmless against any Generico Liabilities arising in connection therewith. New Alpha, LLC shall, without further consideration, pay and remit, or cause to be paid or remitted to Generico promptly all money, rights and other consideration received by it or any member of its Group in respect of such performance or discharge (unless any such consideration is an Alpha Asset). If and when any such Consent, approval, release, substitution or amendment shall be obtained or such Generico Liability shall otherwise become assignable or able to be novated, New Alpha, LLC shall thereafter assign, or cause to be assigned, all its rights, obligations and other Liabilities thereunder or any rights or obligations of any member of its Group to Generico without payment of further consideration and Generico shall assume such Generico Liability.

(j) Transfer of Generico Assets.

(i) To the extent that the contribution, assignment, transfer, conveyance or delivery to Generico of a Generico Asset as contemplated in this Section 3.01 or Section 5.03 requires the obtaining of any Consent, substitution, amendment or Governmental Authorization, the Generico Parties and the Alpha Parties shall use their reasonable best efforts to obtain any such Consent, substitution, amendment or Governmental Authorization.

(ii) If and to the extent that the contribution, assignment, transfer, conveyance or delivery to Generico of any Generico Assets would constitute a violation of any Applicable Law or require any Consent, substitution, amendment or Governmental Authorization, then, notwithstanding anything to the contrary in any of the Transaction Agreements, unless the parties shall

23

otherwise mutually agree, the contribution, assignment, transfer, conveyance or delivery to the Generico Group of such Generico Assets shall be automatically deemed deferred and any such purported contribution, assignment, transfer, conveyance or delivery shall be null and void until such time as all legal impediments are removed and/or such Consent, substitution, amendment or Governmental Authorization has been obtained. Notwithstanding the foregoing, any such Asset shall be deemed a Generico Asset for purposes of determining whether any Liability is a Generico Liability.

(iii) If and when the Consent, substitution, amendment or Governmental Authorization, the absence of which caused the deferral of the contribution, assignment, transfer, conveyance or delivery of any Generico Asset pursuant to Section 3.01(j)(ii), is obtained, the contribution, assignment, transfer, conveyance or delivery of the applicable Generico Asset shall be effected in accordance with the terms of this Agreement and/or the applicable Transaction Agreement.

(iv) The member of the Alpha Group retaining any Generico Asset due to the deferral of the transfer of such Generico Asset shall not be obligated, in connection with the foregoing, to expend any money unless Generico provides written confirmation of an obligation for prompt reimbursement therefor, along with reasonable out-of-pocket expenses, attorneys’ fees and recording or similar fees. Prior to any transfer thereof, the applicable member of the Alpha Group shall, at Generico’s expense, operate and maintain such Generico Asset in the ordinary course of business consistent with past practice until such transfer is effective.

(v) Each of the parties hereto agrees that until any such Generico Asset is contributed, transferred, conveyed or delivered to Generico, the Alpha Parties, and Generico Parties shall cooperate (at the expense of the Generico Parties) so that Generico or a Generico Subsidiary designated by Generico shall obtain the economic claims, rights, and benefits under such asset as if such asset were contributed, transferred, conveyed, or delivered as of the date hereof. The Alpha Parties shall promptly pay over to Generico when received all monies and other benefits or rights arising with respect to such assets.

(vi) All costs and expenses associated with the contribution, assignment, transfer, conveyance or delivery of any Asset pursuant to this Agreement, including, without limitation, those associated with transfer taxes, obtaining consents, transportation, and relocation, shall be borne equally by Generico and New Alpha, LLC.

(vii) It is the intention of the parties to this Agreement that the transfer, assignment, conveyance or delivery of any Asset by an Alpha Party to a Generico Party pursuant to this Section 3.01(j) or Section 5.03 shall be treated as relating back to the Generico Contribution as an adjustment to the Assets contributed to Generico in the Generico Contribution and as owned by New Alpha, LLC immediately prior to the Generico Contribution. The parties to this Agreement shall not take any position inconsistent with such intention before any Tax authority, except to the extent that a final determination (as defined in Section 1313 of the Code) with respect to any of the parties to this Agreement causes any such transfer, assignment, conveyance or delivery not to be so treated.

24

(k) [Intentionally Deleted]

(l) No Representations and Warranties.

The Generico Parties understand and agree that, except as expressly set forth herein (including Section 4.03), the Alpha Parties are not, in this Agreement, in any Transaction Agreement or any Conveyancing and Assumption Instrument or in any other agreement or document contemplated by any of the Transaction Agreements representing or warranting to in any way (a) as to the value or freedom from encumbrance of, or any other matter concerning, any Generico Assets or (b) as to the legal sufficiency to convey title to any Generico Assets of the execution, delivery and filing of the instruments relating to the conveyance of title thereto, it being agreed and understood that all the Generico Assets are being transferred “as is, where is” and that the Generico Parties shall bear the economic and legal risk that any conveyances of such Assets shall prove to be insufficient or that the Generico Parties’ title to any such Assets shall be other than good and marketable and free from encumbrances. Similarly, the Generico Parties understand and agree that the Alpha Parties are not, in this Agreement, any Transaction Agreement or in any other agreement or document contemplated by any Transaction Agreement, including any Conveyancing and Assumption Instrument, representing or warranting in any way that the obtaining of the Consents or approvals, the execution and delivery of instruments and documents and the making of the filings and applications contemplated by this Agreement or any other Transaction Agreement shall satisfy the provisions of all applicable agreements or the requirements of all Applicable Laws or judgments, it being agreed and understood that the Generico Parties and the Alpha Parties shall bear the economic and legal risk that any necessary Consents or approvals are not obtained or that any requirements of Applicable Law are not complied with as set forth in Section 3.01(j).

(m) Transfer of Assets from Generico Parties.

(i) To the extent the transfer, assignment, conveyance or delivery of any Asset to the Alpha Parties as contemplated in this Section 3.01 or Section 5.03 requires the obtaining of any Consent, substitution, amendment or Governmental Authorization, the Generico Parties and the Alpha Parties shall use their reasonable best efforts (at the expense of the Alpha Parties) to obtain any such Consent, substitution, amendment or Governmental Authorization.

(ii) If and to the extent the transfer, assignment, conveyance or delivery of such Alpha Asset to the Alpha Parties would constitute a violation of any Applicable Law or require any Consent, substitution, amendment or Governmental Authorization, then, notwithstanding anything to the contrary in any of the Transaction Agreements, unless the parties shall otherwise mutually agree, the transfer, assignment, conveyance or delivery of such Asset to the Alpha Parties shall be automatically deemed deferred and any such transfer, assignment, conveyance or delivery shall be null and void until such time as all legal impediments are removed and/or such Consent, substitution, amendment or Governmental Authorization has been obtained. Notwithstanding the foregoing, any such Asset shall not be deemed a Generico Asset for purposes of determining whether any Liability is a Generico Liability.

(iii) If and when the Consent, substitution, amendment or Governmental Authorization, the absence of which caused the deferral of the transfer, assignment, conveyance or delivery of any such Asset pursuant to this Section 3.01 is obtained, the transfer, assignment, conveyance or delivery of such Asset shall be effected in accordance with the terms of this Agreement and/or the applicable Transaction Agreement.

25

(iv) The member of the Generico Group retaining any Alpha Asset due to the deferral of the transfer of such Asset shall not be obligated, in connection with the foregoing, to expend any money unless New Alpha, LLC provides written confirmation of an obligation for prompt reimbursement therefor, along with reasonable out-of-pocket expenses, attorneys’ fees and recording or similar fees. Prior to any transfer thereof, the applicable member of the Generico Group shall, at New Alpha, LLC’s expense, operate and maintain such Asset in the ordinary course of business consistent with past practice until such transfer is effective.

(v) Each of the parties hereto agrees that until any such Asset is transferred, assigned, conveyed or delivered to New Alpha, LLC, the Alpha Parties and Generico Parties shall cooperate (at the expense of the Alpha Parties) so that New Alpha or a Alpha Subsidiary designated by New Alpha shall obtain the economic claims, rights, and benefits under such asset as if such asset were transferred, conveyed, or delivered as of the date hereof. The Generico Parties shall promptly pay over to New Alpha, LLC when received all monies and other benefits or rights arising with respect to such Asset.

(vi) It is the intention of the parties to this Agreement that the transfer, assignment, conveyance or delivery of any Asset by a Generico Party to an Alpha Party pursuant to this Section 3.01(m) or Section 5.03 shall be treated as relating back to the Generico Contribution and the Alpha Contribution as an adjustment to the Assets contributed to Generico in the Generico Contribution and as owned by New Alpha, LLC immediately prior to the Alpha Contribution. The parties to this Agreement shall not take any position inconsistent with such intention before any Tax authority, except to the extent that a final determination (as defined in Section 1313 of the Code) with respect to any of the parties to this Agreement causes any such transfer, assignment, conveyance or delivery not to be so treated.

(vii) The parties agree that the Cruce Davila Property shall be subdivided and a portion thereof conveyed to a subsidiary of Alpha in accordance with Schedule 3.01(m)(vii) as promptly as practicable after the Share Distribution.

Section 3.02. [Intentionally Omitted.]

Section 3.03. The Distribution Agent.

Prior to the Distribution Time and subject to the terms and conditions of this Agreement, Gholdco shall enter into an agreement with the Distribution Agent providing for, among other things, the transactions described in this ARTICLE III (the “Distribution Agent Agreement”).

Section 3.04. [Intentionally Omitted.]

Section 3.05. Delivery of Distribution Shares.

Subject to the terms and conditions of this Agreement, at or prior to the Distribution Time, Gholdco shall deliver to the Distribution Agent for the benefit of each record holder of Gholdco Common Stock on the Gholdco Record Date (or, if applicable, any transferee of such holder that purchased such holder’s shares in the “regular way” market), the Distribution Shares (which shall

26

represent all of the outstanding shares of New Alpha Common Stock). Gholdco shall cause the transfer agent for the shares of New Alpha Common Stock to instruct the Distribution Agent to hold in trust the appropriate number of such shares of New Alpha Common Stock for each holder of record of Gholdco Common Stock as of the Gholdco Record Date (or, if applicable, any transferee of such holder that purchased such holder’s shares in the “regular way” market).

Section 3.06. Registration Statement; Information Statement; Other Filings.

(a) New Alpha shall file such amendments and supplements to the Registration Statement as may be necessary in order to cause the Registration Statement to remain effective as required by Applicable Law, including filing such amendments and supplements to the Registration Statement as may be required by the SEC or other Applicable Laws.

(b) The parties shall also cooperate in preparing, filing with the SEC and causing to become effective registration statements or amendments thereof which are required to reflect the establishment of, or amendments to, any employee benefit and other plans necessary or appropriate in connection with the Share Distribution or other transactions contemplated by this Agreement and the other Transaction Agreements, including the Employee Matters Agreement. The parties shall prepare and, to the extent required under Applicable Law, file with the SEC any such documentation that the parties determine are necessary or desirable to effectuate the Share Distribution, and the parties shall each use its reasonable commercial efforts to obtain all necessary approvals from the SEC with respect thereto as soon as practicable.

(c) The parties shall take all such actions as may be necessary or appropriate under the securities or blue sky laws of the United States (and any comparable Applicable Laws under any foreign jurisdiction) in connection with the Share Distribution.

Section 3.07. The Share Distribution.

Subject to the terms and conditions of this Agreement, Gholdco shall instruct the Distribution Agent to effect the Share Distribution pursuant to the Distribution Agent Agreement to each holder of record of Gholdco Common Stock on the Gholdco Record Date (or, if applicable, any transferee of such holder that purchased such holder’s shares in the “regular way” market).

Section 3.08. Actions In Connection with the Share Distribution.

The parties shall take all reasonable steps necessary and appropriate to cause the conditions set forth in Section 3.10 to be satisfied and to effect the Share Distribution and the other Transactions contemplated by this Agreement, or any portion thereof, on the terms, in the manner and on the Distribution Date.

Section 3.09. Sole Discretion.

Alpha or Gholdco may at any time and from time to time, in its sole discretion, until the completion of the Share Distribution decide to abandon the Share Distribution or modify or change the terms of the Share Distribution, including, without limitation, by accelerating or delaying the timing of the consummation of all or part of the Share Distribution.

27

Section 3.10. Conditions to the Generico Contribution and the Share Distribution.

The following are the conditions of the parties to consummate the Generico Contribution and the Share Distribution. Each of these conditions may be waived by the Board of Directors of Gholdco. The conditions are for the sole benefit of Gholdco and shall not give rise to or create any duty on the part of Gholdco or its Board of Directors to waive or not waive any such condition:

(a) No Applicable Laws shall have been adopted, promulgated or enforced by any Governmental Entity, and no Injunction shall be in effect, having the effect of making the Generico Contribution or the Share Distribution or any material provision of this Agreement illegal or otherwise prohibiting consummation of the Generico Contribution or the Share Distribution or the performance of any material provision of this Agreement.

(b) The Registration Statement shall have been declared effective by the SEC, with no stop order in effect with respect thereto, and the Information Statement shall have been mailed to the Gholdco stockholders.

(c) The New Alpha Common Stock to be delivered in the Share Distribution and the Gholdco Commom Stock to be delivered in the Alpha Merger shall have been approved for listing on Nasdaq, subject to official notice of issuance.

(d) The actions and filings with regard to state securities and blue sky laws of the United States (and any comparable Applicable Laws under any foreign jurisdictions) shall have been taken and, where applicable, have become effective or been accepted.

(e) The Private Letter Ruling shall remain in full force and effect and shall not have been modified or amended in any respect adversely affecting the Tax consequences set forth therein.

(f) New Alpha shall have received a reasoned opinion letter from Fried, Frank, Harris, Shriver & Jacobson LLP (“Fried Frank”), dated the Distribution Date, such opinion letter to be in form and substance satisfactory to New Alpha (in its sole discretion), to the effect that the Share Distribution (i) should be treated as satisfying the business purpose requirement described in Treasury Regulation Section 1.355-2(b)(1) and (ii) should not be treated as being used principally as a device for the distribution of earnings and profits of the distributing corporation or the controlled corporation or both under Section 355(a)(1)(B) of the Code (the “Tax Opinion”). In rendering the Tax Opinion, Fried Frank may rely on such documents, information and materials as it deems necessary or appropriate, including, without limitation, (x) as to matters of fact upon (1) the representations contained in this Agreement, (2) representations from New Alpha, Gholdco, the PSS Entities and other parties as Fried Frank may reasonably request for purposes of rendering the Tax Opinion and (3) the facts presented and representations made in connection with obtaining the Private Letter Ruling and (y) as to legal matters, upon the rulings issued by the Internal Revenue Service in the Private Letter Ruling.

(g) Each of the Transaction Agreements required to be executed and delivered on or prior to the Distribution Time shall have been duly executed and delivered by the parties thereto and shall be in full force and effect.

28

(h) Generico shall have consummated the Debt Financing and have paid the Generico Cash Distribution to Gholdco.

(i) The Cash Contribution shall have been paid, on or prior to the Distribution Date, by Gholdco to New Alpha.

(j) A valuation or appraisal firm of national reputation shall have delivered an opinion to the Board of Directors of Gholdco and Alpha and the Board of Managers or managing member of Generico in form and substance satisfactory to them with respect to solvency of (and related matters regarding the solvency of) and such opinion shall not have been withdrawn, modified or rescinded.

(k) The Board of Directors (or similar governing body) of Alpha, New Alpha, LLC and Gholdco shall have approved the Generico Contribution and the Share Distribution and shall not have determined that any events or developments shall have occurred that make it inadvisable to effect the Generico Contribution and/or the Share Distribution.

ARTICLE IV.

MUTUAL RELEASE; INDEMNIFICATION

Section 4.01. Mutual Release.

(a) Effective as of the Distribution Time and except as provided in Section 4.01(b) or as otherwise expressly provided in the Transaction Agreements, each of the Generico Parties, on behalf of themselves and each of the other members of the Generico Group, on the one hand, and the Alpha Parties, on behalf of themselves and each of the other members of the Alpha Group, on the other hand, hereby releases and forever discharges the members of the other Group and their respective directors, officers and employees (in each case, in their respective capacities as such) and their respective heirs, executors, administrators, successors and assigns, of and from all debts, demands, actions, causes of action, suits, accounts, covenants, contracts, agreements, damages, claims and Liabilities whatsoever of every name and nature, both in law and in equity, which the releasing party has or ever had or ever will have, which arise out of, result from or relate to events, circumstances or actions taken by such other party occurring or failing to occur or any conditions existing at or prior to the Distribution Time.

(b) Nothing in Section 4.01(a) shall in any way affect or impair the rights of any Person under this Agreement, any other Transaction Agreement or any Contract between any member of the Generico Group, on the one hand, and any member of the Alpha Group, on the other hand, that does not terminate as of, or prior to, the Distribution Date (including the right to enforce such agreement). In addition, nothing in Section 4.01(a) shall release or discharge any Person from:

(i) Any Liabilities or obligations under or resulting from any Contract between any member of the Generico Group, on the one hand, and any member of the Alpha Group, on the other hand, that does not terminate as of, or prior to, the Distribution Date;

29

(ii) any Liability or obligation, assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with, or any other Liability of any member of a Group under, this Agreement, any other Transaction Agreement or the Merger Agreement; or

(iii) any Liability the release of which would result in the release of any Person other than a member of the Generico Group or the Alpha Group or their respective directors, officers and employees, or their respective heirs, executors, administrators, successors and assigns; provided, however, that the parties agree not to, and to cause the other members of their Group not to, bring suit against any member of the other Group or any of their respective directors, officers and employees, or their respective heirs, executors, administrators, successors and assigns, with respect to any such Liability or otherwise take any action to enforce such Liability.

(c) The Alpha Parties agree, for themselves and as agents for each other member of the Alpha Group, not to make any claim or demand, or commence any Proceeding asserting any claim or demand, including any claim of contribution or any indemnification, against either of the Generico Parties or any other member of the Generico Group or any of their respective directors, officers and employees, with respect to any Liabilities released pursuant to this Section 4.01. The Generico Parties agree, for themselves and as agents for each other member of the Generico Group, not to make any claim or demand, or commence any Proceeding asserting any claim or demand, including any claim of contribution or any indemnification, against either of the Alpha Parties or any other member of the Alpha Group or any of their respective directors, officers and employees, with respect to any Liabilities released pursuant to this Section 4.01.

(d) At any time, at the request of any other party, each party shall cause each member of its respective Group to execute and deliver releases reflecting the provisions of this Section 4.01; provided that such member is a member of the applicable Group at the time of such request.

(e) Each of the Generico Parties on behalf of itself and the other members of the Generico Group hereby releases and forever discharges each member of any Board of Directors of any member of the Generico Group (in each case, in their respective capacities as such) of and from all debts, demands, actions, causes of action, suits, accounts, covenants, contracts, agreements, damages, claims and Liabilities whatsoever of every name and nature, both in law and in equity, which the releasing party has or ever had or ever will have, which arise out of or result from the declaration by any such Board of Directors of any of the distributions included in the Transactions.

Section 4.02. Indemnification by the Generico Parties.

Subject to the provisions of this ARTICLE IV, from and after the Distribution Time, the Generico Parties shall, and shall cause each member of the Generico Group to, indemnify, defend and hold harmless the Alpha Indemnified Parties from and against, and pay or reimburse, as the case may be, the Alpha Indemnified Parties for, all Indemnifiable Losses, as incurred, suffered by any Alpha Indemnified Party based upon, arising out of or resulting from the following:

(a) the Generico Liabilities (including the failure by Gholdco or any other member of the Generico Group to pay, perform or otherwise discharge the Generico Liabilities in accordance with their terms and including Third Party Claims to the extent that, if the allegations contained therein were proven true, would be Generico Liabilities), whether such Indemnifiable Losses are based upon, arise out of or relate to events, occurrences, actions, omissions, facts, circumstances or conditions occurring, existing or asserted before, at or after the Distribution Time;

30

(b) the enforcement by the Alpha Indemnified Parties of their rights to be indemnified, defended and held harmless under this Section 4.02; or

(c) the use by any member of the Generico Group of any Alpha Trademarks.

Section 4.03. Indemnification by the Alpha Parties.

Subject to the provisions of this ARTICLE IV, from and after the Distribution Time, the Alpha Parties shall, and shall cause each member of the Alpha Group to, indemnify, defend and hold harmless the Generico Indemnified Parties from and against, and pay or reimburse, as the case may be, the Generico Indemnified Parties for all Indemnifiable Losses, as incurred, suffered by any Generico Indemnified Party based upon, arising out of or resulting from the following:

(a) the Alpha Liabilities (including the failure by New Alpha or any other member of the Alpha Group to pay, perform or otherwise discharge the Alpha Liabilities in accordance with their terms and including Third Party Claims to the extent that, if the allegations contained therein were proven true, would be Alpha Liabilities), whether such Indemnifiable Losses are based upon, arise out of or relate to events, occurrences, actions, omissions, facts, circumstances or conditions occurring, existing or asserted before, at or after the Distribution Time;

(b) the enforcement by the Generico Indemnified Parties of their rights to be indemnified, defended and held harmless under this Section 4.03; or

(c) the use by any member of the Alpha Group of any Generico Trademarks;

Section 4.04. Notice of Claims.

Any Generico Indemnified Party or Alpha Indemnified Party seeking indemnification hereunder (the “Indemnified Party”) shall give promptly to the Person obligated to provide indemnification to such Indemnified Party (the “Indemnitor”) a notice (a “Claim Notice”) describing in reasonable detail the facts giving rise to the claim for indemnification hereunder and shall include in such Claim Notice (if then known) the amount or the method of computation of the amount of such claim, or a reasonable estimate thereof, and a reference to the provision of this Agreement or any other agreement, document or instrument executed hereunder or in connection herewith upon which such claim is based; provided, however, that a Claim Notice in respect of any pending or overtly threatened action at law or suit in equity by or against a third Person as to which indemnification will be sought shall be given promptly after the threat has been communicated or the action or suit is commenced; provided further that, in each case, the failure to give such notice shall not relieve the Indemnitor of its obligations hereunder except to the extent it shall have been prejudiced by such failure.

31

Section 4.05. Determination of Amount.

(a) In calculating any amount that any Indemnitor is required to pay an Indemnified Party in respect of Indemnifiable Losses provided under this Agreement, there shall be deducted any insurance recovery actually received by or on behalf of such Indemnified Party under any Policy (provided that if the insurance recovery is received following when the indemnity payment is made, the insurance recovery shall be paid over when realized). In determining the amount of any Indemnifiable Losses, such amount shall be (i) reduced to take into account any net Tax benefit realized by the Indemnified Party arising from the incurrence or payment by the Indemnified Party of such Indemnifiable Losses and (ii) increased to take into account any net Tax cost incurred by the Indemnified Party as a result of the receipt or accrual of payments hereunder (grossed-up for such increase), in each case determined by treating the Indemnified Party as recognizing all other items of income, gain, loss, deduction or credit before recognizing any item arising from such Indemnifiable Losses (provided that if the Tax benefit or cost is realized in a Tax period following the period in which the indemnity payment is made, the Tax benefit or cost amount (as the case may be) shall be paid over when realized). It is the intention of the parties to this Agreement that indemnity payments made pursuant to this Agreement are to be treated as relating back to the Cash Contribution as an adjustment to the amount of cash contributed by Gholdco to New Alpha, LLC. The parties to this Agreement shall not take any position inconsistent with such intention before any Tax authority, except to the extent that a final determination (as defined in Section 1313 of the Code) with respect to the recipient party causes any such payment not to be so treated.

(b) After the giving of any Claim Notice pursuant to Section 4.04, the amount of indemnification to which an Indemnified Party shall be entitled under this ARTICLE IV shall be determined: (i) by the written agreement between the Indemnified Party and the Indemnitor; (ii) by a final judgment or decree of any court of competent jurisdiction; or (iii) by any other means to which the Indemnified Party and the Indemnitor shall agree. The judgment or decree of a court shall be deemed final when the time for appeal, if any, shall have expired and no appeal shall have been taken or when all appeals taken shall have been finally determined. The Indemnified Party shall have the burden of proof in establishing the amount of Indemnifiable Losses suffered by it.

(c) The Indemnitor shall pay all amounts payable pursuant to Section 4.05(b) by wire transfer of immediately available funds promptly, but in no case later than ten (10) days, after the date on which such amount has been finally and conclusively determined.

Section 4.06. Third Party Claims.

(a) If a claim or demand is made against an Indemnified Party, or an Indemnified Party shall otherwise learn of an assertion, by any Person who is not a party to this Agreement (or an Affiliate thereof) as to which an Indemnitor is reasonably likely to be obligated to provide indemnification pursuant to this Agreement (a “Third Party Claim”), such Indemnified Party will notify the Indemnitor in writing, and in reasonable detail, of the Third Party Claim reasonably promptly after becoming aware of such Third Party Claim; provided, however, that failure to give such notification will not affect the indemnification provided hereunder except to the extent the Indemnitor shall have been actually prejudiced as a result of such failure. Thereafter, the Indemnified Party will deliver

32

to the Indemnitor, promptly after the Indemnified Party’s receipt thereof, copies of all material notices and documents (including court papers) received or transmitted by or on behalf of the Indemnified Party relating to the Third Party Claim; provided, however, that failure to give such notification will not affect the indemnification provided hereunder except to the extent the Indemnitor shall have been actually prejudiced as a result of such failure.

(b) If a Third Party Claim is made against an Indemnified Party, the Indemnitor will be entitled to participate in or to assume the defense thereof (in either case, at the expense of the Indemnitor) with counsel selected by the Indemnitor and reasonably satisfactory to the Indemnified Party. Should the Indemnitor so elect to assume the defense of a Third Party Claim, the Indemnitor will not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof; provided that, if in the Indemnified Party’s reasonable judgment a conflict of interest exists in respect of such claim, such Indemnified Party will have the right to employ separate counsel reasonably satisfactory to the Indemnitor to represent such Indemnified Party and in that event the reasonable fees and expenses of such separate counsel (but not more than one separate counsel for all Indemnified Parties similarly situated) shall be paid by such Indemnitor (to the extent such costs are otherwise indemnifiable hereunder). If the Indemnitor assumes the defense of any Third Party Claim, the Indemnified Party will have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the Indemnitor, it being understood that the Indemnitor will control such defense. If the Indemnitor assumes the defense of any Third Party Claim, the Indemnitor will promptly supply to the Indemnified Party copies of all material correspondence and documents relating to or in connection with such Third Party Claim and keep the Indemnified Party informed of all material developments relating to or in connection with such Third Party Claim. If the Indemnitor chooses to assume the defense of a Third Party Claim, the parties hereto will cooperate in the defense thereof (such cooperation to be at the expense, including reasonable legal fees and expenses, of the Indemnitor), which cooperation shall include the retention in accordance with this Agreement and (upon the Indemnitor’s request) the provision to the Indemnitor of records and Information that are reasonably relevant to such Third Party Claim, and making employees, officers, directors, and, to the extent practicable, agents available on a mutually convenient basis to provide additional Information and explanation of any material provided hereunder.

(c) No Indemnitor will consent to any settlement, compromise or discharge (including the consent to entry of any judgment) of any Third Party Claim without the Indemnified Party’s prior written consent (which consent will not be unreasonably withheld, delayed or conditioned); provided that, if the Indemnitor assumes the defense of any Third Party Claim, the Indemnified Party will agree to any settlement, compromise or discharge of such Third Party Claim that the Indemnitor may recommend and that by its terms obligates the Indemnitor to pay the full amount of Indemnifiable Losses in connection with such Third Party Claim and unconditionally and irrevocably releases the Indemnified Party and its Affiliates completely from all Liability in connection with such Third Party Claim; provided, however, that the Indemnified Party may refuse to agree to any such settlement, compromise or discharge that (i) provides for injunctive or other nonmonetary relief affecting the Indemnified Party or any of its Affiliates, (ii) includes a finding or admission or violation of law, guilt or responsibility of the Indemnified Party or any of its Affiliates, (iii) includes a finding or admission that would have an adverse effect on other claims made or threatened against the Indemnified Party or any of its Affiliates, or (iv) in the reasonable opinion of the Indemnified Party, would otherwise materially adversely affect

33

the Indemnified Party or any of its Affiliates. Whether or not the Indemnitor shall have assumed the defense of a Third Party Claim, the Indemnified Party will not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the Indemnitor’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned).

(d) In the event of payment in full by an Indemnitor to any Indemnified Party in connection with any Third Party Claim, such Indemnitor will be subrogated to and shall stand in the place of such Indemnified Party as to any events or circumstances in respect of which such Indemnified Party may have any right or claim relating to such Third Party Claim against any claimant or plaintiff asserting such Third Party Claim or against any other Person. Such Indemnified Party will cooperate with such Indemnitor in a reasonable manner, and at the cost and expense of such Indemnitor, in prosecuting any subrogated right or claim.

Section 4.07. Exclusive Remedy.

Subject to Section 4.10, Section 4.11 and Section 4.12, this ARTICLE IV shall be the exclusive remedy of the parties following the Distribution Time with respect to matters covered by this ARTICLE IV.

Section 4.08. Limitations.

IN NO EVENT SHALL ANY PARTY BE LIABLE FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL (INCLUDING LOSS OF REVENUES OR PROFITS), EXEMPLARY OR PUNITIVE DAMAGES ARISING UNDER ANY LEGAL OR EQUITABLE THEORY OR ARISING UNDER OR IN CONNECTION WITH THIS ARTICLE IV, ALL OF WHICH ARE HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES REGARDLESS OF WHETHER OR NOT ANY PARTY TO THIS AGREEMENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES PAID BY AN INDEMNIFIED PARTY TO A THIRD PERSON IN RESPECT OF A THIRD PARTY CLAIM SHALL NOT BE DEEMED TO BE SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES FOR PURPOSES OF THIS AGREEMENT.

Section 4.09. Survival of Indemnities.

The obligations of each of the Generico Parties and the Alpha Parties under this ARTICLE IV will not terminate at any time and will survive the sale or other transfer by any member of a Group of any Assets or businesses or the assignment by any member of a Group of any Liabilities.

Section 4.10. Exclusivity of Tax Allocation Agreement.

Except for those Tax matters specifically addressed herein or the Employee Matters Agreement, the Tax Allocation Agreement will be the exclusive agreement among the parties with respect to all Tax matters, including indemnification in respect of Tax matters.

34

Section 4.11. Exclusivity of Employee Matters Agreement.

Except for those employee matters specifically addressed herein or the Tax Allocation Agreement, the Employee Matters Agreement will be the exclusive agreement among the parties with respect to all employee matters.

Section 4.12. Other Transaction Agreements.

Notwithstanding anything to the contrary, nothing in this agreement shall modify or affect the rights, obligations, indemnities, and limitations of the parties under the other Transaction Agreements with respect to the matters addressed therein.

ARTICLE V.

CERTAIN OTHER MATTERS

Section 5.01. Insurance.

(a) Coverage. Subject to the provisions of this Section 5.01, coverage of the Generico Parties under all Policies shall cease as of the Distribution Time. From and after the Distribution Time, the Generico Parties and their Subsidiaries will be responsible for obtaining and maintaining all insurance coverages in their own right. All Policies will be retained by the Alpha Parties, together with all rights, benefits and privileges thereunder (including the right to receive any and all return premiums with respect thereto), except that the Generico Parties will have the rights in respect of Policies to the extent described in Section 5.01(b).

(b) Rights Under Shared Policies. From and after the Distribution Date, (i) the Generico Parties will have the right to assert claims (and the Alpha Parties will use reasonable best efforts to assist the Generico Parties in asserting claims if so requested) for any loss, liability or damage with respect to the Generico Business under Shared Policies with third party insurers that are “occurrence basis” insurance policies (“Occurrence Basis Policies”) arising out of insured incidents occurring from the date coverage thereunder first commenced until the Distribution Time to the extent that the terms and conditions of any such Occurrence Basis Policies and agreements relating thereto so allow; (ii) the Generico Parties will have the right to continue to prosecute claims with respect to the Generico Business properly asserted with the insurer prior to the Distribution Time (and the Alpha Parties will use reasonable best efforts to assist the Generico Parties in connection therewith if so requested) under Shared Policies with third party insurers that are insurance policies written on a “claims made” basis (“Claims Made Policies”) arising out of insured incidents occurring from the date coverage thereunder first commenced until the Distribution Time to the extent that the terms and conditions of any such Claims Made Policies and agreements relating thereto so allow; (iii) with respect to Shared Policies, the members of the Alpha Group shall request that the underwriters or claims administrators under such policies provide the Generico Parties with detailed loss Information with respect to the Generico Business to the extent required to complete future renewal negotiations and actuarial reviews of the Generico Parties, at no cost to the Generico Parties; and (iv) to the extent that New Alpha, LLC is able to keep members of the Generico Group as named insureds under Claims Made Policies at no expense or other cost (financial or otherwise) to any member of

35

the Alpha Group or any of its Affiliates, which New Alpha, LLC shall use its reasonable best efforts to do, and to the extent permitted by such Claims Made Policies, the Generico Parties may prosecute claims with respect to the Generico Business under such Claims Made Policies arising out of insured incidents occurring from the date of coverage thereunder first commenced until the Distribution Time to the extent that the terms and conditions of any such Claims Made Policies and agreements relating thereto so allow; provided that in the case of clauses (i) through (iv), (A) all of the Alpha Parties’ and each of the other members of the Alpha Group’s reasonable out of pocket costs and expenses incurred and payable to third parties in connection with the foregoing are promptly paid by the Generico Parties, (B) the Alpha Parties and the other members of the Alpha Group may, at any time, without liability or obligation to the Generico Parties or any of their Subsidiaries (other than as set forth in Section 5.01(c), amend, commute, terminate, buy-out, extinguish liability under or otherwise modify any Claims Made Policies (and such claims shall be subject to any such amendments, commutations, terminations, buy-outs, extinguishments and modifications), (C) such claims will be subject to (and recovery thereon will be reduced by the amount of) any applicable deductibles, retentions or self-insurance provisions, (D) such claims will be subject to (and recovery thereon will be reduced by the amount of) any payment or reimbursement obligations of the Alpha Parties, any of their Subsidiaries or any Affiliate of the Alpha Parties or any their Subsidiaries in respect thereof and (E) such claims will be subject to exhaustion of existing sublimits and aggregate limits. In the event that claims submitted by the Alpha Parties and the Generico Parties under the Shared Policies exhaust existing policy limits under the Shared Policies in any one policy year, the amount payable under the Shared Policies shall be allocated pro rata based on the amounts paid in satisfaction of those claims or the amounts that would have been paid to satisfy such claims absent exhaustion of policy limits. The Alpha Parties’ obligation to use reasonable best efforts to assist the Generico Parties in asserting claims under applicable Shared Policies will include using reasonable best efforts in assisting the Generico Parties to establish their right to coverage under such Shared Policies (so long as all of the Alpha Parties’ reasonable out-of-pocket costs and expenses in connection therewith are promptly paid by the Generico Parties). None of the Alpha Parties or their Subsidiaries will bear any Liability for the failure of an insurer to pay any claim under any Shared Policy. It is understood that, except to the extent New Alpha, LLC is able to keep members of the Generico Group as named insureds under Claims Made Policies as provided in, and subject to the terms and conditions of, clause (iv) above, any Claims Made Policies will not provide any coverage to the Generico Parties and other members of the Generico Group for incidents occurring prior to the Distribution Time but that are asserted with the insurance carrier after the Distribution Time.

(c) The Alpha Parties Proceedings. In the event that after the Distribution Time the Alpha Parties or any of their Subsidiaries propose to amend, commute, terminate, buy-out, extinguish liability under or otherwise modify any Shared Policies (other than Occurrence Based Policies, which may not be amended, commuted, terminated, bought-out, extinguished, or modified) under which the Generico Parties have or may in the future have rights to assert claims pursuant to Section 5.01(b) in a manner that would adversely affect any such rights of the Generico Parties, (i) the Alpha Parties will give the Generico Parties prior notice thereof and consult with the Generico Parties with respect to such action (it being understood that the decision to take any such action will be in the sole discretion of the Alpha Parties) and (ii) the Alpha Parties will pay to the Generico Parties its equitable share (which shall be mutually agreed upon by the Alpha Parties and the Generico Parties, acting reasonably, based on the amount of premiums paid by or allocated to the Generico Business in respect of the applicable Shared Policy), if any, of any net proceeds actually received by the Alpha Parties from the insurer under the applicable Shared Policy as a result of such action by the Alpha Parties (after deducting the Alpha Parties’ reasonable costs and expenses incurred in connection with such action).

36

(d) Administration From and after the Distribution Time:

(i) one of the Alpha Parties will be responsible for the Claims Administration with respect to claims of the Alpha Parties and their Subsidiaries under Shared Policies; and

(ii) one of the Generico Parties will be responsible for the Claims Administration with respect to claims of the Generico Parties and their Subsidiaries under Shared Policies.

(e) Insurance Premiums. From and after the Distribution Time, the Alpha Parties will pay all premiums, Taxes, assessments or similar charges (retrospectively-rated or otherwise) as required under the terms and conditions of the respective Shared Policies in respect of periods prior to the Distribution Date.

(f) Agreement for Waiver of Conflict and Shared Defense. In the event that a Shared Policy provides coverage for both the Alpha Parties and/or one of their Subsidiaries, on the one hand, and the Generico Parties and/or one of their Subsidiaries, on the other hand, relating to the same occurrence, the Alpha Parties and the Generico Parties agree to defend jointly and to waive any conflict of interest necessary to the conduct of that joint defense. Any deductible applicable to such occurrences under such Shared Policies will be allocated between the Alpha Parties and/or one of their Subsidiaries, on the one hand, and the Generico Parties and/or one of their Subsidiaries, on the other hand, on a pro rata basis by claim. Nothing in this Section 5.01(f) will be construed to limit or otherwise alter in any way the indemnity obligations of the parties to this Agreement, including those created by this Agreement, by operation of law or otherwise.

(g) Duty to Mitigate Settlements. To the extent that any member of any Group is responsible for the Claims Administration for any claims under any Shared Policies after the Distribution Date, it shall use its reasonable best efforts to mitigate the amount of any settlements of such claims.

Section 5.02. Use of Names.

(a) Subject to Section 5.02(c) below, any material showing any affiliation or connection of any member of the Generico Group with any member of the Alpha Group shall not be used by the Generico Parties or any member of the Generico Group after the Distribution Time, except that the restrictions contained in this Section 5.02(a) shall not apply to filings, reports and other documents required by Applicable Laws or regulations of securities exchanges to be filed and/or made publicly available and shall not apply to any showing of affiliation or conflicts as a result of common directors or stockholders.

(b) Subject to Section 5.02(d) below, any material showing any affiliation or connection of any member of the Alpha Group with any member of the Generico Group shall not be used by the Alpha Parties or any member of the Alpha Group after the Distribution Time, except that the restrictions contained in this Section 5.02(b) shall not apply to filings, reports and other documents required by Applicable Laws or regulations of securities exchanges to be filed and/or made publicly available and shall not apply to any showing of affiliation or conflicts as a result of common directors or stockholders.

37

(c) The parties agree that, during the period from the Distribution Time until the first anniversary of the Distribution Time (the “Generico Sell-off Period”), the Generico Group shall be entitled to continue to use all trademarks or other source identifiers owned by the members of the Alpha Group (the “Alpha Trademarks”) to the extent that such Alpha Trademarks are contained as of the Distribution Date on any product packaging, business cards, schedules, stationery, displays, signs, Promotional Materials, manuals, forms, computer software and other material used in the Generico Business, without any obligation on the part of the Generico Parties to pay royalties or similar fees to any member of the Alpha Group during the Generico Sell-off Period; provided, however, that such use is in substantially the same manner as prior to the Distribution Time and to the extent that it is used in connection with products and services only for the same products and services in connection with which such use was made by the Generico Parties prior to the Distribution Time and which are of the same quality as the products and services in connection with which the Alpha Trademarks were used prior to the Distribution Time. Notwithstanding the foregoing, the Generico Group may continue to use appropriate Alpha Trademarks in the packaging and labeling of the Generico Products beyond the Generico Sell-off Period to the extent that a Governmental Authorization that is necessary to change the packaging or labeling of any Generico Products has not been obtained. Generico agrees to use commercially reasonable best efforts to obtain such Governmental Authorizations. Subject to the preceding sentences, the Generico Parties agree that, upon termination of the Generico Sell-off Period, the Generico Parties shall and shall cause the other members of the Generico Group to cease and thereafter not make any use of the Alpha Trademarks, except such restriction shall not apply to filings, reports and other documents required by Applicable Laws or regulations of securities exchanges to be filed and/or made publicly available.

(d) The parties agree that, during the period from the Distribution Time until the first anniversary of the Distribution Time (the “Alpha Sell-off Period”), the Alpha Group shall be entitled to continue to use all trademarks or other source identifiers owned by the members of the Generico Group (the “Generico Trademarks”) to the extent that such Generico Trademarks are contained as of the Distribution Date on any product packaging, business cards, schedules, stationery, displays, signs, Promotional Materials, manuals, forms, computer software and other material used in the Alpha Business, without any obligation on the part of the Alpha Parties to pay royalties or similar fees to the Generico Parties during the Alpha Sell-off Period; provided, however, that such use is in substantially the same manner as prior to the Distribution Time and to the extent that it is used in connection with products and services only for the same products and services in connection with which such use was made by the Alpha Parties prior to the Distribution Time and which are of the same quality as the products and services in connection with which the Generico Trademarks were used prior to the Distribution Time. The Alpha Parties agree that, upon termination of the Alpha Sell-off Period, the Alpha Parties shall and shall cause the other members of the Alpha Group to cease and thereafter not make any use of the Generico Trademarks, except such restriction shall not apply to historical references contained in filings, reports and other documents required by Applicable Laws or regulations of securities exchanges to be filed and/or made publicly available.

38

Section 5.03. Subsequent Transfers.

(a) If following the Distribution Time a member of the Generico Group has knowledge that it possesses or has obtained any Alpha Assets, the Generico Parties shall notify the Alpha Parties thereof and shall cause the prompt transfer of such Alpha Assets to the Alpha Parties for no additional consideration (subject toSection 3.01(j)) to the Alpha Parties; provided that in the event such Alpha Asset shall have been sold, transferred, or otherwise disposed of prior to a member of the Generico Group being aware that it is an Alpha Asset, the Alpha Parties shall be entitled to reimbursement from the Generico Group for the fair market value thereof as of the Distribution Date.

(b) If following the Distribution Time a member of the Alpha Group has knowledge that it possesses or has obtained any Generico Assets, the Alpha Parties shall notify the Generico Parties thereof and the Alpha Parties shall cause the prompt transfer of such Generico Assets to the Generico Parties for no additional consideration (subject to Section 3.01(j)(vi) and Section 3.01(m)) to the Generico Parties; provided that in the event such Generico Asset shall have been sold, transferred, or otherwise disposed of prior to a member of the Alpha Group being aware that it is a Generico Asset, the Generico Parties shall be entitled to reimbursement from the Alpha Group for the fair market value thereof as of the Distribution Date.

(c) It is the intention of the parties to this Agreement that (i) the reimbursement by the Generico Group or the Alpha Group of any amount pursuant to this Section 5.03 shall be treated as relating back to the Generico Contribution and the Alpha Contribution as an adjustment to the Assets contributed to Generico in the Generico Contribution and as owned by New Alpha, LLC immediately prior to the Alpha Contribution and (ii) the recipient of any such reimbursement payment be treated as if it sold, transferred, or otherwise disposed of the Alpha Asset or the Generico Asset, as the case may be. The parties to this Agreement shall not take any position inconsistent with such intention before any Tax authority (and the recipient of any such reimbursement will pay the Tax resulting from the sale, transfer or other disposition of the Alpha Assets or the Generico Asset, as the case may be) except to the extent that a final determination (as defined in Section 1313 of the Code) with respect to any of the parties to this Agreement causes any such reimbursement not to be so treated.

Section 5.04. Reporting Cooperation.

The Alpha Parties and their Subsidiaries shall provide reasonable assistance to the Generico Parties in connection with the collection of Information by Gholdco in connection with the preparation of its SEC reports and filings with respect to periods relating the fiscal year in which the Share Distribution occurs or any fiscal year prior thereto, as provided in the Transition Services Agreement. The Generico Parties and their Subsidiaries shall (and the Alpha Parties shall reimburse them for any reasonable out of pocket costs and expenses incurred and payable to third parties in connection therewith) provide reasonable assistance to the Alpha Parties in connection with the collection of Information by New Alpha in connection with the preparation of its SEC reports and filings with respect to periods relating to the fiscal year in which the Share Distribution occurs.

39

Section 5.05. Post-Transaction Actions.

(a) New Alpha, LLC. Gholdco will take such actions as are necessary to obtain approval of its stockholders at its first stockholder meeting after the date hereof to allow New Alpha, LLC to amend its limited liability company agreement to remove the requirement that New Alpha, LLC refrain from taking any action (other than the election or removal of directors or managers, managing members or other members of its board of directors) without approval of Gholdco’s stockholders if such action would have required the approval of the stockholders of New Alpha, LLC if New Alpha, LLC was a corporation subject to the Delaware General Corporation Law (including without limitation by including the proposal in its first proxy statement delivered to shareholders for its first shareholder meeting following the date hereof).

(b) Name Change. Immediately following the completion of the Transactions, Gholdco will take such action as is necessary to change its name to APP Pharmaceuticals, Inc. Following such name change, New Alpha will take such action as is necessary to change its name to “Abraxis Bioscience, Inc.”

ARTICLE VI.

ACCESS TO INFORMATION

Section 6.01. Provision of Corporate Records.

Prior to or as promptly as practicable after the Distribution Time, the Alpha Parties shall deliver to the Generico Parties copies of all minute books and other records of meetings of the Board of Directors (and similar governing entities), committees of the Board of Directors (and similar governing entities) and stockholders of each member of the Generico Group, all corporate books and records and other Data and Records of each member of the Generico Group in the Alpha Parties’ possession and the relevant portions (or copies thereof) of all Data and Records in the possession of a member of the Alpha Group that constitute Generico Assets. From and after the Distribution Time, all such books, records and copies shall be the property of the Generico Parties. Prior to or as promptly as practicable after the Distribution Time, the Generico Parties shall deliver to the Alpha Parties all corporate books and records and other Data and Records of each member of the Alpha Group in the Generico Parties’ possession and the relevant portions (or copies thereof) of all Data and Records in the possession of a member of the Alpha Group that constitute Alpha Assets. From and after the Distribution Date, all such books, records and copies shall be the property of the Alpha Parties.

Section 6.02. Access to Information.

(a) From and after the Distribution Date, the Generico Parties will, and will cause each of their Subsidiaries to, to the extent that such Information has not previously been delivered pursuant to Section 6.01 and to the extent such Information relates to pre-Share Distribution events, facts, circumstances, or occurrences, afford to the Alpha Parties and their Representatives (at the Alpha Parties’ expense) reasonable access and duplicating rights during normal business hours and upon reasonable advance notice to all Information (and personnel or advisors possessing any such Information) within the Generico Parties’ possession or control or in the possession or control of one of their Subsidiaries to the extent relating to the Alpha Parties, any of their Subsidiaries or the Alpha

40

Business, insofar as such access is reasonably required by the Alpha Parties or any of their Subsidiaries, subject to the provisions below regarding Privileged Information. Notwithstanding anything in this Section 6.02(a), the Generico Parties may redact from any Information provided pursuant to this Section 6.02(a) any Information to the extent relating to the Generico Business.

(b) From and after the Distribution Date, the Alpha Parties will, and will cause each of their Subsidiaries to, to the extent that such Information has not previously been delivered pursuant to Section 6.01 and to the extent such Information relates to pre-Share Distribution events, facts, circumstances, or occurrences, afford to the Generico Parties and their Representatives (at the Generico Parties’ expense) reasonable access and duplicating rights during normal business hours and upon reasonable advance notice to all Information (and personnel or advisors possessing any such Information) within the Alpha Parties’ possession or control or in the possession or control of one of their Subsidiaries to the extent relating to the Generico Parties, any of their Subsidiaries or the Generico Business, insofar as such access is reasonably required by the Generico Parties or any of their Subsidiaries, subject to the provisions below regarding Privileged Information. Notwithstanding anything in this Section 6.02(b), the Alpha Parties may redact from any Information provided pursuant to this Section 6.02(b) any Information to the extent relating to the Alpha Business.

(c) Without limiting the foregoing, Information may be requested under this ARTICLE VI for audit, accounting, claims, litigation, insurance, environmental and safety and tax purposes, as well as for purposes of fulfilling disclosure and reporting obligations and for performing this Agreement and the transactions contemplated hereby.

(d) In furtherance of the foregoing:

(i) Each party acknowledges that (A) each of the Generico Parties and the Alpha Parties (and the members of the Generico Group and the Alpha Group, respectively) has or may obtain Privileged Information; (B) there are or may be a number of Proceedings affecting one or more of the members of the Generico Group and the Alpha Group; (C) the parties may have a common legal interest in Proceedings, in the Privileged Information, and in the preservation of the confidential status of the Privileged Information; and (D) each of the Generico Parties and the Alpha Parties intends that the transactions contemplated by the Transaction Agreements and any transfer of Privileged Information in connection therewith shall not operate as a waiver of any potentially applicable privilege.

(ii) Each of the Generico Parties and the Alpha Parties agrees, on behalf of itself and each member of the Group of which it is a member, not to disclose or otherwise waive any privilege attaching to any Privileged Information relating to the business of the other Group without providing prompt written notice to and obtaining the prior written consent of the other, which consent will not be unreasonably withheld, delayed or conditioned. In the event of a disagreement between any member of the Generico Group and/or any member of the Alpha Group concerning the reasonableness of withholding such consent, no disclosure will be made prior to a final, nonappealable resolution of such disagreement by a court of competent jurisdiction.

41

(iii) Upon any member of the Generico Group or any member of the Alpha Group receiving any subpoena or other compulsory disclosure notice from a court, other Governmental Entity or otherwise that requests disclosure of Privileged Information, in each case relating to the business of the other Group, the recipient of the notice will promptly provide to the other party a copy of such notice, the intended response, and all materials or Information relating to the other Group that might be disclosed. In the event of a disagreement as to the intended response or disclosure, unless and until the disagreement is resolved as provided in Section 6.02(d)(ii), the parties will cooperate to assert all defenses to disclosure claimed by either Group, at the cost and expense of the Group claiming such defense to disclosure, and shall not disclose any disputed documents or Information until all legal defenses and claims of privilege have been finally determined.

Section 6.03. Production of Witnesses.

Subject to Section 6.02, after the Distribution Date, each of the Generico Parties and the Alpha Parties will, and will cause each member of the Generico Group and the Alpha Group, respectively, to, make available to the other party and members of such other party’s Group, upon written request and at the cost and expense of the party so requesting, its directors, officers, employees and, to the extent reasonably practicable, agents as witnesses to the extent that any such Person may reasonably be required (giving consideration to business demands of such directors, officers, employees and agents) in connection with any Proceedings or other proceedings in which the requesting party may from time to time be involved, provided that the same shall not unreasonably interfere with the conduct of business by the Group of which the request is made.

Section 6.04. Retention of Records.

Except as otherwise required by law or agreed to by the parties in writing, if any Information relating to the business, Assets or Liabilities of a member of a Group is retained by a member of the other Group, each of the Generico Parties and the Alpha Parties will, and will cause the members of the Group of which it is a member to, retain for the period required by the applicable records retention policy of the Generico Parties in effect from time to time all such Information in such Group’s possession or under its control. In addition, after the expiration of such required retention period, if any member of either Group wishes to destroy or dispose of any such Information, prior to destroying or disposing of any of such Information, (a) the Generico Parties or the Alpha Parties, on behalf of the member of its Group that is proposing to destroy or dispose of any such Information, will provide no less than thirty (30) days’ prior written notice to the other party, specifying in reasonable detail the Information proposed to be destroyed or disposed of, and (b) if, prior to the scheduled date for such destruction or disposal, the recipient of such notice requests in writing that any of the Information proposed to be destroyed or disposed of be delivered to such requesting party, the party whose Group is proposing to destroy or dispose of such Information promptly will arrange for the delivery of the requested Information to a location specified by, and at the expense of, the requesting party.

Section 6.05. Confidentiality.

Subject to the provisions of Section 6.02, which shall govern Privileged Information, for a seven-year period after the Distribution Date, each of the Generico Parties and the Alpha Parties shall hold, and shall use their reasonable best efforts to cause

42

members of their Group and their Representatives to hold, in strict confidence all Information concerning the other party’s Group or any of its operations, employees, Assets or Liabilities, in its possession or control (including Information known to its employees or agents) or furnished to it by such other party’s Group pursuant to the Transaction Agreements or the transactions contemplated thereby and will not use such Information or release or disclose such Information to any other Person, except members of their Group and their Representatives, who will be bound by the provisions of this Section 6.05; provided, however, that any member of the Generico Group or the Alpha Group may disclose such Information to the extent that (a) disclosure is compelled by judicial or administrative process or, in the opinion of such Person’s counsel, by other requirements of law, regulation or listing standard (in which case the party required to make such disclosure will notify the other party as soon as practicable of such obligation or requirement and cooperate with the other party to limit the Information required to be disclosed and to obtain a protective order or other appropriate remedy with respect to the Information ultimately disclosed) or (b) such Person can show that such Information was (i) available to such Person on a nonconfidential basis (other than from a member of the other party’s Group) prior to its disclosure by such Person; (ii) in the public domain through no fault of such Person; or (iii) lawfully acquired by such Person from another source after the time that it was furnished to such Person by the other party’s Group, and not acquired from such source subject to any confidentiality obligation on the part of such source known to the acquiror, or on the part of the acquiror. Each of the parties acknowledges that it will be liable for any breach of this Section 6.05 by their Representatives to whom such Information is disclosed by such party. Notwithstanding the foregoing, each of the Generico Parties and the Alpha Parties will be deemed to have satisfied its obligations under this Section 6.05 with respect to preserving the confidentiality of any Information (other than Privileged Information) if it exercises the same care with regard to such Information as it takes to preserve confidentiality for its own similar Information.

ARTICLE VII.

TERMINATION

Section 7.01. Termination.

This Agreement and all Transaction Agreements may be terminated at any time prior to the Share Distribution by and in the sole discretion of Gholdco without the approval of any other party nor the shareholders of Gholdco.

Section 7.02. Effect of Termination.

In the event of any termination of this Agreement prior to the Distribution Time pursuant to Section 7.01, no party to this Agreement (or any of its directors or officers) shall have any Liability or further obligation to any other party or third party with respect to this Agreement.

43

ARTICLE VIII.

MISCELLANEOUS

Section 8.01. Entire Agreement; Construction.

This Agreement and the Transaction Agreements, including any annexes, schedules and exhibits hereto or thereto, and other agreements and documents referred to herein and therein, will together constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and will supersede all prior negotiations, agreements and understandings of the parties of any nature, whether oral or written, with respect to such subject matter. Notwithstanding any other provisions in the Transaction Agreements to the contrary, in the event and to the extent that there is a conflict between the provisions of this Agreement and the provisions of any Transaction Agreement, the provisions of such Transaction Agreement will control other than with respect to the provisions of ARTICLE III, in which case this Agreement will control.

Section 8.02. Survival of Agreements.

Except as otherwise contemplated by the Transaction Agreements, all covenants and agreements of the parties contained in the Transaction Agreements will remain in full force and effect and survive the Distribution Time.

Section 8.03. Governing Law.

This Agreement will be governed by and construed in accordance with the laws of the State of Delaware (without giving effect to choice of law principles thereof).

Section 8.04. Notices.

All notices and other communications hereunder shall be in writing and shall be deemed duly given (i) on the date of delivery if delivered personally, (ii) upon confirmation of receipt if delivered by facsimile, (iii) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service or (iv) when received if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

(a) if to New Alpha, LLC or to New Alpha, or prior to the Share Distribution, Generico or Gholdco:

Abraxis BioScience, Inc.

11755 Wilshire Boulevard

Suite 2000

Los Angeles, CA 90025

Fax: (310) 883-3138

Attention: General Counsel

44

(b) if to Generico or Gholdco, to:

APP Pharmaceuticals, Inc.,

1501 East Woodfield Road, Suite 300E

Schaumburg, Illinois 60173

Fax: (847) 413-2652

Attention: President

or to such other persons or addresses as may be designated in writing by the party to receive such notice as provided above.

Section 8.05. Expenses.

Except as otherwise provided in this Agreement, the Transaction Agreements or any other agreement between the parties relating to the Debt Financing and Share Distribution, Generico will bear all of the expenses of all of the Generico Parties and the Alpha Parties incurred in connection with the Transactions.

Section 8.06. Consent to Jurisdiction.

Each of the Generico Parties and the Alpha Parties irrevocably agrees that any legal action or proceeding with respect to this Agreement, the transactions contemplated hereby, any provision hereof, the breach, performance, validity or invalidity hereof or for recognition and enforcement of any judgment in respect hereof brought by another party hereto or its successors or permitted assigns may be brought and determined in any federal or state court located in the State of Delaware, and each of the Generico Parties and the Alpha Parties hereby irrevocably submits with regard to any such action or proceeding for themselves and in respect to their property, generally and unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each of the Generico Parties and the Alpha Parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, the transactions contemplated hereby, any provision hereof or the breach, performance, enforcement, validity or invalidity hereof, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to lawfully serve process, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by Applicable Laws, that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper and (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

Section 8.07. Amendments.

This Agreement cannot be amended except by a written agreement executed by the Generico Parties and the Alpha Parties.

45

Section 8.08. Assignment.

No party to this Agreement will (or permit any of the members of its Group to) convey, assign or otherwise transfer any of its rights or obligations under this Agreement, in whole or in part, without the prior written consent of the other parties in their sole and absolute discretion; provided that any of the Generico Parties and the Alpha Parties may assign this Agreement and all of its rights hereunder to its lenders and debt providers for collateral security purposes. Any conveyance, assignment or transfer requiring the prior written consent of the other parties pursuant to this Section 8.08 that is made without such consent will be void ab initio. No assignment of this Agreement will relieve the assigning party of its obligations hereunder. Notwithstanding the foregoing, after the Distribution Date, either party may assign or sublicense any portion or this Agreement and any of its rights hereunder to any purchaser of all or any part of the Generico Assets or Generico Business or the Alpha Assets or the Alpha Business, as the case may be.

Section 8.09. Captions; Currency.

The article, section and paragraph captions herein and the table of contents hereto are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof. Unless otherwise specified, all references herein to numbered articles or sections are to articles and sections of this Agreement and all references herein to schedules are to schedules to this Agreement. Unless otherwise specified, all references contained in this Agreement, in any schedule referred to herein or in any instrument or document delivered pursuant hereto to dollars or “$” shall mean United States Dollars.

Section 8.10. Severability.

If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and will in no way be affected, impaired or invalidated thereby. If the economic or legal substance of the transactions contemplated hereby is affected in any manner adverse to any party as a result thereof, the parties will negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

Section 8.11. Parties in Interest.

This Agreement is binding upon and is for the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement is not made for the benefit of any Person not a party hereto, and no Person other than the parties hereto or their respective successors and permitted assigns will acquire or have any benefit, right, remedy or claim under or by reason of this Agreement.

46

Section 8.12. Schedules.

All schedules attached hereto are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Capitalized terms used in the schedules hereto but not otherwise defined therein will have the respective meanings assigned to such terms in this Agreement.

Section 8.13. Waivers; Remedies.

Any agreement on the part of a party hereto to waive or consent to the performance by the other party of any of its covenants or agreements hereunder shall be valid only if set forth in a written instrument signed on behalf of such party. Any waiver that is made in contravention of this Section 8.13 will be void ab initio. No failure or delay on the part of either the Generico Parties or the Alpha Parties in exercising any right, power or privilege hereunder will operate as a waiver thereof, nor will any waiver on the part of either the Generico Parties or the Alpha Parties of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder, nor will any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

Section 8.14. Further Assurances.

From time to time after the Distribution Date, as and when requested by either party hereto, the other party shall execute and deliver, or cause to be executed and delivered, all such documents and instruments and shall take, or cause to be taken, all such actions as the requesting party may reasonably request to consummate the transactions contemplated by the Transaction Agreements.

Section 8.15. Counterparts.

This Agreement may be executed in separate counterparts (including by facsimile or electronic delivery), each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement.

Section 8.16. Performance.

The Generico Parties will cause to be performed and hereby guarantee the performance of all actions, agreements and obligations set forth herein to be performed by any of their Subsidiaries. The Alpha Parties will cause to be performed and hereby guarantee the performance of all actions, agreements and obligations set forth herein to be performed by any of their Subsidiaries.

Section 8.17. Interpretation.

Any reference herein to any federal, state, local or foreign law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. For the purposes of this Agreement, (a) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires, (b) the terms “hereof”, “herein”, “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement and (c) the word “including” and words of similar import when used in this Agreement shall mean “including, without limitation”.

47

Section 8.18. Limited Liability.

Except as expressly provided in the Transaction Agreements and notwithstanding any other provision of this Agreement, no individual who is a director, employee or officer of the Alpha Parties or the Generico Parties, in their capacity as such, shall have any liability in respect of or relating to the covenants or obligations of such parties under this Agreement or any Transaction Agreement or in respect of any certificate delivered with respect hereto or thereto and, to the fullest extent legally permissible, each of the Alpha Parties and the Generico Parties, for itself and its stockholders, directors, employees, officers and Affiliates, waives and agrees not to seek to assert or enforce any such liability that any such Person otherwise might have pursuant to Applicable Law.

Section 8.19. Enforcement.

The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. It is accordingly agreed that the parties shall be entitled to pursue specific performance of the terms hereof, this being in addition to any other remedy to which they are entitled at law or in equity.

Section 8.20. Mutual Drafting.

This Agreement and the Transaction Agreements shall be deemed to be the joint work product of the Generico Parties and the Alpha Parties and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

48

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.

APP PHARMACEUTICALS, INC. (f/k/a GENERICO HOLDINGS, INC.)
By:	/s/ Patrick Soon-Shiong
Name:	Patrick Soon-Shiong
Title:	CEO
APP PHARMACEUTICALS, LLC
By:	/s/ Patrick Soon-Shiong
Name:	Patrick Soon-Shiong
Title:	CEO
ABRAXIS BIOSCIENCE, LLC
By:	/s/ Patrick Soon-Shiong
Name:	Patrick Soon-Shiong
Title:	CEO
NEW ABRAXIS, INC.
By:	/s/ Patrick Soon-Shiong
Name:	Patrick Soon-Shiong
Title:	CEO

EX-4.2

Exhibit 4.2

[FACE OF CERTIFICATE]

API

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

[LOGO]

CUSIP 00202H 10 8

SEE REVERSE FOR CERTAIN DEFINITIONS

This Certifies that

is the record holder of

FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, $0.001 PAR VALUE, OF

APP Pharmaceuticals, Inc.

transferable on the books of the Corporation by the holder hereof in person or by duly authorized attorney upon surrender of this certificate properly endorsed. This certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar.

WITNESS the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers.

Dated:

[SIGNATURE]

CHIEF FINANCIAL OFFICER

[SEAL]

[SIGNATURE]

CHIEF EXECUTIVE OFFICER & CHAIRMAN

COUNTERSIGNED AND REGISTERED:

AMERICAN STOCK TRANSFER & TRUST COMPANY

(NEW YORK, NEW YORK)

TRANSFER AGENT AND REGISTRAR

BY

AUTHORIZED OFFICER

[REVERSE OF CERTIFICATE]

The Corporation shall furnish without charge to each stockholder who so requests a statement of the powers, designations, preferences and relative, participating, optional, or other special rights of each class of stock of the Corporation or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Such requests shall be made to the Corporation’s Secretary at the principal office of the Corporation.

The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM — as tenants in common

TEN ENT — as tenants by the entireties

JT TEN — as joint tenants with right of

survivorship and not as tenants

in common

UNIF GIFT MIN ACT —		Custodian
	(Cust)		(Minor)
under Uniform Gifts to Minors

Act
	(State)

UNIF TRF MIN ACT —		Custodian (until age            )
	(Cust)
	under Uniform Transfers
(Minor)

to Minors Act
	(State)

Additional abbreviations may also be used though not in the above list.

For Value Received,                                          hereby sell(s), assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

Shares of the common stock represented by the within certificate, and do hereby irrevocably constitute and appoint

Attorney to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.

Dated

X

X

NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE

WHATEVER.

Signature(s) Guaranteed

By

THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

EX-10.2

Exhibit 10.2

EXECUTION COPY

TAX ALLOCATION AGREEMENT

TAX ALLOCATION AGREEMENT (this “Agreement”), dated as of November 13^th, 2007, among APP Pharmaceuticals, Inc. (f/k/a Generico Holdings, Inc.), a Delaware corporation (“Gholdco”), APP Pharmaceuticals, LLC, a Delaware limited liability company (“Generico”) (Gholdco and Generico, collectively, the “Generico Parties”), New Abraxis, Inc., a Delaware corporation (to be renamed Abraxis BioScience, Inc.) (“New Alpha”), and Abraxis BioScience, LLC, a Delaware limited liability company (“New Alpha, LLC”) (New Alpha and New Alpha, LLC, collectively, the “Alpha Parties”).

RECITALS

WHEREAS, prior to the Alpha Merger (as defined below), the corporation formerly known as Abraxis BioScience, Inc. (“Alpha”) was the common parent of an affiliated group of corporations within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended (the “Code”), which currently files consolidated federal Income Tax Returns (the “Affiliated Group”);

WHEREAS, on the date hereof, Alpha merged (the “Alpha Merger”) with and into New Alpha, LLC, whereby each issued and outstanding share of common stock, $0.001 par value per share, of Alpha (other than shares held by Alpha in treasury) was converted into one share of common stock, par value $0.001 per share, of Gholdco (the “Gholdco Common Stock”), with New Alpha, LLC being the surviving entity in the Alpha Merger and all of its membership interests held by Gholdco;

WHEREAS, as a consequence of the Alpha Merger, Alpha ceased to exist and Gholdco became the common parent of the Affiliated Group;

WHEREAS, pursuant to the Separation Agreement dated as of the date hereof between the Generico Parties and the Alpha Parties (as may be amended from time to time in accordance with its terms, the “Separation Agreement”), Gholdco will distribute to its stockholders on a pro rata basis, all of the issued and outstanding shares of New Alpha common stock (“New Alpha Common Stock”) (as described more fully in the Separation Agreement, the “Share Distribution”) and New Alpha will change its name to Abraxis BioScience, Inc.;

WHEREAS, in connection with the transactions contemplated by the Separation Agreement, one or more of the Generico Group members will incur an aggregate of up to $1.0 billion of indebtedness, the “Debt Financing”;

WHEREAS, the parties to this Agreement intend that (i) the Alpha Merger will qualify as a tax-free reorganization within the meaning of Section 368(a)(1)(F) of the Code, (ii) following the Alpha Merger, Gholdco, as the “successor” to Alpha for Tax purposes, became the common parent of the Affiliated Group; (iii) the New Alpha Contribution and the Cash Contribution followed by the Share Distribution will qualify as a tax-free reorganization within the meaning of Section 368(a)(1)(D) of the Code; and (iv) the Share Distribution will qualify as a distribution eligible for nonrecognition under Sections 355(a) and 361(c) of the Code;

1

WHEREAS, after the Distribution Date (as defined in the Separation Agreement), neither New Alpha, New Alpha, LLC nor any of the Alpha Subsidiaries (as hereinafter defined) will be a member of the Affiliated Group for federal income tax purposes, at all times from its formation through the Distribution Date, New Alpha, LLC will be disregarded as an entity separate from New Alpha for U.S. federal income tax purposes, and at all times from its formation through the Distribution Date, Generico will be disregarded as an entity separate from New Alpha or Gholdco for U.S. federal income tax purposes;

WHEREAS, after the Share Distribution the Affiliated Group shall continue and Gholdco shall be treated as the common parent of the Affiliated Group for federal income tax purposes; and

WHEREAS, the Generico Group and the Alpha Group (as hereinafter defined) desire on behalf of themselves and their successors to set forth their rights and obligations with respect to Taxes due for periods before, on and after the Distribution Date.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. General. Capitalized terms used in this Agreement have the meanings set forth in this Agreement, or, when not so defined, in the Separation Agreement. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“Affiliate” has the meaning set forth in the Separation Agreement.

“Affiliated Group” has the meaning set forth in the first recital.

“Agreement” means this Tax Allocation Agreement as the same may be amended from time to time.

“Alpha” has the meaning set forth in the first recital.

“Alpha Business” has the meaning set forth in the Separation Agreement.

“Alpha Group” means New Alpha, New Alpha, LLC and the Alpha Subsidiaries.

“Alpha Indemnified Parties” has the meaning set forth in the Separation Agreement.

2

“Alpha Merger” has the meaning set forth in the second recital.

“Alpha Parties” has the meaning set forth in the preamble.

“Alpha Separate Group Basis” means, in the case of any Covered Group Return, the amount of Covered Group Taxes for such Covered Group Return that would have been due if the underlying Covered Group conducted solely the Alpha Business and did not conduct the Generico Business and was computed (i) by taking into account elections and accounting methods actually used in computing the Covered Group Taxes for such Covered Group Return and (ii) with such other adjustments as are contemplated by this Agreement.

“Alpha Subsidiary” means each direct and indirect Subsidiary of Alpha immediately after the Distribution.

“Alpha Taxes” means all Taxes to the extent related to the Alpha Business. The amount of Alpha Taxes for the 2007 taxable year shall be deemed to be zero.

“Claim” has the meaning set forth in Section 3.03.

“Code” has the meaning set forth in the first recital.

“Combined Return” has the meaning set forth in Section 2.14.

“Controlling Party” means the party described as the Controlling Party in accordance with Section 3.01.

“Covered Group” means, the group of Persons that join in the filing of a Covered Group Return.

“Covered Group Return” means any Tax Return (including any consolidated, combined, or unitary Tax Return) that includes both Alpha Taxes and Generico Taxes for a period that ends prior to or includes the Distribution Date.

“Covered Group Taxes” means any Taxes reportable on a Covered Group Return.

“Debt Financing” has the meaning set forth in the fifth recital.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Filing Party” has the meaning set forth in Section 2.09.

“Final Determination” means with respect to any issue (a) a decision, judgment, decree or other order by any court of competent jurisdiction, which decision, judgment, decree or other order has become final and not subject to further appeal, (b) a closing agreement (whether or not entered into under Section 7121 of the Code) or any other binding settlement agreement (whether or not with the IRS) entered into in connection with or in contemplation of an administrative or judicial proceeding, (c) the completion of the highest level of administrative proceedings if a judicial contest is not or is no longer available, or (d) any other final disposition, including by reason of the expiration of the applicable statute of limitations.

3

“Generico” has the meaning set forth in the preamble.

“Generico Business” has the meaning set forth in the Separation Agreement.

“Generico Group” means Gholdco, Generico and the Generico Subsidiaries.

“Generico Indemnified Parties” has the meaning set forth in the Separation Agreement.

“Generico Parties” has the meaning set forth in the preamble.

“Generico Subsidiary” means each direct and indirect Subsidiary of Generico other than a member of the Alpha Group.

“Generico Tainting Act” means:

(a) any action (or failure to take any reasonably available action) after the Distribution Date by any of the Generico Parties or any Affiliate of the Generico Parties other than an action contemplated by any of the Transaction Agreements;

(b) any acquisition or other transaction involving the equity of any member of the Generico Group (other than the distribution of the New Alpha Common Stock in the Share Distribution); or

(c) any Prohibited Act performed by any of the Generico Parties or any Affiliate of the Generico Parties;

“Generico Taxes” means all Taxes to the extent related to the Generico Business.

“Gholdco” has the meaning set forth in the preamble.

“Gholdco Common Stock” has the meaning set forth in the second recital.

“Governmental Entity” has the meaning set forth in the Separation Agreement.

“Income Tax” means any Tax measured by or imposed on or in lieu of net income.

“Income Tax Return” means any Tax Return relating to Income Taxes.

“Indemnifiable Losses” has the meaning set forth in the Separation Agreement.

“Indemnified Parties” has the meaning set forth in Section 3.02(b).

4

“Independent Firm” has the meaning set forth in Article VI.

“IRS” means the United States Internal Revenue Service.

“Liable Party” has the meaning set forth in Section 2.09.

“New Alpha” has the meaning set forth in the preamble.

“New Alpha Common Stock” has the meaning set forth in the fourth recital.

“New Alpha, LLC” has the meaning set forth in the preamble.

“Person” has the meaning set forth in the Separation Agreement.

“Post-Distribution Period” means any Taxable year or other Taxable period beginning after the Distribution Date and, in the case of any Taxable year or other Taxable period that begins on or before and ends after the Distribution Date, that part of the Taxable year or other Taxable period that begins at the beginning of the day after the Distribution Date.

“Pre-Distribution Period” means any Taxable year or other Taxable period that ends on or before the close of the Distribution Date and, in the case of any Taxable year or other Taxable period that begins on or before and ends after the Distribution Date, that part of the Taxable year or other Taxable period through the close of the Distribution Date.

“Prior Payments” means, for any type of Tax Return and any Taxable year, all payments previously made to a Governmental Entity in respect of such Tax Return for such Taxable year and the amount of any overpayment for a prior Taxable period that is creditable against the liability reportable on such Tax Return for such Taxable year.

“Private Letter Ruling” has the meaning set forth in the Separation Agreement.

“Prohibited Acts” has the meaning specified in Section 4.02(a).

“Restricted Period” has the meaning specified in Section 4.02(a).

“Restructuring Taxes” means any Taxes (and other liabilities, including, without limitation, liability to stockholders and the costs of defending against the imposition of such Taxes and other liabilities) of any member of the Generico Group or the Alpha Group arising from or attributable to one or more of the Transactions, including but not limited to (a) any failure of the Share Distribution to constitute a tax-free distribution under Section 355 and Section 368(a)(1)(D) of the Code, or (b) any failure of any stock of New Alpha to qualify as “qualified property” within the meaning of Section 355(c)(2) or Section 361(c)(2) of the Code because of the application of Section 355(d) or Section 355(e) of the Code to the Share Distribution.

5

“Ruling Request” means the ruling request and any other materials (including the attachments and supplemental submissions to the IRS) delivered or deliverable by the Alpha Parties and others in connection with the issuance by the IRS of the Private Letter Ruling.

“Separation Agreement” has the meaning set forth in the fourth recital.

“Share Distribution” has the meaning set forth in the fourth recital.

“Straddle Period” has the meaning set forth in Section 2.05.

“Subsidiary” means, when used with respect to any Person, any corporation or other organization, whether incorporated or unincorporated, at least a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries.

“Tax” (and, with correlative meaning, “Taxes” and “Taxable”) has the meaning set forth in the Separation Agreement.

“Tax Carryover Attribute” has the meaning specified in Section 2.08.

“Tax Liability Issue” has the meaning set forth in Section 3.02(b).

“Tax Return” means any return, report or similar statement filed or required to be filed with respect to any Tax (including any attached schedules), including, without limitation, any information return, claim for refund, amended return or declaration of estimated Tax.

“Transaction Taxes” has the meaning set forth in Section 2.04(b).

ARTICLE II

TAX RETURNS, TAX PAYMENTS AND TAX SHARING OBLIGATIONS

SECTION 2.01. Obligations to File Tax Returns.

(a) Gholdco shall prepare and timely file or cause to be timely filed all Tax Returns with respect to any member of the Alpha Group or the Generico Group that are due (after taking into account any extensions properly filed) before the Distribution Date.

(b) From and after the Distribution Date, Gholdco shall prepare and timely file or cause to be timely filed (i) all Covered Group Returns and (ii) any Tax Returns that relate solely to the Generico Business (including all Income Tax Returns with respect to one or more members of the Generico Group that do not include any members of the Alpha Group).

6

(c) From and after the Distribution Date, New Alpha shall prepare and timely file or cause to be timely filed any Tax Returns that relate solely to the Alpha Business (including all Income Tax Returns with respect to one or more members of the Alpha Group that do not include any members of the Generico Group).

(d) All Covered Group Returns and all other Tax Returns relating to (i) any member of the Generico Group for Taxable years or periods ending on or before or including the Distribution Date and (ii) any member of the Alpha Group that are required to be filed by Gholdco pursuant to this Agreement, shall (to the extent permitted by Applicable Laws) be prepared on a basis consistent with the elections, methods of accounting, positions, conventions and principles of taxation and the manner in which any Tax item or other information is reported as reflected in comparable Tax Returns filed before the date of this Agreement, provided that a different method can be used (x) if it would not materially increase Taxes for which the Alpha Group would be responsible under this Agreement or (y) with the prior written consent of New Alpha (such consent not to be unreasonably withheld). The preceding sentence shall not apply to the extent (i) otherwise contemplated or required by the Ruling Request or Private Letter Ruling, or (ii) necessary to comply with any change in Applicable Laws. Consent shall not be considered unreasonably withheld within the meaning of the second preceding sentence if such different method would increase Taxes for which the Alpha Parties would be responsible under this Agreement and for which Gholdco does not compensate the Alpha Parties. Gholdco shall (A) make available to New Alpha any Tax Return it is responsible for filing pursuant to Section 2.01(a) at least 30 calendar days prior to filing, provided that New Alpha shall supply Gholdco with all information regarding any member of the Alpha Group necessary for preparing such Return at least 90 calendar days prior to the due date (taking into account any available extensions) for filing such Return, and (B) make reasonable revisions to any such Tax Return that are requested by New Alpha.

(e) Gholdco, New Alpha, or Alpha, as the case may be, shall bear 100% of out-of-pocket costs, including accountants’ and attorneys’ fees, incurred in preparing any Tax Returns it is responsible for preparing and filing under Section 2.01.

SECTION 2.02. Obligation to Remit Taxes. Gholdco and New Alpha shall each timely remit or cause to be timely remitted any Taxes due in respect of any Tax Return it is required to file or cause to be filed pursuant to Section 2.01.

SECTION 2.03. Tax Indemnity; Prior Agreements; Refunds.

(a) From and after the Distribution Date, the Alpha Parties shall indemnify, defend, and hold harmless the Generico Indemnified Parties from and against, any and all Indemnifiable Losses incurred or suffered by one or more of the Generico Indemnified Parties in connection with, relating to, arising out of, or due to, directly or indirectly, (i) any Alpha Taxes (including, for the avoidance of doubt, any Alpha Taxes arising from a redetermination thereof from an audit or examination of a Pre-Distribution Period or Straddle Period);

7

and (ii) any amount for which New Alpha is liable under Section 2.04. Any amount payable by the Alpha Parties to the Generico Parties with respect to any Tax pursuant to this Section 2.03(a) shall be reduced by any direct or indirect payments made by the Alpha Parties or any Alpha Affiliate with respect to such Tax after the Distribution Date to any Generico Indemnified Party and by any Prior Payments made by or on behalf of the Alpha Parties. The portion of a Prior Payment that is deemed to be on behalf of the Alpha Parties shall be the portion which bears the same proportion to the Prior Payment as the portion of Covered Group Taxes to which the Prior Payment relates that constitute Alpha Taxes bears to the amount of Covered Group Taxes to which the Prior Payment relates for the taxable year. As an example, if the amount of notional Taxes that constitute Alpha Taxes for the period beginning on January 1, 2007 and ending on the Distribution Date was $20X and the amount of notional Taxes that constitute Generico Taxes for the same period was $30X, then 40 percent of any estimated Tax payments made with respect to that period shall be deemed to have been made on behalf of the Alpha Parties.

(b) From and after the Distribution Date, the Generico Parties shall indemnify, defend, and hold harmless the Alpha Indemnified Parties from and against, any and all Indemnifiable Losses incurred or suffered by one or more of the Alpha Indemnified Parties in connection with, relating to, arising out of, or due to, directly or indirectly, (i) any Generico Taxes (including, for the avoidance of doubt, any Generico Taxes arising from a redetermination thereof from an audit or examination of a Pre-Distribution Period or Straddle Period); and (ii) any amount for which Gholdco is liable under Section 2.04. Any amount payable by the Generico Parties to the Alpha Parties with respect to any Tax pursuant to this Section 2.03(b) shall be reduced by any direct or indirect payments made by the Generico Parties or any Generico Affiliate with respect to such Tax after the Distribution Date to any Alpha Indemnified Party and by any Prior Payments made on behalf of the Generico Parties. The portion of a Prior Payment that is deemed to be on behalf of the Generico Parties shall be the portion which bears the same proportion to the Prior Payment as the portion of Covered Group Taxes to which the Prior Payment relates that constitute Generico Taxes bears to the amount of Covered Group Taxes to which the Prior Payment relates for the taxable year.

(c) Any and all prior Tax sharing agreements or practices between the Generico Parties or any Gholdco Subsidiary, on the one hand, and the Alpha Parties or any Alpha Subsidiary, on the other hand, shall automatically be terminated as of the Distribution Date (other than any such agreements set forth in the Transaction Agreements).

(d) From and after the Distribution Date, New Alpha shall be entitled to any refund of or credit for Alpha Taxes, provided that the Generico Parties shall be entitled to receive and retain any refund of Taxes to the extent such refund is attributable to a Tax Carryover Attribute relating to the Generico Business. From and after the Distribution Date, Gholdco shall be entitled to any refund of or credit for Generico Taxes.

8

SECTION 2.04. Restructuring Taxes; Other Taxes Relating to the Share Distribution.

(a) Except as otherwise provided in Section 4.02(c) and in the next sentence of this Section 2.04(a), the Alpha Parties shall be liable for 100% of any Restructuring Taxes. The Generico Parties shall be liable for any Restructuring Taxes that are imposed as a result of a Generico Tainting Act.

(b) Notwithstanding Section 2.04(a), the Generico Parties shall be liable for 50% and the Alpha Parties shall be liable for 50% of any sales, transfer, value added or other similar Taxes or fees (including all real estate, transfer Taxes, real estate recording fees, patent, copyright, and trademark recording fees and similar items relating to patents, copyrights and trademarks, but excluding Restructuring Taxes) payable in connection with the transactions contemplated by the Separation Agreement (the “Transaction Taxes”). The parties agree to timely sign and deliver such certificates or forms as are requested by the other party and may be necessary or appropriate to enable such party to file promptly and timely the Tax Returns for such Transaction Taxes with the appropriate Taxing authorities and remit payment of the Transaction Taxes.

SECTION 2.05. Straddle Periods.

(a) The portion of any Covered Group Taxes constituting Alpha Taxes shall be computed on an Alpha Separate Group Basis. The remaining portion of any Covered Group Taxes shall constitute Generico Taxes.

(b) Any Tax (including escheat liability) other than Covered Group Taxes (which Taxes are addressed in Section 2.05(a) above) shall constitute (i) an Alpha Tax to the extent it relates to the Alpha Business (including any Tax relating to the Alpha Business attributable to a Pre-Distribution Period for which Gholdco is liable as the “successor” to Alpha for Tax purposes) and (ii) a Generico Tax to the extent it relates to the Generico Business.

SECTION 2.06. Pre-Closing vs. Post Closing Issues.

(a) Notwithstanding any other provision of this Agreement, any amount arising by virtue of (i) the exercise after the Distribution Date of any compensatory option to acquire New Alpha Common Stock or Gholdco Common Stock or (ii) the vesting after the Distribution Date of any restricted stock units in New Alpha or Gholdco shall be deductible by Gholdco, if the holder of such option or restricted stock unit was employed by Gholdco or a subsidiary of Gholdco from the date such option or restricted stock unit was granted through the date of exercise or vesting, as applicable, and deductible by New Alpha, if the holder of such option or restricted stock unit was employed by New Alpha or a subsidiary of New Alpha from the date such option or restricted stock unit was granted through the date of exercise or vesting, as applicable, in each case except as otherwise determined by the IRS in the Private Letter Ruling or a Final Determination.

9

(b) To the extent required by Applicable Laws, the Taxable year of each member of the Alpha Group shall close at the close of the Distribution Date and the Taxable income of such year for Income Tax purposes shall be computed taking into account the principles of Treasury Regulation Section 1.1502-76(b) or of a corresponding provision under the laws of an applicable state, local, municipal or foreign jurisdiction, except that no “ratable allocation election” for extraordinary items as defined thereunder will be made.

SECTION 2.07. Tax Attributes.

(a) Tax benefit carryforwards to Post-Distribution Periods, including net operating loss carryforwards, net capital loss carryforwards, foreign Tax credit carryforwards and research and development credit carryforwards shall be computed and allocated between the Alpha Business and the Generico Business based on the group that generated such item, except to the extent otherwise provided under Applicable Laws. To the extent that a Tax benefit relates to the Alpha Business but cannot as a matter of law be so allocated, the amount of such Tax benefit shall reduce any payment obligation of the Alpha Parties under this Agreement. To the extent that the amount of any such Tax benefit exceeds any payment obligation of the Alpha Parties under this Agreement, the Generico Parties shall pay the amount of such excess to the Alpha Parties when a benefit from such Tax benefit is realized.

(b) The allocation of earnings and profits between Gholdco and the Alpha Parties shall be reasonably determined by New Alpha pursuant to Section 312(h) of the Code and the Treasury Regulations promulgated thereunder within six months of the Distribution Date.

SECTION 2.08. Carryback Provisions. Unless the parties otherwise agree in writing, the Alpha Parties and the Generico Parties shall elect and shall cause each of the Alpha Subsidiaries or Generico Subsidiaries to elect, where permitted by Applicable Laws, to carry forward any loss, credit or similar Tax attribute arising in a Post-Distribution Period, with respect to a Covered Group Return (“Tax Carryover Attribute”) that could, in the absence of such election, be carried back to a Pre-Distribution Period. Any refund or credit of Taxes resulting from the required carryback to a Covered Group Return of any Tax Carryover Attribute attributable to the Alpha Business arising in a Post-Distribution Period shall be for the account and benefit of New Alpha; provided, however, that Gholdco shall only be required to pay such amount to New Alpha at the time such amount is actually realized in cash, credit, refund or offset by the Generico Group after taking into account (i) all other Tax attributes of the Affiliated Group and (ii) any carryback of any Tax Carryover Attribute attributable to the Generico Business. Any refund, credit or offset of Taxes resulting from the carryback of any Tax Carryover Attribute attributable to the Generico Business arising in a Post-Distribution Period shall be for the account and benefit of Gholdco. If a member of the Alpha Group recognizes a Tax Carryover Attribute that, under Applicable Laws, must be

10

carried back to a Pre-Distribution Period during which Alpha or any Alpha Subsidiary joined in filing a Tax Return on a consolidated, combined, or unitary basis with one or more of Gholdco, Generico or any Gholdco Subsidiary, Gholdco shall, at the expense of New Alpha, file appropriate refund claims within a reasonable period after being requested by New Alpha to do so, unless such filing shall materially adversely affect the liability or any attributes of the Generico Parties or any of their Affiliates under this Agreement (including the ability of any member of the Generico Group to carry back a Tax attribute), in which case such filing shall be subject to Gholdco’s prior written consent (such consent not to be unreasonably withheld). If a refund claim for which the Alpha Parties have received payment from the Generico Parties is subsequently disallowed by the relevant Governmental Entity, the Alpha Parties shall promptly return such payment to the Generico Parties together with any interest, penalties and additions to Tax resulting from such disallowance.

SECTION 2.09. General Tax Payments. With respect to any Taxes for which one party (the “Liable Party”) is liable under Article II and that are to be remitted in connection with Tax Returns to be filed by the other party (the “Filing Party”) after the Distribution Date, the Liable Party shall make any payment of estimated Taxes no later than the fifth day after receipt of written request (but not before the fifth date preceding the due date for such payment) from the Filing Party setting forth the Filing Party’s good faith estimate of the Liable Party’s portion of the estimated Taxes to be remitted. Promptly after the date that the Tax Return for the Taxable period is due (including extensions), the Filing Party shall provide a written request to the Liable Party describing in reasonable detail the amount of any true-up payment owed to the Filing Party and to be made by the Liable Party or any true-up payment owed by the Filing Party to the Liable Party as a result of an overpayment by the Liable Party. A true-up payment shall be made no later than fifteen (15) days after receipt of the written request for the true-up payment.

SECTION 2.10. Other Payments. Other payments due to a party under Article II shall be due (a) in the case of the receipt or crediting of a refund, five (5) days after such receipt or crediting and (b) in the case of a Final Determination, or the completion of an audit, assessment or examination or similar event, two (2) days prior to the date payment is to be made to the Governmental Entity. In the case of a delay in payment, the party required to have made payment shall pay interest to the other party at a rate equal to the prime rate of Citibank, N.A. in effect on the date such payment was required to be made plus 2%.

SECTION 2.11. Payment Failures. If any party required to make a payment hereunder fails to make such payment when required by this Agreement (or, if no required time period is specified, within 10 Business Days of written request by the party to whom the payment is due), the amount due shall bear interest at a rate equal to the prime rate of Citibank, N.A. in effect on the date such payment was required to be made plus 2%.

11

SECTION 2.12. Notice. Gholdco and New Alpha shall give each other prompt written notice of any payment that may be due under this Agreement, provided that any failure to notify shall not cause any party to forfeit substantive rights, except to the extent the other party is materially prejudiced thereby. Any payment that may be due under this Agreement is to be made by wire transfer of immediately available funds to the account designated by Gholdco or New Alpha in such notice or by any other method as shall be agreed upon by Gholdco and New Alpha.

SECTION 2.13. Amended Tax Returns. From and after the Distribution Date, the Generico Parties shall not, and shall not permit any of their Affiliates to, file any amended Tax Return for any Pre-Distribution Period or Straddle Period without the prior written consent of New Alpha (such consent not to be unreasonably withheld) unless such amended Tax Return does not materially adversely affect the liability or any attributes of the Alpha Parties or any of their Affiliates under this Agreement or the Separation Agreement (including the ability of New Alpha to carry back a Tax Carryover Attribute in accordance with Section 2.08).

SECTION 2.14. Combined Tax Returns. From and after the Distribution Date, if the Generico Parties and the Alpha Parties shall be required to file a combined Tax Return in California (a “Combined Return”), (i) Gholdco shall prepare and timely file or cause to be timely filed such Combined Return; (ii) Gholdco shall timely remit or cause to be timely remitted any Taxes due in respect of such Combined Return; and (iii) the respective liability of each of the parties with respect to the Taxes due in respect of such Combined Return shall be determined in accordance with Cal. Code Regs., tit. 18, § 25106.5. The amount of the respective liability of the Alpha Parties shall be Alpha Taxes and the amount of the respective liability of the Generico Parties shall be Generico Taxes.

SECTION 2.15. Option Deductions.

(a) Except as otherwise required by law, upon the exercise of any option to purchase New Alpha stock from New Alpha, New Alpha shall claim any Tax deduction attributable to such exercise on its Tax Returns and no member of the Generico Group shall claim such deduction on its Tax Returns. Except as otherwise required by law, upon the exercise of any option to purchase Gholdco stock from Gholdco, Gholdco shall claim any Tax deduction attributable to such exercise on its Tax Returns no member of the Alpha Group shall claim such deduction on its Tax Returns.

(b) Section 2.15(a) shall apply mutatis mutandis to other equity-based compensation, including restricted stock.

12

ARTICLE III

TAX AUDITS

SECTION 3.01. Controlling Party. Except as otherwise provided in this Agreement, Gholdco shall be the Controlling Party with respect to any Covered Group Tax relating to the Generico Business and New Alpha shall be the Controlling Party for any Covered Group Taxes relating to the Alpha Business. The Controlling Party with respect to any Covered Group Tax shall have the right to control the conduct and disposition of all audits or other proceedings with respect to such Covered Group Tax, provided that New Alpha shall (subject to the other provisions of this Agreement) have the right to conduct and lead any audit or other proceedings relating to any Restructuring Taxes, unless such Restructuring Taxes are imposed as a result of a Generico Tainting Act, in which case the Alpha Parties and the Generico Parties shall jointly control the conduct and disposition of any audit or other proceedings with respect to such Restructuring Taxes, at the expense of the Generico Parties.

SECTION 3.02. Tax Contest Procedures. The Controlling Party shall have the right, in the Controlling Party’s reasonable discretion, to resolve, settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with or as a result of any Tax controversy, including (without limitation) any audit, protest, or claim for refund, competent authority proceeding and litigation in Tax Court or any other court of competent jurisdiction (a “Tax Controversy”), with respect to any Taxes for which the Controlling Party is responsible as set forth in Section 3.01. Such control rights shall extend to any matter pertaining to the management and control of a Tax Controversy, including execution of waivers, choice of forum, scheduling of conferences and the resolution of any Tax Item and the non-Controlling Party shall issue to the Controlling Party any powers of attorney or consents as are necessary to permit the Controlling Party to exercise such rights. Any costs incurred in the handling or contesting of a Tax Controversy shall be borne by the Controlling Party.

ARTICLE IV

COOPERATION

The following provisions shall apply from and after the Distribution Date.

SECTION 4.01. Inconsistent Actions. Each party hereto agrees to, and to cause each of its Affiliates to, (a) report the Alpha Merger as a tax-free reorganization within the meaning of Section 368(a)(1)(F) of the Code, the Alpha Contribution followed by the Share Distribution as a tax-free reorganization within the meaning of Section 368(a)(1)(D) of the Code, and the Share Distribution as a distribution qualifying for nonrecognition under Sections 355(a) and 361(c) of the Code on all Tax Returns and other filings, (b) comply with and take no action inconsistent with the representations and covenants provided to the IRS in connection with obtaining the Private Letter Ruling, and (c) for the Restricted Period, not fail to be engaged in the conduct of the active trade or businesses relied upon for purposes of satisfying the requirements of Section 355(b) of the Code for purposes of the Private Letter Ruling. For all Post-Distribution Periods, each party to this Agreement agrees to, and to cause each of its Affiliates to, in the absence of a controlling change in Applicable Laws or circumstances, report on all Tax Returns the Tax consequences of the transactions undertaken pursuant to the Transaction Agreements in accordance with the positions taken with respect to such transactions to the extent reported on Covered Group Returns filed in respect of such transactions.

13

SECTION 4.02. Prohibited Acts.

(a) For 24 months following the Distribution Date (the “Restricted Period”), each of the Generico Parties and their Affiliates, on the one hand, and each of the Alpha Parties and its Affiliates, on the other hand, agree that they will not (i) redeem or otherwise repurchase any capital stock of Gholdco or New Alpha other than pursuant to open market stock repurchase programs meeting the requirements of Section 4.05(1)(b) of Rev. Proc. 96-30, 1996-1 C.B. 696, or (ii) enter into any agreements or arrangements with respect to transactions or events (including, but not limited to, capital contributions or acquisitions, entering into any partnership or joint venture arrangements, stock issuances, stock acquisitions, option grants, or a series of such transactions or events (but excluding the Share Distribution)), in the case of each of clauses (i) and (ii) above that, if considered part of a plan that includes the Share Distribution would result in one or more Persons acquiring, directly or indirectly, stock of Gholdco or New Alpha representing a “50-percent or greater interest” therein within the meaning of Section 355(d)(4) of the Code (any act inconsistent with the acts described in Section 4.01 hereof and any act described in clauses (i) and (ii) above, collectively, the “Prohibited Acts”). Notwithstanding the foregoing, the following shall not be considered a Prohibited Act: (v) the issuance of any compensatory options by Gholdco, (w) the issuance of any Gholdco stock pursuant to any Gholdco compensatory option or restricted stock unit, and (x) the repurchase of any Gholdco restricted stock, in each case described in clauses (v), (w) and (x), if such action satisfies the conditions of Treasury Regulation § 1.355-7(d)(8)(i), and (y) the issuance of stock to a retirement plan qualified under Section 401(a) or 403(a) of the Code in a transaction that satisfies the requirements of Treasury Regulation Section 1.355-7(d)(9). For the avoidance of doubt, any issuance of additional equity or rights to acquire new equity by Gholdco to new investors during the Restricted Period shall be considered a Prohibited Act.

(b) Notwithstanding the foregoing, a party may take any of the Prohibited Acts, subject to Section 2.04, if, (i) in the case of the Alpha Parties and their Affiliates, (A) New Alpha first obtains (at its expense) an opinion in form and substance reasonably acceptable to Gholdco of Fried, Frank, Harris, Shriver & Jacobson LLP or another nationally recognized law firm or “big four” accounting firm reasonably acceptable to Gholdco, which opinion may be based on usual and customary factual representations, or (B) at New Alpha’s request, Gholdco (at New Alpha’s expense) obtains a supplemental ruling from the IRS, or, (ii) in the case of Gholdco and its Affiliates, (A) Gholdco first obtains (at its expense) an opinion in form and substance reasonably acceptable to New Alpha of a nationally recognized law firm or “big four” accounting firm reasonably acceptable to New Alpha, which opinion may be based on usual and customary factual representations or (B) Gholdco (at its expense) obtains a supplemental ruling from the IRS, in each case that such Prohibited Act(s), and any transaction related thereto, should not affect (i) the qualification of the Share Distribution under Section 355 and Section 368(a)(1)(D) of the Code and (ii) the nonrecognition of gain to Gholdco in the Share Distribution. A party may also take any of the Prohibited Acts, subject to Section 2.04, with the written consent of the other party in the other party’s sole and absolute discretion. During the Restricted Period, the parties shall provide, and shall cause their respective

14

Affiliates to provide, all information reasonably requested by the other party relating to any transaction involving an acquisition (directly or indirectly) of that party’s stock within the meaning of Section 355(e) of the Code. The parties hereto agree that the payment of monetary compensation would not be an adequate remedy to a breach of the obligations described in the Prohibited Acts, and each party consents to the issuance and entry of an injunction to prevent a breach of the obligations contained in the Prohibited Acts, subject to the waiver and consent described in the preceding sentence. New Alpha represents that, to its knowledge, from the date of this Agreement until the time of the Share Distribution, and except as contemplated by the Transaction Agreements, there will be no agreement, understanding, arrangement or substantial negotiations by Gholdco (or any of its Subsidiaries) concerning any acquisition of Gholdco stock for purposes of applying Treas. Reg. § 1.355-7(d)(3) and an opinion and/or ruling obtained in accordance with Section 4.02(b)(ii) may assume the accuracy of such representation.

(c) Notwithstanding anything in this Agreement to the contrary, a party shall be responsible for, and shall indemnify the other party and hold the other party harmless from, any Restructuring Taxes resulting from any Prohibited Act taken by such party or any of their Affiliates, regardless of whether the exception contained in Section 4.02(b) is satisfied with respect to such act.

SECTION 4.03. Cooperation with Respect to Tax Return Filings, Examinations and Tax Related Controversies. In addition to any obligations imposed pursuant to the Separation Agreement, each party shall fully cooperate with the other party and its representatives, in a prompt and timely manner, in connection with (i) the preparation and filing of and (ii) any inquiry, audit, redetermination, examination, investigation, dispute, or litigation involving, any Tax Return required to be filed by such other party pursuant to this Agreement. Such cooperation shall include, but not be limited to, (A) the execution and delivery to such other party of any power of attorney required to allow such other party and its counsel to participate in or control any inquiry, audit or other administrative proceeding and to assume the defense or prosecution, as the case may be, of any suit, action or proceeding pursuant to the terms of and subject to the conditions set forth in Article III, and (B) making available, during normal business hours, and within 15 days of any written request therefor, all books, records and information, and the assistance of all officers and employees, necessary or useful in connection with the preparation of any Tax return or any Tax inquiry, audit, redetermination, examination, investigation, dispute, litigation or any other matter. Any recoveries by the Generico Parties, the Alpha Parties, or any of their respective Affiliates against third parties (including awards for damages) relating to Restructuring Taxes shall be shared and allocated by the parties consistently with the allocation of the underlying Restructuring Taxes.

15

ARTICLE V

RETENTION OF RECORDS; ACCESS

The Alpha Group and the Generico Group shall retain all Information in accordance with Section 6.04 of the Separation Agreement. At or prior to the Distribution Date, New Alpha shall make available to Gholdco to copy all consolidated, combined and unitary Tax Returns of the Affiliated Group and all notes, workpapers, correspondence and other records related thereto.

ARTICLE VI

DISPUTES

From and after the Distribution Date, if New Alpha and Gholdco cannot agree on the calculation of any liability under this Agreement, or the interpretation or application of any provision under this Agreement, either party may provide to the other party written notice of intent to invoke the dispute resolution procedures of this Article VI. Within 10 days following the receipt of such written notice, New Alpha and Gholdco shall jointly retain a nationally recognized law firm or “big four” accounting firm, which firm is independent of both parties (the “Independent Firm”), to resolve the dispute. If the parties cannot jointly agree on an Independent Firm to resolve the dispute within the 10 day period, then each party shall select a nationally recognized law firm or “big four” accounting firm, which firm is independent of both parties, and both law or accounting firms shall jointly select an Independent Firm which shall make the determination under this Article VI. The Independent Firm shall act as an arbitrator to resolve all points of disagreement and its decision shall be final and binding upon all parties involved. The Independent Firm shall determine the appropriate outcome based upon this Agreement with respect to each disputed item. The Independent Firm shall have 90 days from the date that it is selected in which to make such determinations, unless New Alpha and Gholdco mutually agree on an extension of such period or the Independent Firm, in its discretion, determines that an extension of such period is warranted by exceptional circumstances. New Alpha and Gholdco shall provide the Independent Firm with such information or documentation as the Independent Firm deems in its discretion to be necessary for it to make the determinations requested of it. Any determination by the Independent Firm shall be in writing. Following the decision of the Independent Firm, New Alpha and Gholdco shall each take or cause to be taken any action necessary to implement the decision of the Independent Firm. The fees and expenses relating to the Independent Firm shall be borne by the party that such Independent Firm determines has lost the dispute. Notwithstanding the foregoing, this Article VI shall not apply to any dispute arising under Section 2.04 or 4.02(c) with respect to the respective liability of the parties in the event Restructuring Taxes are imposed.

16

ARTICLE VII

SURVIVAL OF LIABILITIES

Notwithstanding any other provision in this Agreement, any liabilities under this Agreement shall survive for 60 days following any applicable statute of limitation; provided, however, that each party may continue to demand the full amount of payment to be made with respect to any such liabilities under this Agreement and such liabilities shall continue to survive until paid in full in accordance with this Agreement.

ARTICLE VIII

MISCELLANEOUS

SECTION 8.01. Entire Agreement; Construction. This Agreement, the Separation Agreement, and the Ancillary Agreements, including any annexes, schedules and exhibits hereto or thereto, and other agreements and documents referred to herein and therein, will together constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and will supersede all prior negotiations, agreements and understandings of the parties of any nature, whether oral or written, with respect to such subject matter. Notwithstanding any other provisions in this Agreement to the contrary, in the event and to the extent that there is a conflict relating to Taxes between the provisions of this Agreement and the provisions of the Separation Agreement or any other Ancillary Agreements the provisions of this Agreement shall control.

SECTION 8.02. Survival of Agreements. Except as otherwise contemplated by this Agreement, all covenants and agreements of the parties contained in this Agreement will remain in full force and effect and survive the Distribution Date.

SECTION 8.03. Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware (without giving effect to choice of law principles thereof).

17

SECTION 8.04. Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (i) on the date of delivery if delivered personally, (ii) upon confirmation of receipt if delivered by telefacsimile, (iii) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service or (iv) when received if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

(a) If to New Alpha or New Alpha, LLC, or prior to the Share Distribution, Generico or Gholdco:

Abraxis BioScience, Inc.

11755 Wilshire Boulevard

Suite 2000

Los Angeles, CA 90025

Fax: (310) 883-3138

Attention: General Counsel

with a copy to

Fried, Frank, Harris, Shriver & Jacobson LLP

1001 Pennsylvania Avenue, NW – Suite 800

Washington, DC 20004

Fax: (202) 639-7003

Attention: Alan S. Kaden

(b) If to Gholdco or Generico, to:

APP Pharmaceuticals, Inc.,

1501 East Woodfield Road, Suite 300E

Schaumburg, Illinois 60173

Fax: (847) 413-2652

Attention: President

or to such other persons or addresses as may be designated in writing by the party to receive such notice as provided above.

SECTION 8.05. Payments. Any payment that may be due under this Agreement is to be made by wire transfer of immediately available funds to the account designated by the Alpha Parties or the Generico Parties in such notice or by any other method as shall be agreed upon by the Alpha Parties and the Generico Parties.

SECTION 8.06. Consent to Jurisdiction. Each of the Generico Parties and the Alpha Parties irrevocably agrees that any legal action or proceeding with respect to this Agreement, the transactions contemplated hereby, any provision hereof, the breach, performance, validity or invalidity hereof or for recognition and enforcement of any judgment in respect hereof brought by another party hereto or its successors or permitted assigns may be brought and determined in any federal or state court located in the State of Delaware, and each of the Generico Parties and the Alpha Parties hereby irrevocably submits with regard to any such action or proceeding for themselves and in respect to their property, generally and unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each of the Generico Parties and the Alpha Parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, the transactions contemplated hereby, any provision hereof or the breach, performance, enforcement, validity or invalidity hereof, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to lawfully serve process, (b) that it or its

18

property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by Applicable Laws, that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper and (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

SECTION 8.07. Amendments. This Agreement cannot be amended except by a written agreement executed by New Alpha and Gholdco.

SECTION 8.08. Assignment. No party to this Agreement will (or permit any of the members of its Group to) convey, assign or otherwise transfer any of its rights or obligations under this Agreement, in whole or in part, without the prior written consent of the other parties in their sole and absolute discretion; provided that the Generico Parties may assign this Agreement and all of their rights hereunder to their lenders and debt providers for collateral security purposes. Any conveyance, assignment or transfer requiring the prior written consent of the other parties pursuant to this Section 8.08 that is made without such consent will be void ab initio. No assignment of this Agreement will relieve the assigning party of its obligations hereunder. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. The obligations of New Alpha and New Alpha, LLC under this Agreement shall be binding upon any Person that acquires all or substantially all the assets or stock of New Alpha, whether by merger, amalgamation or consolidation, asset purchase, stock purchase or subscription or otherwise, and New Alpha shall not enter into any agreement for any such transaction that does not so expressly provide in writing. The obligations of Generico and Gholdco under this Agreement shall be binding upon any Person that acquires all or substantially all the assets or stock of Gholdco, whether by merger, amalgamation or consolidation, asset purchase, stock purchase or subscription or otherwise, and Gholdco shall not enter into any agreement for any such transaction that does not so expressly provide in writing.

SECTION 8.09. Captions; Currency. The article, section and paragraph captions herein and the table of contents hereto are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof. Unless otherwise specified, all references herein to numbered articles or sections are to articles and sections of this Agreement and all references herein to schedules are to schedules to this Agreement. Unless otherwise specified, all references contained in this Agreement, in any schedule referred to herein or in any instrument or document delivered pursuant hereto to dollars or “$” shall mean United States Dollars.

19

SECTION 8.10. Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and will in no way be affected, impaired or invalidated thereby. If the economic or legal substance of the transactions contemplated hereby is affected in any manner adverse to any party as a result thereof, the parties will negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

SECTION 8.11. Parties in Interest. This Agreement is binding upon and is for the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement is not made for the benefit of any Person not a party hereto, and no Person other than the parties hereto or their respective successors and permitted assigns will acquire or have any benefit, right, remedy or claim under or by reason of this Agreement.

SECTION 8.12. Schedules. All schedules attached hereto are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Capitalized terms used in the schedules hereto but not otherwise defined therein will have the respective meanings assigned to such terms in this Agreement.

SECTION 8.13. Waivers; Remedies. Any agreement on the part of a party hereto to waive the performance by the other party of any of its covenants hereunder shall be valid only if set forth in a written instrument signed on behalf of such party. No failure or delay on the part of either the Generico Parties or the Alpha Parties in exercising any right, power or privilege hereunder will operate as a waiver thereof, nor will any waiver on the part of either the Generico Parties or the Alpha Parties of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder, nor will any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

SECTION 8.14. Counterparts. This Agreement may be executed in separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement.

SECTION 8.15. Performance. The Generico Parties will cause to be performed and hereby guarantee the performance of all actions, agreements and obligations set forth herein to be performed by any of their Subsidiaries. The Alpha Parties will cause to be performed and hereby guarantee the performance of all actions, agreements and obligations set forth herein to be performed by any of their Subsidiaries.

SECTION 8.16. Enforcement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. It is accordingly agreed that the parties shall be entitled to pursue specific performance of the terms hereof, this being in addition to any other remedy to which they are entitled at law or in equity.

20

SECTION 8.17. Interpretation. Any reference herein to any federal, state, local, or foreign law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. For the purposes of this Agreement, (a) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires, (b) the terms “hereof”, “herein”, and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement and (c) the word “including” and words of similar import when used in this Agreement shall mean “including, without limitation”.

SECTION 8.18. Mutual Drafting. This Agreement shall be deemed to be the joint work product of the Generico Parties and the Alpha Parties and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

21

IN WITNESS WHEREOF, the parties have caused this Tax Allocation Agreement to be executed by their duly authorized representatives.

APP PHARMACEUTICALS, INC. (f/k/a GENERICO HOLDINGS, INC.)
By:	/s/ Patrick Soon-Shiong
Name:	Patrick Soon-Shiong
Title:	CEO

APP PHARMACEUTICALS, LLC
By:	/s/ Patrick Soon-Shiong
Name:	Patrick Soon-Shiong
Title:	CEO

ABRAXIS BIOSCIENCE, LLC
By:	/s/ Patrick Soon-Shiong
Name:	Patrick Soon-Shiong
Title:	CEO

NEW ABRAXIS, INC.
By:	/s/ Patrick Soon-Shiong
Name:	Patrick Soon-Shiong
Title:	CEO

EX-10.3

Exhibit 10.3

EXECUTION COPY

TRANSITION SERVICES AGREEMENT

THIS TRANSITION SERVICES AGREEMENT (this “Agreement”) is entered into as of November 13, 2007 (the “Effective Date”), between NEW ABRAXIS, INC. a Delaware corporation (to be renamed Abraxis BioScience, Inc.) (“New Alpha”), and APP PHARMACEUTICALS, INC., a Delaware corporation formerly known as Generico Holdings, Inc. and Abraxis BioScience, Inc. (“Gholdco”).

Unless otherwise provided, all cross references to Sections, Articles and Exhibits used herein shall refer to Sections, Articles and Exhibits of this Agreement.

RECITALS

WHEREAS, New Alpha, Gholdco and certain other parties have entered into a Separation and Distribution Agreement, dated as of the date hereof (the “Separation Agreement”), pursuant to which Gholdco and New Alpha will become separate companies with Gholdco and its Subsidiaries operating the Generico Business (both as defined in the Separation Agreement) and New Alpha and its Subsidiaries operating the Alpha Business (as defined in the Separation Agreement) (each a “Business” and collectively the “Businesses”); and

WHEREAS, the parties to the Separation Agreement agreed to enter into a transition services agreement, substantially in the form hereof, to ensure that New Alpha and Gholdco and their respective Subsidiaries obtain certain support and administrative services for the purpose of assisting each other to manage an orderly separation of the Businesses;

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

1.1 Certain Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:

“Gholdco Services” shall mean the Services identified in Exhibit B.

“New Alpha Services” shall mean the Services identified in Exhibit A.

“Service” shall mean, as applicable, a service included in the Gholdco Services or New Alpha Services. Each service for which there is a separate itemized price in Exhibit A or Exhibit B shall be considered a separate Service.

1.2 Other Terms. Except as otherwise defined herein, all other capitalized terms used in this Agreement shall have the same meanings given to such terms in the Separation Agreement.

1

ARTICLE II

SERVICES

2.1 Provision of New Alpha Services by New Alpha. New Alpha or its Subsidiaries shall use commercially reasonable efforts to provide, or cause to be provided to, Gholdco and its Subsidiaries each of the New Alpha Services in a manner consistent with the manner in which such New Alpha Services were provided by Abraxis BioScience, Inc. (“Abraxis”) and its Subsidiaries prior to the Effective Date (but not including any historical preference or priority given to New Alpha’s products as compared with Gholdco’s products) and consistent with New Alpha and its Subsidiaries’ provision of such Services for its own business. Except as otherwise provided on Exhibit A, New Alpha Services shall be provided until such date as this Agreement specifies or, with regards to any specific New Alpha Service, such specific New Alpha Service is terminated in accordance with the terms of Article VI.

2.2 Provision of Gholdco Services by Gholdco. Gholdco or its Subsidiaries shall use commercially reasonable efforts to provide, or cause to be provided to, New Alpha and its Subsidiaries each of the Gholdco Services in a manner consistent with the manner in which such Gholdco Services were provided by Abraxis and its Subsidiaries prior to the Effective Time (but not including any historical preference or priority given to New Alpha’s products as compared with Gholdco’s products) and consistent with Gholdco and its Subsidiaries’ provision of such Services for its own business. Except as otherwise provided on Exhibit B, Gholdco Services shall be provided until such date as this Agreement specifies or, with regards to any specific Gholdco Service, such specific Gholdco Service is terminated in accordance with the terms of Article VI.

2.3 Cooperation. The parties acknowledge and agree that: (a) it is impracticable to create an exhaustive list of Services needed to facilitate an orderly transition of the Businesses and, accordingly, Exhibits A and B present general outlines of the scope of the Services to be provided by the parties; and (b) the parties will act in good faith and reasonably cooperate with one another during the term hereof to facilitate an orderly transition of the Businesses.

ARTICLE III

PAYMENT FOR SERVICES

3.1 Pricing. Each New Alpha Service provided by New Alpha or its Subsidiaries shall be charged to and payable by Gholdco or its Subsidiaries at the fees for such Service determined in accordance with Exhibit A. Each Gholdco Service provided by Gholdco or its Subsidiaries shall be charged to and payable by New Alpha or its Subsidiaries at the monthly fees for such Service determined in accordance with Exhibit B. Any fees shall be prorated during the first month and last month (as applicable) the Services are provided.

3.2 Billing and Payment. Charges for each of the Services provided shall be billed on a monthly basis by the party providing the Service. Such charges shall reflect the actual costs incurred by the party in providing the Services. The party receiving a Service shall remit the amount specified in any such bill within thirty (30) calendar days after its receipt thereof. Any amount not paid when due shall bear a late payment charge at a rate of ten percent (10%) per annum after the due date and until paid.

2

3.3 Disputes. In the event a dispute arises concerning a Service or payment of such Service, the parties must meet and attempt in good faith to resolve the dispute in accordance with the following procedure. Prior to filing a lawsuit, seeking relief in some other forum or withholding payment for a Service, a party must first notify the other party of the dispute by submitting in writing an outline of its position regarding the dispute, attaching relevant documentation to support its position and requesting a meeting with the other party within thirty (30) days of such notice. In response, the other party shall submit to that party an outline of its position, attaching relevant documentation to support its position, within thirty (30) days of its receipt of such notice. Responsible, authorized employees from each party shall then meet and attempt in good faith to resolve the dispute for at least thirty (30) days. If the dispute is not resolved within such thirty (30) day period, then the party that originally raised the dispute may file a lawsuit.

ARTICLE IV

WARRANTIES AND LIABILITIES

4.1 Level of Performance. Each party shall use commercially reasonable efforts to provide the Services (i) consistent with the manner in which such Services were provided by Abraxis and its Subsidiaries prior to the Effective Date (but not including any historical preference or priority given to New Alpha’s products as compared with Gholdco’s products) and consistent with such party’s provisions of such Services for its own business, (ii) subject to Section 5.3, using substantially the same resources as were used by Abraxis to provide such Services with respect to the Businesses prior to the Effective Date and (iii) in accordance with the policies, procedures and practices in effect with respect to the Businesses prior to the Effective Date, with such modifications after the Effective Date as are reasonably acceptable to both parties.

4.2 Disclaimer of All Other Warranties. EXCEPT AS EXPRESSLY PROVIDED IN SECTION 4.1, EACH PARTY MAKES NO REPRESENTATIONS OR WARRANTIES (INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE) OR GUARANTIES OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO ANY SERVICES (OR ANY SERVICES PROVIDED BY THIRD PARTIES WITH WHOM A PARTY CONTRACTS IN CONNECTION WITH THE PERFORMANCE OF THE SERVICES) PROVIDED TO THE OTHER PARTY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY EXHIBITS HEREOF.

4.3 Indemnification.

(a) New Alpha shall, to the full extent permitted by law, indemnify, defend and hold harmless Gholdco, its Subsidiaries, Affiliates, officers, directors, employees, agents (the “Gholdco Indemnified Parties”) and assigns against all claims, liabilities, damages, losses or expenses (“Damages”) that arise out of (i) New Alpha’s gross negligence, bad faith, intentional misconduct or intentional breach of this Agreement, (ii) any claim by any Person who is not a party to this Agreement (or an Affiliate thereof)

3

(a “Third Party Claim”) relating to or arising out of Gholdco’s performance of this Agreement and not resulting from Gholdco’s gross negligence, bad faith, intentional misconduct or intentional breach of this Agreement, or (iii) any Third Party Claim relating to or arising out of Gholdco’s performance of this Agreement to the extent the aggregate liability to such persons exceeds the limitation in Section 4.4(b), in each case, including but not limited to settlements, judgments, court costs, attorneys’ fees and other litigation expenses, fines and penalties; provided, however, that, except as set forth in clause (iii) of this Section 4.3(a), New Alpha shall not indemnify, defend or hold harmless any Gholdco Indemnified Party against any liability resulting from the gross negligence, bad faith or intentional misconduct of, or intentional breach of this Agreement by, any Gholdco Indemnified Party in the performance of this Agreement, or against liability under clause (i) above if New Alpha’s gross negligence or willful misconduct results in liability, damage, loss or expense to both New Alpha’s and Gholdco’s business.

(b) Gholdco shall, to the full extent permitted by law, indemnify, defend and hold harmless New Alpha, its Subsidiaries, Affiliates, officers, directors, members, employees, agents (the “New Alpha Indemnified Parties”) and assigns against all Damages that arise out of (i) Gholdco’s gross negligence, bad faith, intentional misconduct or intentional breach of this Agreement, (ii) any Third Party Claim relating to or arising out of New Alpha’s performance of this Agreement and not resulting from New Alpha’s gross negligence, bad faith, intentional misconduct or intentional breach of this Agreement or (iii) any Third Party Claim relating to or arising out of New Alpha’s performance of this Agreement to the extent the aggregate liability to such persons exceeds the limitation in Section 4.4(c), in each case, including but not limited to settlements, judgments, court costs, attorneys’ fees and other litigation expenses, fines and penalties; provided, however, that, except as set forth in clause (iii) of this Section 4.3(b), Gholdco shall not indemnify, defend or hold harmless any New Alpha Indemnified Party against any liability resulting from the gross negligence, bad faith or intentional misconduct of, or intentional breach of this Agreement by, any New Alpha Indemnified Party in the performance of this Agreement, or against liability under clause (i) above if Gholdco’s gross negligence or willful misconduct results in liability, damage, loss or expense to both New Alpha’s and Gholdco’s business.

(c) The procedure by which each of the parties to this Agreement performs its obligations under subsections (a) and (b) above shall be in accordance with Sections 4.04, 4.05 (excluding the last sentence of Section 4.05(a) of the Separation Agreement) and 4.06 of the Separation Agreement.

4.4 Limitation of Liability.

(a) NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, NEITHER PARTY WILL BE LIABLE HEREUNDER UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION, LOSS OF PROFITS FROM THE USE OF (OR INABILITY TO USE) THE SERVICES OR OTHERWISE IN CONNECTION WITH, OR ARISING OUT OF, THIS AGREEMENT, OTHER THAN SOLELY FOR GHOLDCO EXTRAORDINARY FAILURE OR NEW ALPHA EXTRAORDINARY FAILURE, as applicable (both as defined below).

4

(b) Notwithstanding anything herein to the contrary, in no event will Gholdco or any of its Affiliates or any other Gholdco Indemnified Parties have any liability to New Alpha or any of its Affiliates or any other New Alpha Indemnified Parties, or to any third party in connection with this Agreement, for Damages in excess of $5 million, except to the extent that such Damages are the result of (i) one of Gholdco’s or its Subsidiaries’ executive officers, in bad faith, affirmatively instructing employees of Gholdco or its Subsidiaries to materially breach Gholdco’s obligation to provide the Gholdco Services under this Agreement, or (ii) any intentional failure by Gholdco, in bad faith, to cure any material breach of Gholdco’s obligation to provide the Gholdco Services under this Agreement (which is capable of being cured) following notice thereof in accordance with Section 7.1 (and such breach is not cured within a reasonable period of time following receipt of written notice of such breach) (any of the occurrences set forth in sub-clauses (i) and (ii) of this Section 4.4, continuing after such cure period, “Gholdco Extraordinary Failure”).

(c) Notwithstanding anything herein to the contrary, in no event will New Alpha or any of its Affiliates or any other New Alpha Indemnified Parties have any liability to Gholdco or any of its Affiliates or any other Gholdco Indemnified Parties, or to any third party in connection with this Agreement, for Damages in excess of $5 million, except to the extent that such Damages are the result of (i) New Alpha’s or its Subsidiaries’ executive officers, in bad faith, affirmatively instructing employees of New Alpha or its Subsidiaries to materially breach New Alpha’s obligation to provide the New Alpha Services under this Agreement, or (ii) any intentional failure by New Alpha, in bad faith, to cure any material breach of New Alpha’s obligation to provide the New Alpha Services under this Agreement (which is capable of being cured) following notice thereof in accordance with Section 7.1 (and such breach is not cured within a reasonable period of time following receipt of written notice of such breach) (any of the occurrences set forth in sub-clauses (1) and (ii) of this Section 4.4(c), continuing after such cure period, “New Alpha Extraordinary Failure”)

ARTICLE V

FORCE MAJEURE; SERVICE INTERRUPTION AND RESTORATION

5.1 Force Majeure. No party to this Agreement shall be responsible for failure or delay in delivery of any Service, nor shall any party be responsible for failure or delay in receiving such Service, if caused by an act of God or public enemy, war, government acts or regulations, fire, flood, embargo, quarantine, epidemic, labor stoppages beyond its reasonable control, accident, unusually severe weather or other cause similar or dissimilar to the foregoing beyond their control; provided, that such Service will be performed or satisfied as soon as reasonably practicable after the termination of the relevant circumstances causing such failure or delay.

5

5.2 Service Interruption and Restoration. The parties recognize that from time to time disruptions in the Services may occur. If a disruption of any Service occurs, the providing party shall use commercially reasonable efforts to restore such Services consistent with the manner in which Abraxis would have restored such Services prior to the Effective Date (but not including any historical preference or priority given to New Alpha’s products as compared with Gholdco’s products) and consistent with such party’s restoration of such Services for its own business. No party shall be deemed in default of this Agreement to the extent that such disruptions or any delay or failure in the performance of its obligations under this Agreement results from any cause beyond its reasonable control and without its fault or negligence, such as the events and circumstances specified in Section 5.1. In the event of any such excused disruption or delay, (i) the non-performing party promptly shall advise the other party in writing of the circumstances causing the disruption or delay, (ii) the non-performing party shall use commercially reasonable efforts, consistent with the manner in which Abraxis would have overcome such circumstances prior to the Effective Date (but not including any historical preference or priority given to New Alpha’s products as compared with Gholdco’s products) and resume performance as promptly as commercially practicable and (iii) the time for performance shall be extended for a period equal to the time lost by reason of the delay. In the event the providing party is excused from supplying any Service in accordance with the terms of this paragraph, the receiving party shall be free to acquire such Services from any substitute source, at the receiving party’s expense, and with a reduction in any amounts otherwise due hereunder to the providing party for the Service being so substituted but without further liability to the providing party, for the period (and, to the extent the receiving party acts reasonably under the circumstances in making such commitments and it was necessary to make such commitments, a period thereafter necessary to honor reasonable commitments beyond the expiration of any disruption or delay) and to the extent reasonably necessitated by such non-performance.

5.3 Pro-Ration of Limited Resources for Services. If at any time the resources available to provide a particular Service or Services are less than the aggregate demand of both parties for such Service or Services, the providing party shall allocate whatever resources and or products that are available to it necessary for the performance of such Service or Services in good faith equitably between the providing party for its own account and the receiving party for the performance of the Service hereunder.

ARTICLE VI

TERMINATION

6.1 Term and Termination. The term of this Agreement shall be for twenty-four (24) months after the Closing Date, or such shorter or longer period as the parties indicate in Exhibit A or B, provided, however, a party receiving Services shall have the right to terminate one or more of the Services at the end of a designated month by giving the other party at least thirty (30) days prior written notice of such termination. Except as otherwise agreed and subject to Sections 5.2 and 5.3, each Service can only be terminated in whole, and partial termination of a Service is not permitted without the prior approval of the providing party not to be unreasonably withheld or delayed. The parties shall cooperate with each other in good faith in their efforts to reasonably effect early termination of Services, including, where applicable, partial termination, and to agree in good faith upon appropriate reduction of the charges hereunder in connection with such early termination. For the avoidance of doubt, a party may not terminate a particular Service that is necessary to provide another Service that has not been terminated.

6

6.2 Early Termination. Notwithstanding the foregoing, New Alpha and Gholdco each reserve the right to immediately terminate this Agreement by written notice to the other in the event that the other party shall have (a) applied for or consented to the appointment of a receiver, trustee or liquidator; (b) admitted in writing an inability to pay debts as they mature; (c) made a general assignment for the benefit of creditors; or (d) filed a voluntary petition, or have filed against it a petition, for an order of relief under the Federal Bankruptcy Code (as amended).

ARTICLE VII

MISCELLANEOUS

7.1 Notices. All notices and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been given if (i) delivered in person (to the individual whose attention is specified below) or via facsimile (followed immediately with a copy in the manner specified in clause (ii) or (iii) hereof), (ii) sent by prepaid first-class registered or certified mail, return receipt requested, or (iii) sent by recognized overnight courier service, as follows:

to New Alpha:

Abraxis BioScience, Inc.

11755 Wilshire Boulevard, Suite 2000

Los Angeles, California 90025

Fax: (310) 883-3138

Attention: Chief Executive Officer

with a copy to:

Abraxis BioScience, Inc.

11755 Wilshire Boulevard, Suite 2000

Los Angeles, California 90025

Fax: (310) 883-3138

Attention: General Counsel and Chief Financial Officer

to Gholdco:

APP Pharmaceuticals, Inc.

1501 East Woodfield Road, Suite 300E

Schaumburg, Illinois 60173

Fax: (847) 413-2652

Attention: Chief Executive Officer

7

with a copy to:

APP Pharmaceuticals, Inc.

1501 East Woodfield Road, Suite 300E

Schaumburg, Illinois 60173

Fax: (847) 413-2652

Attention: General Counsel and Chief Financial Officer

or to such other address as any party hereto may, from time to time, designate in a written notice given in like manner. All notices and other communications hereunder shall be effective: (i) the day of receipt when delivered by hand, facsimile or overnight courier; and (ii) three business days from the date deposited in the mail in the manner specified above.

7.2 Amendment; Waiver. Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by Gholdco and New Alpha, or in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Except as otherwise provided herein, the rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

7.3 Assignment; Parties in Interest. This Agreement and all of its provisions shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the parties hereto, provided, however, neither New Alpha nor Gholdco may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the other party. Notwithstanding the foregoing, with the prior written consent of the other party, the providing party may use subcontractors to provide some or all of the Services. If the providing party delegates any of its responsibilities under this Agreement to any of its Subsidiaries or uses subcontractors in the performance thereof, then the providing party shall remain fully responsible for the actions and inactions and performance of such Subsidiary or subcontractor and such Subsidiary or subcontractor shall be deemed the providing party hereunder for purposes of defining its performance obligations.

7.4 No Partnership. No party hereto in any way or for any purpose shall be deemed by reason of this Agreement to be a partner of any other party hereto in the conduct of their respective Businesses or a joint venturer or a member of a joint enterprise with such other party. Neither party shall have any right or authority, express or implied, to assume or create any obligation of any kind, or to make any representation or warranty, on behalf of the other party or to bind the other party in any respect whatsoever.

7.5 Governing Law; Submission to Jurisdiction; Selection of Forum. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS. THE PARTIES HEREBY CONSENT TO JURISDICTION AND VENUE IN THE STATE AND FEDERAL COURTS SITTING IN THE STATE OF DELAWARE.

8

7.6 Confidentiality. The provisions set forth in this Section 7.6 shall survive the termination or expiration of this Agreement.

(a) Definitions. In the course of discussing or carrying out their respective obligations under this Agreement, either party (the “Disclosing Party”) may disclose Confidential Information (as hereinafter defined) to the other party (the “Receiving Party”). As used herein, “Confidential Information” means all written and oral information concerning the Disclosing Party, its business, its Affiliates or the business of any of its Affiliates, whether prepared by the Disclosing Party, its advisors or otherwise, which is provided by or on behalf of the Disclosing Party to the Receiving Party during the term of this Agreement. Confidential Information shall include, without limitation, technical, scientific, business, financial and other information, data, materials and the like relating to drug applications, patent applications, products and proposed products, know-how, processes, proposed processes, formulations, manufacturing technology, contracts, clinical and preclinical data and dossiers, business relationships, customers, suppliers, marketing strategies and the like, and any and all other information, data and materials. Notwithstanding anything preceding to the contrary, Confidential Information shall not include information which the Receiving Party demonstrates (i) is or becomes available to the public other than as a result of a disclosure by the Receiving Party or its representatives; (ii) was available to the Receiving Party on a non-confidential basis prior to its disclosure to the Receiving Party by the Disclosing Party or its representatives; (iii) is disclosed to the Receiving Party by a third party which received such information from the Disclosing Party with no restrictions on disclosure; or (iv) was in the Receiving Party’s possession at the time of the disclosure by the Disclosing Party (as evidenced by written records) and was not acquired, directly or indirectly, from the Disclosing Party.

(b) Non-Disclosure. Subject to Section 7.6(d) of this Agreement, for a period of eight (8) years from the termination or expiration of this Agreement, the Receiving Party shall not disclose any Confidential Information of the Disclosing Party to any third party and shall not use such Confidential Information for purposes other than is required for its performance under this Agreement.

(c) Copies. Upon the termination or expiration of this Agreement, the Receiving Party shall return to the Disclosing Party (or destroy at the Disclosing Party’s sole discretion) all documents and other materials provided by the Disclosing Party to the Receiving Party containing or reflecting any Confidential Information, without retaining any copies; provided, however, that the Receiving Party may retain one (1) copy of any Confidential Information for recordkeeping purposes (but any Confidential Information not so returned or destroyed will remain subject to this Agreement). Upon request, the Receiving Party shall certify in writing to the Disclosing Party as to its compliance with this Section 7.6(c).

(d) Notice of Legal Process. In the event that the Receiving Party is requested or required (by subpoena, civil investigative demand or other process) to disclose any Confidential Information, the Receiving Party shall provide the Disclosing Party with prompt written notice of any such request or requirement. The Receiving Party agrees to use its best efforts to cooperate with the Disclosing Party in any attempt by the Disclosing Party to obtain an appropriate protective order or other reliable assurance that confidential treatment shall be accorded the Confidential Information. If the Receiving Party is compelled by any legal process to disclose Confidential Information, the Receiving Party may disclose only that portion of the Confidential Information which it is compelled to disclose.

9

7.7 Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

7.8 Entire Agreement. This Agreement constitutes and contains the entire and only existing and binding agreement between New Alpha and Gholdco concerning the subject matter hereof, and supercedes all prior and contemporaneous negotiations, agreements, proposed agreements and understandings, if any, between the parties concerning this Agreement or any of its provisions.

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

[The Balance Of This Page Has Intentionally Been Left Blank]

10

IN WITNESS WHEREOF, the parties have executed or caused this Transition Services Agreement to be executed as of the date first written above.

NEW ABRAXIS, INC.
By:	/s/ Patrick Soon-Shiong
	Name:	Patrick Soon-Shiong
	Title:	CEO

APP PHARMACEUTICALS, INC.
By:	/s/ Patrick Soon-Shiong
	Name:	Patrick Soon-Shiong
	Title:	CEO

EX-10.4

Exhibit 10.4

EXECUTION COPY

EMPLOYEE MATTERS AGREEMENT

This EMPLOYEE MATTERS AGREEMENT (this “Agreement”), dated as of November 13, 2007, is among APP Pharmaceuticals, Inc. (formerly known as Generico Holdings, Inc.), a Delaware corporation (“Gholdco”), APP Pharmaceuticals, LLC, a Delaware limited liability company (“Generico”) (Gholdco and Generico, collectively, the “Generico Parties”), Abraxis BioScience, LLC, a Delaware limited liability company (“New Alpha, LLC”), and New Abraxis, Inc., a Delaware corporation to be renamed Abraxis BioScience, Inc. (“New Alpha”) (New Alpha, LLC and New Alpha, collectively, the “Alpha Parties”).

RECITALS

WHEREAS, New Alpha, LLC, New Alpha, Generico and Gholdco have entered into a Separation and Distribution Agreement, dated as of the date hereof (the “Separation and Distribution Agreement”);

WHEREAS, on the date hereof, pursuant to the Agreement and Plan of Reorganization dated as of that date (the “Holding Company Merger Agreement”), Abraxis BioScience, Inc., a Delaware corporation (“Old Abraxis”), will merge (the “Alpha Merger”) with and into New Alpha, LLC, and pursuant to the Alpha Merger, each issued and outstanding share of common stock, $0.001 par value per share, of Old Abraxis (other than treasury shares which will be canceled and retired) will be converted into one share of common stock, par value $0.001 per share, of Gholdco (the “Gholdco Common Stock”), with New Alpha, LLC being the surviving entity in the Alpha Merger and all of its membership interests held by Gholdco;

WHEREAS, the following transactions will occur effective as of the date hereof after the consummation of the Alpha Merger and prior to the Distribution Time (as defined in the Separation and Distribution Agreement):

(a) the contribution by New Alpha, LLC and the Alpha Subsidiaries (as defined in the Separation and Distribution Agreement) to Generico of all of the Generico Assets (as defined in the Separation and Distribution Agreement), and the assumption by Generico of all of the Generico Liabilities (as defined in the Separation and Distribution Agreement), upon and subject to the terms and conditions set forth in the Separation and Distribution Agreement (collectively, the “Generico Contribution”);

(b) immediately after the Generico Contribution, the distribution by New Alpha, LLC of all of the outstanding membership interests of Generico to Gholdco (the “Generico Distribution”);

(c) immediately after the Generico Distribution, the contribution (the “Alpha Contribution”) by Gholdco of all of the membership interests of New Alpha, LLC to New Alpha;

(d) simultaneously with the Alpha Contribution, the incurrence by Generico of an aggregate of $1 billion (the amount borrowed, “Borrowing Amount”) of Debt Financing (as defined in the Separation and Distribution Agreement); and

(e) immediately after the consummation of the Debt Financing, the distribution by Generico to Gholdco of an amount of cash up to the Borrowing Amount (the “Generico Cash Distribution”) immediately followed by the contribution by Gholdco to New Alpha of cash in an aggregate amount of $975,722,781.93 (the “Cash Contribution”);

WHEREAS, immediately after the Cash Contribution, Gholdco will distribute (the “Share Distribution”) all of the issued and outstanding shares of common stock of New Alpha (“New Alpha Common Stock”) on a pro rata basis to the holders of record of Gholdco Common Stock upon the terms and subject to the conditions set forth in this Agreement (the transactions described above in the two prior WHEREAS clauses, together with the Share Distribution and the other transactions contemplated hereby, the “Transactions”); and

WHEREAS, in connection with the Transactions, Gholdco, Generico, New Alpha, LLC and New Alpha desire to enter into this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements contained herein and in the Separation and Distribution Agreement, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined herein shall have the meanings set forth in the Separation and Distribution Agreement. For purposes of this Agreement, except as provided in Section 4.04, references to “Alpha” shall be deemed to refer to New Alpha, LLC and, as applicable, its predecessor Old Abraxis.

1.01 “Alpha Common Stock” means the common stock, $0.001 par value per share, of Old Abraxis.

1.02 “Alpha Director” means each current or former member of the Board of Directors of Alpha immediately prior to the Distribution Time.

1.03 “Alpha Employee” means each individual who, immediately prior to the Distribution Time, is either actively employed by, or on an approved leave of absence (including short- or long-term disability leave) from, New Alpha or any of its Subsidiaries and whose employment primarily relates to the Alpha Business. The term “Alpha Employee” shall also include any individual designated as an Alpha Employee by mutual agreement of the parties hereto.

1.04 “Alpha Independent Contractor” means each independent contractor whose services primarily relate to the Alpha Business.

2

1.05 “Alpha Option” means an option to acquire shares of Alpha Common Stock granted pursuant to an Alpha Option Plan.

1.06 “Alpha Option Plan” means the American Pharmaceutical Partners, Inc. 2001 Stock Incentive Plan and the American Pharmaceutical Partners, Inc. 1997 Stock Option Plan.

1.07 “Alpha Personnel” means the Alpha Employees and the Former Alpha Employees. Except where context dictates otherwise, references to the Alpha Personnel shall be deemed to include references to the estates, legal representatives, dependents and beneficiaries of the Alpha Personnel.

1.08 “Alpha Restricted Stock Unit” means each restricted stock unit denominated in shares of Alpha Common Stock granted under the American BioScience, Inc. Restricted Stock Unit Plan I, the American BioScience, Inc. Restricted Stock Unit Plan II and the American Pharmaceutical Partners, Inc. 2001 Stock Incentive Plan.

1.09 “Benefit Plans” means, collectively, the Pension Plans, the Welfare Plans and the Non-ERISA Benefit Arrangements (including, for avoidance of doubt, the Non-U.S. Benefit Plans).

1.10 “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as codified at Part 6 of Subtitle B of Title I of ERISA and at Section 4980B of the Code.

1.11 “Code” means the U.S. Internal Revenue Code of 1986, as amended.

1.12 “Employee Agreement” means those agreements to which the Alpha Personnel or the Generico Personnel, on the one hand, and Gholdco or any of its Subsidiaries, on the other hand, are parties that contain confidentiality, noncompetition, nonsolicitation, assignment of inventions or other similar covenants, but shall not include any Employment Agreement.

1.13 “Employment Agreement” means any agreement to which the Alpha Personnel or the Generico Personnel, on the one hand, and Gholdco or any of its Subsidiaries, on the other hand, are parties to the extent guaranteeing or otherwise agreeing to wages, salary, bonuses, severance payments or other benefits or forms of compensation.

1.14 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. §1001, et seq.

1.15 “Former Alpha Employee” means each individual whose employment with Alpha and its Subsidiaries was terminated prior to the Distribution Time and whose employment, at the time of his or her separation from service, primarily related to the Alpha Business as determined in accordance with Section 2.01(b).

1.16 “Former Generico Employee” means each individual whose employment with Alpha and its Subsidiaries was terminated prior to the Distribution Time and whose employment, at the time of his or her separation from service, primarily related to the Generico Business as determined in accordance with Section 2.01(b).

3

1.17 “Generico Contribution” has the meaning set forth in the Separation and Distribution Agreement.

1.18 “Generico Employee” means each individual who, immediately prior to the Distribution Time, is either actively employed by, or on an approved leave of absence (including short- or long-term disability leave) from, Alpha or any of its Subsidiaries and whose employment primarily relates to the Generico Business. The term “Generico Employee” shall also include any individual designated as a Generico Employee by mutual agreement of the parties hereto.

1.19 “Generico Independent Contractor” means each individual or personal services corporation providing independent contractor services to Alpha or any of its Subsidiaries and whose services primarily relate to the Generico Business.

1.20 “Generico Personnel” means the Generico Employees and the Former Generico Employees. Except where context dictates otherwise, references to the Generico Personnel shall be deemed to include references to the estates, legal representatives, dependents and beneficiaries of the Generico Personnel.

1.21 “Gholdco Director” means any Alpha Director who is a director of Gholdco immediately after the Distribution Time.

1.22 “Gholdco Option” means an option to acquire shares of Gholdco Common Stock converted from an Alpha Option, as provided in Section 4.04(a).

1.23 “Gholdco Restricted Stock Unit” means a restricted stock unit denominated in shares of Gholdco Common Stock converted from an Alpha Restricted Stock Unit as provided in Section 4.04(c)(i) or (iii).

1.24 “IRS” means the U.S. Internal Revenue Service.

1.25 “Jointly Employed Employee” means the individuals who Gholdco and New Alpha determine will be employed, immediately following the Distribution Time, by a member of the Alpha Group and a member of the Generico Group. The parties agree that the sole Jointly Employed Employees will be Patrick Soon-Shiong and Lisa Gopala.

1.26 “New Alpha Director” means any Alpha Director who is a director of New Alpha immediately after the Distribution Time.

1.27 “New Alpha Option” means an option to acquire shares of New Alpha Common Stock converted from an Alpha Option, as provided in Section 4.04(b).

1.28 “New Alpha Restricted Stock Unit” means a restricted stock unit denominated in shares of New Alpha Common Stock converted from a Alpha Restricted Stock Unit, as provided in Section 4.04(c)(ii) or (iv).

4

1.29 “Non-ERISA Benefit Arrangement” means each contract, agreement, policy, practice, program, plan, trust or arrangement of Gholdco or any of its Subsidiaries, other than a Pension Plan or Welfare Plan, providing for benefits, perquisites or compensation of any nature to the Alpha Personnel or the Generico Personnel, including, without limitation severance, tuition reimbursement, supplemental unemployment, vacation, sick, personal or bereavement days, holidays, bonus, stock-based compensation or other forms of incentive compensation.

1.30 “Non-U.S. Benefit Plan” means each employee benefit plan, policy, program or arrangement sponsored or maintained by the Alpha Group or the Generico Group that is sponsored or maintained primarily for the benefit of employees located outside of the United States.

1.31 “Pension Plan” means any pension plan (as defined in section 3(2) of ERISA).

1.32 “Transition Services Agreement” means the Transition Services Agreement, dated as of the date hereof, between New Alpha and Gholdco.

1.33 “U.S.” means the United States of America.

1.34 “Welfare Plan” means any employee welfare plan (as defined in section 3(1) of ERISA), but excluding any severance pay plan.

ARTICLE II

EMPLOYEE MATTERS

2.01 Allocation of Employment of Alpha Employees and Generico Employees.

(a) Subject to Section 2.01(c), effective as of immediately prior to the Distribution Time, (i) the employment of each Generico Employee shall be transferred to (or such individual shall remain an employee of, as applicable) Generico and/or another member of the Generico Group as determined by Gholdco, and (ii) the employment of each Alpha Employee shall be transferred to (or such individual shall remain an employee of, as applicable) New Alpha, LLC and/or another member of the Alpha Group as determined by New Alpha. From and after the Distribution Time, each Alpha Employee shall remain an employee of the Alpha Group and each Generico Employee shall remain an employee of the Generico Group; provided that nothing contained herein shall be construed to limit the ability of any member of the Alpha Group or Generico Group to terminate the employment of any of its employees at any time and for any or no reason. In addition, (i) no provision of this Agreement shall be construed to apply to any individual who is hired after the Distribution Time by the Alpha Group and (ii) no provision of this Agreement shall be construed to apply to any individual who is hired after the Distribution Time by the Generico Group, in each case except to the extent such individual is a Former Alpha Employee or a Former Generico Employee and, in such case, only with respect to the period of employment with Alpha and its Subsidiaries prior to the Distribution Time.

(b) Those employees who provide services in respect of both the Alpha Business and the Generico Business (the “Shared Services Employees”) have been designated as Alpha Employees or Generico Employees by mutual agreement of the parties.

5

(c) Effective immediately prior to the Distribution Time, Jointly Employed Employees shall be employed by a member of the Alpha Group and a member of the Generico Group as determined by New Alpha and Gholdco. With the exception of salary and cash bonus, each Jointly Employed Employee will participate in the Benefit Plans only of the Alpha Group (and in none of the Benefit Plans of the Generico Group). The salary and cash bonus payments made to a Jointly Employed Employee by the Alpha Group shall be reduced by any salary and bonus paid to a jointly Employed Employee by the Generico Group.

2.02 Severance Obligations.

(a) It is intended that the Alpha Personnel and the Generico Personnel shall not be entitled to any termination or severance benefits as a result of the Alpha Merger, the Generico Distribution, the Share Distribution or any other transaction contemplated by this Agreement or the Separation and Distribution Agreement (other than payments or benefits with respect to any such individuals who separate from service in connection with such transactions and are entitled to a termination or severance benefit under applicable legislation, which shall be the responsibility of New Alpha if the payment or benefit is payable to an Alpha Personnel, and shall be the responsibility of Generico if the payment or benefit is payable to a Generico Personnel), and each of the Alpha Parties and the Generico Parties shall cause the severance arrangements of the Alpha Group and the Generico Group, respectively, to be interpreted and administered consistent with such intent.

(b) Except as set forth in Section 2.02(a), from and after the Distribution Time, the Generico Parties shall be fully responsible for, and none of the Alpha Parties or any of the Affiliates of the Alpha Parties shall have any Liability or other obligation for, any termination or severance payment or benefit obligations with respect to any of the Generico Personnel (or any person who becomes an employee of any member of the Generico Group after the Distribution Time) payable after the Distribution Time, including any severance payments owed, but not yet paid, to any Former Generico Employee.

(c) From and after the Distribution Time, the Alpha Parties shall be fully responsible for, and none of the Generico Parties or any of the Affiliates of the Generico Parties shall have any Liability or other obligations for, any termination or severance payments or benefit obligations with respect to any of the Alpha Personnel (or any person who becomes an employee of any member of the Alpha Group after the Distribution Time) payable after the Distribution Time, including any severance payments owed, but not yet paid, to any Former Alpha Employee.

2.03 Personnel Records.

(a) Subject to Applicable Laws, as soon as practicable following the Distribution Time, the Alpha Parties shall cause all information and records regarding employment and personnel matters of the Generico Personnel in the possession of the Alpha Group (including, without limitation, all Employee Agreements) to be transferred to a member of the Generico Group designated by Generico, and the Generico Parties shall cause the members of the Generico Group to retain such information and records after the Distribution Time in accordance in all material respects with Applicable Laws relating to the collection,

6

storage, retention and disclosure of such information and records. From and after such transfer, such information and records shall be the property of the Generico Group. Subject to Applicable Laws, New Alpha and its Subsidiaries shall be entitled to retain copies of any such information and records with respect to any of the Generico Personnel so transferred to the Generico Group in which New Alpha or any of its Subsidiaries has an interest, as determined by New Alpha in its reasonable discretion. Access to such information and records after the Distribution Time will be provided to the Alpha Parties in accordance with Article VI of the Separation and Distribution Agreement. Notwithstanding any limitations and restrictions set forth in Article VI of the Separation and Distribution Agreement, the Alpha Parties shall be entitled to reasonable access, subject to Applicable Laws, to such information and records necessary to their or their Subsidiaries’ administration of any Benefit Plans sponsored or maintained by any member of the Alpha Group or as otherwise required by Applicable Laws.

(b) Subject to Applicable Laws, all information and records regarding employment and personnel matters of the Alpha Personnel shall be retained after the Distribution Time by members of the Alpha Group in accordance in all material respects with Applicable Laws relating to the collection, storage, retention and disclosure of such information and records. Access to such information and records after the Distribution Time will be provided to Generico in accordance with Article VI of the Separation and Distribution Agreement. Notwithstanding any limitations and restrictions set forth in Article VI of the Separation and Distribution Agreement, Generico shall be entitled to reasonable access, subject to Applicable Laws, to such information and records necessary to Generico’s administration of any Benefit Plans on behalf of any of the Alpha Parties or on behalf or for the benefit of any Alpha Personnel after the Distribution Time or as otherwise required by Applicable Laws for so long as said administration continues pursuant to this Agreement, the Transition Services Agreement or such longer period as required by Applicable Laws. Subject to Applicable Laws, New Alpha shall also provide Gholdco or any of its Subsidiaries upon request with copies of any such information and records with respect to any of the Alpha Personnel in which Gholdco or any of its Subsidiaries has an interest, as determined by Generico in its reasonable discretion.

ARTICLE III

WELFARE PLANS

3.01 Assumption of Welfare Plans by the Generico Group; Cessation of Participation in Welfare Plans.

(a) Effective as of the Distribution Time, the Generico Group shall assume the Welfare Plans immediately prior to the Distribution Time that are sponsored by Alpha or any of its Subsidiaries (prior to such assumption, the “Alpha Welfare Plans”), including all Liabilities thereunder (following such assumption, the “Generico Welfare Plans”).

(b) Each member of the Alpha Group shall cease to be a participating employer in all Generico Welfare Plans at the Distribution Time, and participation in the Generico Welfare Plans will cease for all Alpha Personnel at the Distribution Time.

7

3.02 New Alpha Welfare Plans. To the extent applicable to any Welfare Plans sponsored by any member of the Alpha Group in which Alpha Personnel commence to participate after the Distribution Time that provide benefits similar to the benefits that had been provided to such employees under an Alpha Welfare Plan immediately prior to the Distribution Time (each, a “New Alpha Welfare Plan”), New Alpha, LLC shall use its reasonable best efforts to cause the New Alpha Welfare Plans to recognize all coverage and contribution elections made by Alpha Personnel under the Generico Welfare Plans in effect for the period immediately prior to the commencement of participation and shall apply such elections under the New Alpha Welfare Plans for the remainder of the period or periods for which such elections are by their terms applicable. New Alpha, LLC shall cause all beneficiary designations made by Alpha Personnel under the Generico Welfare Plans to the extent applicable, to be transferred to, and be in full force and effect under, the New Alpha Welfare Plans until such beneficiary designations are replaced or revoked by the Alpha Personnel who made the beneficiary designation.

3.03 Welfare Plan Liabilities.

(a) Liabilities under New Alpha Welfare Plans. The Alpha Parties shall be solely jointly and severally responsible for all Liabilities incurred with respect to any Alpha Personnel or otherwise under the New Alpha Welfare Plans, and none of the Generico Parties or the Generico Welfare Plans shall assume, retain or become responsible for any such Liabilities.

(b) Liabilities under Generico Welfare Plans; Incurred but Unreported Claims. New Alpha, LLC shall be solely responsible, after the Distribution Time, for all claims for welfare benefits (and for any Liabilities arising as a result of such claims) incurred by any of the Alpha Personnel under the Generico Welfare Plans following the Distribution Time, and New Alpha, LLC shall promptly reimburse Generico and the Generico Welfare Plans for all such claims and Liabilities (except to the extent that Generico is fully reimbursed for such Liability by insurance with third-party insurers). In addition, New Alpha, LLC shall be solely responsible, after the Distribution Time, for all claims for welfare benefits (and for any Liabilities arising as a result of such claims) incurred by any of the Alpha Personnel under the Generico Welfare Plans at or prior to the Distribution Time, except to the extent that such claims have been paid as of the Distribution Time or to the extent that Generico is fully reimbursed by insurance with third-party insurers, and neither Generico nor the Generico Welfare Plans shall assume or retain any such claims or Liabilities (except that (i) the Generico Welfare Plans shall bear the responsibility of determining whether such claims are entitled to payment under the terms of the Generico Welfare Plans as provided in the Transition Services Agreement and (ii) if, to the extent necessary for the efficient administration of the Generico Welfare Plans, Generico pays any of such claims, Generico shall be promptly reimbursed therefor by New Alpha, LLC). Claims for health benefits shall be considered to be incurred prior to the Distribution Time if the services related to such claims were provided prior to the Distribution Time. Claims for all other welfare benefits shall be considered to be incurred prior to the Distribution Time if the date of loss occurred prior to the Distribution Time.

(c) Short-Term and Long-Term Disability Benefits. Notwithstanding subsection (a) and (b) above, all Alpha Personnel who, as of the Distribution Time, are receiving or entitled to receive short-term or long-term disability benefits under a Generico short- and long-term disability plan (which is a Generico Welfare Plan) with respect to the incurrence of a disability on or prior

8

to the Distribution Time shall continue participation or become eligible to participate in the applicable Generico short- and long-term disability plans following the Distribution Time in accordance with the terms and conditions of such plans and any applicable related insurance contracts or policies; provided, however, that (i) New Alpha, LLC shall bear and be responsible for all costs, claims and other Liabilities related to the provision of short-term disability benefits and medical benefits to such Alpha Personnel during their disability period from and after the Distribution Time under the applicable Generico Welfare Plans (other than Liabilities related to such plans that result from matters of non-compliance following the Distribution Time; provided that in no event shall the continued participation by Alpha Personnel in the Generico Welfare Plans as described herein constitute or be deemed to constitute a matter of non-compliance for these purposes) and (ii) neither Generico nor any of the Generico Welfare Plans shall be obligated to provide medical benefits to such Alpha Personnel during their disability period following the date on which New Alpha, LLC establishes the New Alpha Welfare Plans that provide medical benefits to the Alpha Employees.

(d) COBRA and HIPAA Liabilities. Notwithstanding subsection (a) and (b) above, after the Distribution Time: (i) the Generico Parties shall be solely jointly and severally responsible for the continuation coverage requirements under COBRA and the portability requirements under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) with respect to the Former Alpha Employees and the Generico Personnel and their qualified beneficiaries under the applicable Generico Welfare Plans; provided, that (A) New Alpha, LLC shall bear and be responsible for all costs, claims and other Liabilities related to the satisfaction of such requirements to the extent the Generico Parties are not fully reimbursed therefor by insurance with third-party insurers (other than Liabilities related to such plans that result from matters of non-compliance following the Distribution Time; provided that in no event shall the continued participation by Alpha Personnel in the Generico Welfare Plans constitute or be deemed to constitute a matter of non-compliance for these purposes) with respect to the Former Alpha Employees in excess of required employee contributions and (B) New Alpha, LLC may elect, upon reasonable notice to Generico, to assume responsibility for such requirements with respect to the Former Alpha Employees, in which event Generico and the Generico Welfare Plans shall cease to have any responsibility under this Section 3.03(d), and (ii) the Alpha Parties shall be solely jointly and severally responsible for the continuation coverage requirements under COBRA and the portability requirements under HIPAA with respect to the Alpha Employees and their qualified beneficiaries under the applicable New Alpha Welfare Plans.

ARTICLE IV

COMPENSATION MATTERS

AND NON-ERISA BENEFIT ARRANGEMENTS

4.01 Assumption of Non-ERISA Benefit Arrangements by the Generico Group; Cessation of Participation in Non-ERISA Benefit Arrangements.

(a) From and after the Distribution Time, the Generico Group shall assume and be solely responsible for the Non-ERISA Benefit Arrangements, including but not limited to the Alpha Option Plan and the American Pharmaceutical Partners, Inc. 2001 Employee Stock Purchase Plan (the “ESPP”), including all Liabilities thereunder.

9

(b) Each member of the Alpha Group shall cease to participate in all Non-ERISA Benefit Arrangements, including but not limited to the Alpha Option Plan and the ESPP, at the Distribution Time. Participation in the Non-ERISA Benefit Arrangements, including but not limited to the Alpha Option Plan and the ESPP, will cease for all Alpha Personnel at the Distribution Time.

4.02 Assumption of Employee Related Obligations.

(a) From and after the Distribution Time, the Generico Parties shall be solely responsible for all Liabilities (including administrative responsibilities) related to the agreements and obligations described in Section 4.02(a)(i) through Section 4.02(a)(vi), and no Alpha Party or any of its Affiliates shall retain such Liabilities or have any responsibility with respect thereto:

(i) Each Employee Agreement and Employment Agreement entered into prior to the Distribution Time between any member of the Alpha Group and any of the Generico Personnel; provided, that nothing herein shall limit the rights of the Alpha Group or the Generico Group thereunder with respect to their business operations, to the extent provided therein.

(ii) Agreements entered into prior to the Distribution Time between any member of the Alpha Group and any Generico Independent Contractor.

(iii) All wages, salary, ordinary compensation or commissions payable to any of the Generico Personnel after the Distribution Time, and all vacation, paid time off, sick leave, or other fringe benefits accrued with respect to any of the Generico Personnel at the Distribution Time, whether earned before or after the Distribution Time.

(iv) All bonus and cash incentive compensation payment obligations, if any, payable after the Distribution Time to any of the Generico Personnel, whether earned before or after the Distribution Time.

(v) All Liabilities with respect to any of the Generico Personnel under the Non-ERISA Benefit Arrangements, whether earned or accrued before or after the Distribution Time (except to the extent that the Generico Group is fully reimbursed for such Liability by insurance with third-party insurers).

(vi) All Liabilities of the Generico Business related to the Generico Personnel set forth on Schedules 3.01(e)(ii) and 3.01(e)(iii) of the Separation and Distribution Agreement.

The parties agree to negotiate in good faith with the Generico Personnel and any third parties, if applicable, to cause the foregoing Liabilities to be assumed by the Generico Parties on terms no less favorable to the Generico Parties than those that apply to the Alpha Parties and to have the Alpha Group fully released from such Liabilities. If any of the foregoing Liabilities cannot be assumed by the

10

Generico Parties and the Alpha Group released therefrom for a reason beyond the control of the parties hereto, including the refusal of any such third party to consent to such an assumption and release, then the Generico Parties shall reimburse the Alpha Group in the event that any such Liabilities are paid by the Alpha Group, in accordance with Section 7.03, as though it had been assumed and paid by Generico.

(b) From and after the Distribution Time, the Alpha Parties shall be solely responsible for all Liabilities related to the agreements and obligations described in Section 4.02(b)(i) through Section 4.02(b)(iv), and no Generico Party or any of their respective Affiliates shall retain such Liabilities or have any responsibility with respect thereto:

(i) All wages, salary, ordinary compensation or commissions payable to any of the Alpha Personnel after the Distribution Time, and all vacation, paid time off, sick leave, or other fringe benefits accrued with respect any of the Alpha Personnel at the Distribution Time, whether earned before or after the Distribution Time.

(ii) All bonus and cash incentive compensation payment obligations, if any, payable after the Distribution Time to any of the Alpha Personnel, whether earned before or after the Distribution Time.

(iii) All Liabilities with respect to any of the Alpha Personnel under the Non-ERISA Benefit Arrangements, whether earned or accrued before or after the Distribution Time (except to the extent that the Alpha Group is fully reimbursed for such Liability by insurance with third-party insurers, and, with respect to such Liabilities related to service or events prior to the Distribution Time, only to the extent accrued on the books of account of Alpha at the Distribution Time); provided that the Alpha Group shall not assume any Liabilities related to such Non-ERISA Benefit Arrangements that result from matters of non-compliance prior to the Distribution Time.

(iv) All Liabilities, regardless of when arising or incurred, under the ESPP or any other Benefit Plan, which Liabilities are not expressly assumed by the Generico Parties in this Agreement.

The parties agree to negotiate in good faith with the Alpha Personnel and any third parties, if applicable, to cause the foregoing Liabilities to be assumed by the Alpha Parties on terms no less favorable to the Alpha Parties than those that apply to the Generico Parties and to have the Generico Group fully released from such Liabilities. If any of the foregoing Liabilities cannot be assumed by the Alpha Parties and the Generico Group released therefrom for a reason beyond the control of the parties hereto, including the refusal of any such third party to consent to such an assumption and release, then the Alpha Parties shall reimburse the Generico Group for any such Liabilities paid by the Generico Group, in accordance with Section 7.03, as though it had been assumed and paid by New Alpha, LLC.

11

4.03 Bonus and Cash Incentive Plans.

Without limiting the generality of Section 4.02, from and after the Distribution Time, the Generico Parties shall be solely responsible for Alpha’s current bonus and cash incentive compensation plans and arrangements with respect to the Generico Employees and shall be solely responsible for all payment obligations earned by the Generico Employees thereunder, subject to the Separation and Distribution Agreement.

4.04 Equity Compensation Plans.

(a) Alpha Options Held by Generico Personnel and Gholdco Directors. Each Alpha Option held by any of the Generico Personnel or Gholdco Directors that is outstanding immediately before the Distribution Time shall be converted at the Distribution Time into a Gholdco Option. Immediately following the Distribution Time, each Gholdco Option shall have the same terms and conditions as applied to the corresponding Alpha Option to which it relates immediately prior to the Alpha Merger and shall continue to be subject to the terms and conditions provided in the applicable Alpha Option Plan and the applicable grant agreements (including, without limitation, any rights of Gholdco with respect to such Gholdco Options contained therein). New Alpha, Gholdco and New Alpha, LLC shall take such actions as may be necessary to effectuate the provisions of this Section 4.04(a). For the avoidance of doubt, at no time will an Old Abraxis Option be deemed to relate to New Alpha, LLC. The conversion referred to above shall be effected in accordance with the principles set forth in Exhibit A hereto, but notwithstanding the foregoing or anything to the contrary herein or on Exhibit A, the modification of the Gholdco Options pursuant to this Section 4.04(a) shall be consistent with Section 424 of the Code and the regulations issued thereunder, if applicable, and Section 409A of the Code and the regulations issued thereunder and shall comply with all Applicable Laws.

(b) Alpha Options Held by Alpha Personnel and New Alpha Directors. Each Alpha Option held by any of the Alpha Personnel or New Alpha Directors that is outstanding immediately before the Distribution Time shall be converted at the Distribution Time into a New Alpha Option. Immediately following the Distribution Time, each New Alpha Option shall have the same terms and conditions as applied to the corresponding Alpha Option to which it relates immediately prior to the Alpha Merger and shall continue to be subject to the terms and conditions provided in the applicable Alpha Option Plan and the applicable grant agreements (including, without limitation, any rights of New Alpha with respect to such New Alpha Options contained therein). New Alpha, Gholdco and New Alpha, LLC shall each take such actions as may be necessary to effectuate the provisions of this Section 4.04(b). For the avoidance of doubt, at no time will an Old Abraxis Option be deemed to pertain to New Alpha, LLC. The conversion referred to above shall be effected in accordance with the principles set forth on Exhibit A hereto, and notwithstanding the foregoing or anything to the contrary herein or on Exhibit A, shall be consistent with Section 424 of the Code and the regulations issued thereunder, if applicable, and Section 409A of the Code and the regulations issued thereunder and shall comply with all Applicable Laws.

12

(c) Restricted Stock Units.

(i) Each Alpha Restricted Stock Unit subject to the American Pharmaceutical Partners, Inc. 2001 Stock Incentive Plan (the “2001 Plan”) held by Generico Employees that is outstanding immediately before the Distribution Time shall be converted at the Distribution Time into a Gholdco Restricted Stock Unit. Immediately following the Distribution Time, each Gholdco Restricted Stock Unit shall have the same terms and conditions as applied to the corresponding Alpha Restricted Stock Unit to which it relates immediately prior to the Alpha Merger and shall continue to be subject to the terms and conditions provided in the 2001 Plan and the applicable grant agreements (including, without limitation, any rights of Gholdco with respect to such Gholdco Restricted Stock Units contained therein). New Alpha, Gholdco and New Alpha, LLC shall take such actions as may be necessary to effectuate the provisions of this Section 4.04(c)(i). For the avoidance of doubt, at no time will an Alpha Restricted Stock Unit be deemed to pertain to New Alpha, LLC. The conversion referred to above shall be effected in accordance with the principles set forth on Exhibit A hereto, and notwithstanding the foregoing or anything to the contrary herein or on Exhibit A shall be consistent with Section 409A of the Code and the regulations issued thereunder and shall comply with all Applicable Laws.

(ii) Each Alpha Restricted Stock Unit subject to the 2001 Plan held by Alpha Employees that is outstanding immediately before the Distribution Time shall be converted at the Distribution Time into a New Alpha Restricted Stock Unit. Immediately following the Distribution Time, each New Alpha Restricted Stock Unit shall have the same terms and conditions as applied to the corresponding Alpha Restricted Stock Unit to which it relates immediately prior to the Alpha Merger and shall continue to be subject to the terms and conditions provided in the 2001 Plan and the applicable grant agreements (including, without limitation, any rights of New Alpha with respect to such New Alpha Restricted Stock Units contained therein). New Alpha, Gholdco and New Alpha, LLC shall each take such actions as may be necessary to effectuate the provisions of this Section 4.04(c)(ii). For the avoidance of doubt, at no time will any Alpha Restricted Stock Unit be deemed to relate to New Alpha, LLC. The conversion referred to above shall be effected in accordance with the principles set forth on Exhibit A hereto and notwithstanding the foregoing or anything to the contrary herein or on Exhibit A, shall be consistent with Section 409A of the Code and the regulations issued thereunder and shall comply with all Applicable Laws.

(iii) Each Alpha Restricted Stock Unit subject to the American BioScience, Inc. Restricted Stock Unit Plan I (“Plan I”) or the American BioScience, Inc. Restricted Stock Unit Plan II (“Plan II”) held by a Generico Employee that is outstanding immediately before the Distribution Time shall be converted at the Distribution Time into a Gholdco Restricted Stock Unit. Immediately following the Distribution Time, each Gholdco Restricted Stock Unit shall have the same terms and conditions as applied to the corresponding Alpha Restricted Stock Unit to which it relates immediately prior to the Alpha Merger and shall continue to be subject to the terms and conditions provided in Plan I or Plan II, as applicable, and the applicable grant agreements (including, without limitation, any rights of Gholdco with respect to such

13

Gholdco Restricted Stock Unit contained therein). Gholdco, New Alpha and New Alpha, LLC shall take such actions as may be necessary to effectuate the provisions of this Section 4.04(c)(iii). For the avoidance of doubt, at no time will an Alpha Restricted Stock Unit be deemed to pertain to New Alpha, LLC. The conversion referred to above shall be effected in accordance with the principles set forth on Exhibit A hereto, but notwithstanding the foregoing or anything to the contrary herein or on Exhibit A, shall be consistent with Section 409A of the Code and the regulations issued thereunder and shall comply with all Applicable Laws.

(iv) Each Alpha Restricted Stock Unit subject to Plan I or Plan II held by an Alpha Employee that is outstanding immediately before the Distribution Time shall be converted at the Distribution Time into a New Alpha Restricted Stock Unit. Immediately following the Distribution Time, each New Alpha Restricted Stock Unit shall have the same terms and conditions as applied to the corresponding Alpha Restricted Stock Unit to which it relates immediately prior to the Alpha Merger and shall continue to be subject to the terms and conditions provided Plan I or Plan II, as applicable, and the applicable grant agreements (including, without limitation, any rights of New Alpha with respect to such New Alpha Restricted Stock Unit contained therein). New Alpha, New Alpha, LLC and Gholdco shall each take such actions as may be necessary to effectuate the provisions of this Section 4.04(c)(iv). For the avoidance of doubt, at no time will an Alpha Restricted Stock Unit be deemed to pertain to New Alpha, LLC. The conversion referred to above shall be effected in accordance with the principles set forth on Exhibit A hereto, but notwithstanding the foregoing or anything to the contrary herein or on Exhibit A, shall be consistent with Section 409A of the Code and the regulations issued thereunder and shall comply with all Applicable Laws.

(d) Registration Statements. Each of Gholdco and New Alpha shall, by the first business day following the day on which the Distribution Time occurs, file with the Securities and Exchange Commission a registration statement on Form S-8 (or successor form), or an amendment to an existing Form S-8, with respect to the Gholdco Common Stock and New Alpha Common Stock to be issued upon exercise or settlement (as applicable) of the Gholdco Options, Gholdco Restricted Stock Units, New Alpha Options and New Alpha Restricted Stock Units and shall use its reasonable best efforts to maintain the effectiveness of such registration statement (and to maintain the current status of the prospectus or prospectuses contained therein and to comply with an applicable state securities or “blue sky” laws) for so long as such awards remain outstanding.

ARTICLE V

QUALIFIED RETIREMENT PLANS

5.01 Defined Contribution Plans.

(a) Effective as of the Distribution Time, the Generico Group shall assume all Liabilities (including administrative responsibilities) under the Abraxis BioScience, Inc. Savings and Retirement Plan. For purposes of this Agreement, following such assumption, such plan shall be referred to as the “Generico Profit Sharing Plan.”

14

(b) Establishment of New Alpha Defined Contribution Plan.

(i) Establishment of New Alpha Profit Sharing Plan. As soon as administratively practicable after the Distribution Time but in any event prior to the end of the term of the Transition Services Agreement, New Alpha shall (or shall cause another member of the Alpha Group to) adopt, and the active Alpha Employees shall be eligible to participate in, a defined contribution plan intended to be qualified under Section 401(a) of the Code and trust intended to be qualified under Section 501(a) of the Code (the “New Alpha Profit Sharing Plan”). Subject to the asset transfers described in Section 5.01(b)(ii), the Alpha Parties shall assume and thereafter be jointly and severally responsible for all then existing or future Liabilities on behalf of Alpha Personnel related to the New Alpha Profit Sharing Plan and the administration thereof and the Generico Parties shall not retain any such Liabilities. As soon as practicable after the adoption of the New Alpha Profit Sharing Plan, Alpha shall, to the extent applicable, submit an application to the IRS for a determination regarding the qualification of the New Alpha Profit Sharing Plan and shall take any actions not inconsistent with the other general commitments of the Alpha Parties contained in this Agreement and make any amendments necessary to receive a favorable determination letter.

(ii) Transfer of Account Balances. As soon as administratively practicable after the receipt of the determination letter referred to in Section 5.02(b)(i) (a copy of which shall be provided to Generico), the Alpha Parties and the Generico Parties shall cooperate to cause the Generico Profit Sharing Plan to transfer to the New Alpha Profit Sharing Plan assets having a value as of the applicable valuation date that are equal to the value of the account balances of, and Liabilities with respect to, all Alpha Personnel with account balances, whether or not vested, under the Generico Profit Sharing Plan as of such valuation date. Such transferred assets shall be as mutually agreed between New Alpha and Gholdco (provided, that (i) the parties shall endeavor to “map” the investments elected by the Alpha Personnel participating in the Generico Profit Sharing Plan to similar investments in the New Alpha Profit Sharing Plan, (ii) promissory notes for outstanding participant loans shall be transferred and (iii) if the New Alpha Profit Sharing Plan permits New Alpha Common Stock as an investment alternative, then any New Alpha Common Stock held in the accounts of the Alpha Personnel shall be transferred), and such asset transfer shall be in accordance with Section 414(l) of the Code. Liabilities with respect to the administration of any qualified domestic relations orders (as defined in Section 414(p) of the Code) received with respect to any assets transferred to the New Alpha Profit Sharing Plan shall be transferred to the Alpha Parties at the time such assets are transferred.

(iii) Past Service Credit and Vesting. With respect to all Alpha Employees and without duplication of benefits, the New Alpha Profit Sharing Plan shall (i) recognize, to the extent applicable, all service, compensation and other determinations that, at the Distribution Time, were recognized under the Generico Profit Sharing Plan for purposes of

15

determining eligibility, participation, vesting, and determinations of the levels of benefits for Alpha Employees (provided, that service by the Alpha Personnel with the Alpha Group following the Distribution Time shall also be recognized by the New Alpha Profit Sharing Plan), and (ii) maintain the vesting schedule applicable under the Generico Profit Sharing Plan for accounts transferred from the Generico Profit Sharing Plan.

(iv) Elections and Designations. To the extent applicable, all participant elections and beneficiary designations made by the Alpha Personnel under the Generico Profit Sharing Plan shall be transferred to, and be in full force and effect under, the New Alpha Profit Sharing Plan until such participant elections and beneficiary designations are replaced or revoked by the Alpha Personnel who made the election or designation.

(v) Cessation of Participation in the Generico Profit Sharing Plan. Each member of the Alpha Group shall cease to be a participating employer in the Generico Profit Sharing Plan at the Distribution Time, and, except as provided in the Transition Services Agreement, participation in the Generico Profit Sharing Plan will cease for all Alpha Personnel no later than the end of the term of the Transition Services Agreement.

5.02 Further Cooperation. The Alpha Parties and the Generico Parties will cooperate in good faith in the filing of documents required by this Agreement to generally effect the purposes of this Agreement and to resolve any discrepancies or obtain any missing data for purposes of determining benefit eligibility, participation, vesting and calculation of benefits with respect to any of the Generico Employees.

ARTICLE VI

FOREIGN PLANS

The terms and conditions set forth in this Agreement shall be applied equally, to the maximum extent practicable, but subject to all Applicable Laws, to each Non-U.S. Benefit Plan. In the event that the terms and conditions of this Agreement cannot be applied equally to any Non-U.S. Benefit Plan, the parties shall cooperate in good faith to give effect to the terms of this Agreement, to the maximum extent practicable.

ARTICLE VII

GENERAL PROVISIONS

7.01 Preservation of Rights of Plan Sponsors; No Third Party Beneficiaries or Rights. The parties hereto acknowledge and agree that the provisions of this Agreement represent the obligations between the parties to this Agreement only and shall not be construed to (i) establish, amend or modify any benefit plan, program, agreement or arrangement maintained by any of them; (ii) alter or limit the ability of the parties, as sponsors or adopting employers of any employee benefit plan, to amend, modify or terminate any benefit plan, program, agreement or arrangement at any time assumed, established, sponsored or maintained by any of them; (iii) confer upon any person any right to employment or continued employment for any period of time by reason of this Agreement, or any right to a particular term or condition of employment; or (iv) confer upon any person any other rights as a third-party beneficiary of this Agreement.

16

7.02 Administrative Complaints/Litigation.

(a) After the Distribution Time, the Generico Parties shall assume, and be jointly and severally liable for, the handling, administration, investigation, defense and settlement or other resolution of actions, including, without limitation, regarding ERISA, occupational safety and health, employment standards, wage and hour claims, withholding matters, union grievances, wrongful dismissal, discrimination or human rights and unemployment compensation claims, asserted at any time against the Alpha Group or the Generico Group by any of the Generico Personnel or any other person (including any Governmental Entity) arising out of or relating to employment of any Generico Personnel (or any person who after the Distribution Time becomes an employee of a member of the Generico Group, solely with respect to his or her employment after the Distribution Time) with the Generico Business or Generico or the compensation and/or employee benefits of the Generico Personnel. Any Liabilities arising from such actions shall be deemed Generico Liabilities under the Separation and Distribution Agreement; provided that, notwithstanding anything herein to the contrary, nothing in this Agreement will be deemed to cause the Generico Parties to assume or become responsible for any Excluded Liabilities (as defined in the Separation and Distribution Agreement) described in Section 3.01(f)(i), (v) or (vii) of the Separation and Distribution Agreement.

(b) The Alpha Parties shall retain, or after the Distribution Time shall assume, as applicable, and be jointly and severally liable for, the handling, administration, investigation, and defense and settlement or other resolution of actions, including, without limitation, regarding ERISA, occupational safety and health, employment standards, wage and hour claims, withholding matters, union grievances, wrongful dismissal, discrimination or human rights and unemployment compensation claims, asserted at any time against the Generico Group or the Alpha Group by any of the Alpha Personnel or any other person (including any Governmental Entity) arising out of or relating to employment of any Alpha Personnel (or any person who after the Distribution Time becomes an employee of a member of the Alpha Group, solely with respect to his or her employment after the Distribution Time) with the Alpha Business or Alpha or the compensation and/or employee benefits of the Alpha Personnel. Any Liabilities arising from such actions shall be deemed Alpha Liabilities under the Separation and Distribution Agreement.

7.03 Reimbursement and Indemnification. The parties hereto agree to reimburse one another, within 30 days of receipt from another party of appropriate verification, for all Indemnifiable Losses that each may incur on behalf of the other as a result of any of the Benefit Plans or any of the termination or severance obligations set forth in Section 2.02. All Liabilities retained, assumed or indemnified against by the Generico Parties pursuant to this Agreement shall be deemed Generico Liabilities, and all Liabilities retained, assumed or indemnified against by the Alpha Parties pursuant to this Agreement shall be deemed Alpha Liabilities, and in each case shall be subject to the indemnification provisions of Article IV of the Separation and Distribution Agreement.

17

7.04 Payment of and Accounting Treatment for Expenses. Except as specifically provided in the Separation and Distribution Agreement or as the Generico Parties and the Alpha Parties otherwise mutually agree, all expenses (and the accounting treatment related thereto) through the Distribution Time regarding matters addressed herein shall be handled and administered in accordance with Alpha’s historical accounting and financial practices and procedures pertaining to such matters.

7.05 Sharing of Participant Information. New Alpha and Generico shall share, New Alpha shall cause each applicable member of the Alpha Group to share, and Generico shall cause each applicable member of the Generico Group to share, with each other and their respective agents and vendors (to the extent permitted by Applicable Law) all participant information necessary for the efficient and accurate administration of each of the Benefit Plans sponsored or maintained by any member of the Alpha Group and the Benefit Plans sponsored or maintained by any member of the Generico Group following the Distribution Time. New Alpha and Generico and their respective authorized agents shall, subject to Applicable Laws and understandings regarding confidentiality, be given reasonable and timely access to, and may make copies of, all information relating to the subjects of this Agreement in the custody of the other party, to the extent necessary for such administration, in each case without application of any limitation or restriction set forth in Article VI of the Separation and Distribution Agreement. Generico and New Alpha shall also cooperate to share all such information regarding any issue relating to the compensation of the Generico Personnel as may be required in order to satisfy any requirements related to federal, state and/or local income tax reporting (including, for purposes of preparing a Form W-2 for each such employee) and withholding, all in accordance with the terms of the Tax Allocation Agreement.

7.06 Relationship of Parties. Nothing in this Agreement shall be deemed or construed by the parties or any third party as creating the relationship of principal and agent, partnership or joint venture between the parties, it being understood and agreed that no provision contained herein, and no act of the parties, shall be deemed to create any relationship between the parties other than the relationship set forth herein.

7.07 Cooperation. The Alpha Parties and the Generico Parties shall each cooperate in good faith, including by making personnel available to one another at mutually agreed times, as necessary or appropriate to carry out the purposes of this Agreement.

7.08 No Duplication of Benefits. It is the intention of the parties that nothing in this Agreement shall allow for any of the Generico Personnel or Alpha Personnel to receive duplicative benefits. Accordingly, notwithstanding any other provision of this Agreement, New Alpha, LLC and Generico shall agree on methods and procedures to prevent the Generico Personnel and the Alpha Personnel from receiving duplicative benefits.

ARTICLE VIII

MISCELLANEOUS

8.01 Entire Agreement. This Agreement, the Separation and Distribution Agreement and other Transaction Agreements (as defined in the Separation and Distribution Agreement), including any annexes, schedules and exhibits hereto or thereto, and other agreements and documents referred to herein and therein, will together constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and will supersede all prior negotiations, agreements and understandings of the parties of any nature, whether oral or written, with respect to such subject matter.

18

8.02 Survival of Agreements. Except as specifically contemplated by this Agreement, all covenants and agreements of the parties contained in this Agreement will remain in full force and effect and survive the Distribution Time.

8.03 Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware (without giving effect to choice of law principles thereof).

8.04 Notices. Notices to the parties hereunder shall be provided in accordance with Section 8.04 of the Separation and Distribution Agreement.

8.05 Incorporation by Reference. Sections 8.06 through 8.20 of the Separation and Distribution Agreement are hereby incorporated by reference into this Agreement and shall apply to this Agreement as if set forth herein in full.

19

IN WITNESS WHEREOF, the parties have caused this Employee Matters Agreement to be executed in their names by a duly authorized officer as of the date first written above.

APP PHARMACEUTICALS, INC.
By:	/s/ Patrick Soon-Shiong
	Name:	Patrick Soon-Shiong
	Title:	CEO

APP PHARMACEUTICALS, LLC
By:	/s/ Patrick Soon-Shiong
	Name:	Patrick Soon-Shiong
	Title:	CEO

ABRAXIS BIOSCIENCE, LLC
By:	/s/ Patrick Soon-Shiong
	Name:	Patrick Soon-Shiong
	Title:	CEO

NEW ABRAXIS, INC.
By:	/s/ Patrick Soon-Shiong
	Name:	Patrick Soon-Shiong
	Title:	CEO

EX-10.5

Exhibit 10.5

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

EXECUTION COPY

MANUFACTURING AGREEMENT

BETWEEN

NEW ABRAXIS, INC.

(TO BE RENAMED ABRAXIS BIOSCIENCE, INC.)

AND

APP PHARMACEUTICALS, LLC

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

MANUFACTURING AGREEMENT

THIS MANUFACTURING AGREEMENT (this “Agreement”) is made by and between New Abraxis, Inc., to be renamed Abraxis BioScience, Inc., a Delaware corporation (“NEW ALPHA”), and APP Pharmaceuticals, LLC, a Delaware limited liability company (“GENERICO”), as of this 13 day of November, 2007 (the “Effective Date”).

RECITALS

A. NEW ALPHA or one or more its subsidiaries has developed and owns the rights to the Product and the Pipeline Products (both as defined below).

B. GENERICO has the capabilities, facilities and equipment designed for and capable of performing the Generico Manufacturing (as defined below) with respect to the Product and the Pipeline Products, and GENERICO desires to perform such Generico Manufacturing upon the terms and conditions contained herein.

AGREEMENT

NOW, THEREFORE, in consideration of the above Recitals, 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 hereby agree as follows:

1. Definitions. For purposes of this Agreement, in addition to other defined terms set forth in this Agreement, the terms set forth below will have the following meanings:

1.1 “Action” means any actual or threatened claim, suit, demand, arbitration, hearing, inquiry, proceeding, complaint, charge or investigation by or before any court, Regulatory Authority or arbitrator.

1.2 “Affiliate” means, with respect to any Person, any entity controlling, controlled by or under the common control of such Person. Such entity will be considered an Affiliate only for the time during which such control exists. For the purpose of this Agreement, “control” (together with its correlative meanings “controlled by” or “under common control with”) means having, directly or indirectly, the power to direct or cause the direction of management and policies of such entity. For purposes of this Agreement, none of Gholdco or any of its subsidiaries, including GENERICO, shall be considered an affiliate of NEW ALPHA or any of its subsidiaries, and none of NEW ALPHA or any of its subsidiaries shall be considered an affiliate of Gholdco or any of its subsidiaries, including GENERICO.

1.3 “Alternative Compensation Amount” has the meaning set forth in Section 2.8(B).

1.4 “Annual Forecasts” means, for 2008, the annual forecasts of the aggregate units of Product and Pipeline Products to be supplied by GENERICO from each Facility that are attached as Part A of Schedule 1.4 hereto, and for subsequent years, the annual forecasts of the aggregate units of Product and Pipeline Products from each Facility provided by NEW ALPHA to GENERICO at

1

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

least thirty (30) days prior to January 1 of that year; provided, however, that the forecasts provided by NEW ALPHA with respect to each year subsequent to 2008 shall not, without the approval of GENERICO (which approval shall not be unreasonably be withheld or delayed), provide for the supply of Product and Pipeline Products from any Facility that is more than (***) of the aggregate units to be supplied from that Facility reflected in the estimates for 2009, 2010, 2011 and 2012 as set forth in Part B of Schedule 1.4. The 2009, 2010, 2011 and 2012 estimates shall not become “Annual Forecasts” for purposes hereof until provided by NEW ALPHA under the terms of this Agreement.

1.5 “Breach” has the meaning set forth in Section 10.2.

1.6 “cGMP(s)” means current good manufacturing practices established under the FDCA and the regulations promulgated thereunder; and other comparable laws and regulations of any competent Regulatory Authorities applicable to manufacturing activities or the Facility for the Product and Pipeline Products, all as amended from time to time.

1.7 “Chemical Ingredients” means, with respect to the Product or any Pipeline Product, the active pharmaceutical ingredient(s) and human albumin in the Product or Pipeline Product, as applicable.

1.8 “Chemical Solution” means end product obtained after New Alpha Manufacturing (other than the New Alpha Review and Release) is complete with respect to the Product or any Pipeline Product.

1.9 “Chemical Testing” means in-process testing of the chemical properties of the Product or any Pipeline Product during the process of manufacturing Product or any Pipeline Product.

1.10 “Claim Notice” has the meaning set forth in Section 12.3.

1.11 “Competitor” means (***).

1.12 “Components” means all containers, closures, packaging components, labels and labeling necessary for the manufacture of the Product or any Pipeline Product as finished goods.

1.13 “Damages” means any and all losses, liabilities, obligations, costs, expenses, damages or judgments of any kind or nature whatsoever (including reasonable attorneys’, accountants’ and experts’ fees, disbursements of counsel and other costs and expenses).

1.14 “EMEA” means the European Medicines Evaluation Agency or any successor agency.

1.15 “Effective Date” means the date written in the preamble of this Agreement, as set forth above.

1.16 “Estimated Generico Manufacturing Plan” means NEW ALPHA’s estimate of the units of the Product with respect to which NEW ALPHA will place Purchase Orders during each month of each rolling 12-month period during the Term, which estimate will be delivered by NEW ALPHA to GENERICO on a monthly basis; provided, however, that in no event will a given monthly

2

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

estimate vary by more than (***) from the monthly estimate issued in respect of the immediately preceding month. The Estimated Generico Manufacturing Plan shall include, with respect to the Product, NEW ALPHA’s estimated requirements for commercial sale, clinical supply, validation, stability or other uses thereof, and for Generico Manufacturing at each Facility, during each month of the applicable rolling 12-month basis.

1.17 “Facility” means (i) the Melrose Park Facility and (ii) the Grand Island Facility.

1.18 “FDA” means the United States Food and Drug Administration or any other successor agency of the United States Federal Government.

1.19 “FDA Modernization Plan” has the meaning set forth in Section 14.1(A).

1.20 “FDCA” means the Federal Food, Drug, and Cosmetic Act (21 U.S.C. Section 301 et. seq.), as amended from time to time.

1.21 “Force Majeure” has the meaning set forth in Section 15.4(A).

1.22 “GENERICO Indemnified Parties” has the meaning set forth in Section 12.2.

1.23 “Generico Manufacture,” “Generico Manufactured” and “Generico Manufacturing” means the acquisition, sampling, testing and release of Components, the acquisition and sampling of Materials and testing of Materials supplied by GENERICO such as water for injection (“WFI”) and nitrogen, the sampling of Chemical Ingredients and the manufacturing, lyophilization, packaging, labeling, filling, holding, Microbiologic Testing of the Product and Pipeline Products as more fully set forth on Exhibit A. For the avoidance of doubt, Generico Manufacturing does not include New Alpha Manufacturing.

1.24 “Generico Products” means all of the existing products being manufactured by GENERICO from time to time, including any variations of such products in formulation, dosage, delivery system, or the like (but, for the avoidance of doubt, in no event will the Generico Products include any product incorporating “nab” technology).

1.25 “Gholdco” means Abraxis BioScience, Inc. (formerly known as Generico Holdings, Inc. and to be renamed APP Pharmaceuticals, Inc.), a Delaware corporation and the parent company of GENERICO.

1.26 “Grand Island Facility” means GENERICO’s manufacturing facility(s) whether owned or leased located at 3159 Staley Road, Grand Island, New York.

1.27 “Grand Island Lease” has the meaning set forth in Section 10.1.

1.28 “HPFB” means the Health Products and Food Branch of Health Canada or any successor agency of the Canadian government.

1.29 “IHI” means the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use or any successor thereto.

3

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

1.30 “Indemnifiable Claim” has the meaning set forth in Section 12.3.

1.31 “Indemnified Party” has the meaning set forth in Section 12.3.

1.32 “Indemnifying Party” has the meaning set forth in Section 12.3.

1.33 “Legal Requirement” means any federal, state or local law, ordinance, regulation, permit, order, writ, judgment, injunction, decree or award, or any rule, regulation or published guidelines or any statement having the effect of law, promulgated by any Regulatory Authority, including cGMPs.

1.34 “Management Fee” has the meaning set forth in Section 13.

1.35 “Materials” means, with respect to the Product or any Pipeline Product, all inactive raw materials and excipients, excluding human albumin, used in the formulation of the Product or any Pipeline Product necessary for their manufacture as finished goods.

1.36 “Melrose Park EU Plan” has the meaning set forth in Section 14.2(A).

1.37 “Melrose Park Facility” means GENERICO’s manufacturing facility(s) whether owned or leased located at 2020 Ruby Street, Melrose Park, Illinois.

1.38 “Melrose Park Lease” has the meaning set forth in Section 10.1.

1.39 “MHLW” means Japan’s ministry of Health, Labor and Welfare (also known as “Korosho”) or any successor agency of the government of Japan.

1.40 “MOHFW” means India’s ministry of Health & Family Welfare or any successor agency.

1.41 “Microbiologic Testing” means the microbiologic testing of the Product or any Pipeline Product, as applicable, at the beginning of Generico Manufacturing and at the completion of Generico Manufacturing.

1.42 “New Alpha Manufacture,” “New Alpha Manufactured” and “New Alpha Manufacturing” means the acquisition, testing and release of Chemical Ingredients, the testing and release of Materials (other than Materials supplied by GENERICO such as WFI and nitrogen) and subsequent formulating, compounding and Chemical Testing of the Product or any Pipeline Products as more fully set forth on Exhibit A, and the New Alpha Review and Release.

1.43 “New Alpha Review and Release” means the supervision and signoff contemplated by Section 2.9 of this Agreement and the written release of the Product or any Pipeline Product, as applicable, following the completion of the Generico Manufacturing with respect thereto.

1.44 “Parties” means GENERICO and NEW ALPHA (“Party” meaning one of the Parties).

4

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

1.45 “Person” means any natural person, corporation, partnership, limited partnership, limited liability company, proprietorship, other business organization, trust, union, association or Regulatory Authority.

1.46 “Pipeline Products” means (A) ABI-008, ABI-009, ABI-010 and ABI-011 and (B) other products as identified by NEW ALPHA that GENERICO is reasonably capable of performing Generico Manufacturing at one or both of the Facilities, and (***) and G-CSF (granulocyte-colony stimulating factor). Each of the Pipeline Products in clauses (A) and (B) shall either (x) involve substantially the same Generico Manufacturing steps, time and resources as the Product or (y) shall (i) not require any material addition, upgrade or modification to any GENERICO Facility (except where such addition, upgrade or modification would not otherwise have one of the effects described in clauses (ii) and (iii) below, and NEW ALPHA agrees to reimburse GENERICO in accordance with the last sentence of this Section 1.46 in respect thereof), (ii) not require any reallocation or diversion in any material respect of employees, space or other resources of GENERICO and (iii) not otherwise impair or disrupt in any material respect the ability of GENERICO to conduct its business or perform its obligations under this Agreement. NEW ALPHA shall reimburse GENERICO for all incremental costs reasonably incurred by GENERICO and paid to third parties (with the approval of NEW ALPHA not to be unreasonably withheld) as a result of GENERICO manufacturing any Pipeline Products described in clauses (A) and (B).

1.47 “Product” means ABRAXANE^®, a cremapahor-free pacilitaxel formulation, and any modifications thereto made by NEW ALPHA, subject to Section 2.2(G), and provided that, as modified, the product remains an injectible formulation of paclitaxel.

1.48 “Product Liability Costs” has the meaning set forth in Section 9.6.

1.49 “Product Liability Claim” means any Action by a third party and any appeal from any Action asserted by a third party with respect to the Product or any Pipeline Product alleging product liability, product defect, design, manufacturing, packaging or labeling defect, failure to warn, or any similar action relating to the formulation, manufacture, use or safety of the Product or any Pipeline Product, as applicable.

1.50 “Projected Cycle Time” means, for any year, (i) with respect to NEW ALPHA, the projected lyophilizer cycle time required by NEW ALPHA for that year based on the most recent Annual Forecast determined without giving effect to the permitted (***) increase in the definition of Annual Forecast or the (***) increase permitted in Section 2.6 (i.e., not more than estimated in Schedule 1.4), and (ii) with respect to GENERICO, the projected lyophilizer cycle time required by GENERICO for that year based on the production forecasts for that year attached as part of Schedule 1.4 hereof.

1.51 “Proprietary Information” means all information relating to the Product or any Pipeline Product, as applicable, concerning the properties, composition or structure of the Product or any Pipeline Product, as applicable, the New Alpha Manufacturing of the Product or any Pipeline Product, as applicable, or the machines used to New Alpha Manufacture the Product or any Pipeline Product, as applicable, the development, marketing or other commercialization of the Product or any Pipeline Product, as applicable, (including, without limitation, reagents, computer programs, algorithms, analytical methodology, suppliers of ingredients and

5

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

equipment, names and expertise of employees and consultants, know-how, formulas, processes, ideas, inventions, whether patentable or not, schematics and other technical, business, financial, customer and product development plans, forecasts, strategies and information relating to the Product and the Pipeline Products), whether previously, currently or subsequently disclosed to the other Party. Technology, innovations, improvements and modifications relating to the Product or any Pipeline Product or made by or for NEW ALPHA or any of its subsidiaries will be considered Proprietary Information of NEW ALPHA.

1.52 “Proprietary Rights” means any and all patent rights, copyrights, mask work, trade secret rights and all other intellectual and industrial property rights.

1.53 “Proration Percentage” means, for any year, with respect to a Party, a fraction expressed as a percentage, the numerator of which is such Party’s Projected Cycle Time for such year and the denominator of which is the aggregate Projected Cycle Time of both Parties for such year.

1.54 “Proration Period” has the meaning set forth in Section 2.7(A).

1.55 “Purchase Order” means written orders for a quantity of the Product or a number of batches of any Pipeline Product issued by NEW ALPHA and placed with GENERICO. Each Purchase Order shall separately identify whether the Product or Pipeline Products subject to such Purchase Order are for commercial sale, clinical supply, validation, stability or other uses, and shall indicate the Facility at which the Generico Manufacturing shall occur, if applicable, and the Territory in which such quantities will be sold or used for clinical testing; provided, however, that such Purchase Order shall be in accordance with the applicable Estimated Generico Manufacturing Plan as set forth in Section 2.6.

1.56 “Reasonable Efforts” means a reasonable sustained, continued and active application of diligent efforts, resources and urgency consistent with the manner in which such efforts were provided by New Abraxis, LLC (and its predecessor Abraxis BioScience, Inc.) and their subsidiaries prior to the Effective Date (but not including any historical preference or priority given to the Product as compared with GENERICO’s pharmaceutical products), and no less than the efforts, urgency and resources commonly used by GENERICO in manufacturing for its own business.

1.57 “Recall” has the meaning set forth in Section 8.1.

1.58 “Regulatory Approval” means (i) with respect to GENERICO, any and all actions required by a Regulatory Authority for the manufacture of the Product in the Territory, and (ii) with respect to NEW ALPHA, the filing and procurement of any registration, permit and approval required by applicable Regulatory Authorities for the importation, marketing, sale, distribution and use of the Product in the Territory.

1.59 “Regulatory Authority” means (i) the FDA, (ii) with respect to the Grand Island Facility, the FDA and the EMEA, and (iii) subject to Section 2.2(C), the TGA, the MHLW, the MOHFW, the IHI and any other national, multinational, federal, state, provincial or local regulatory agency, department, bureau or other governmental entity in the Territory that has regulatory authority over the Product or any Pipeline Product.

6

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

1.60 “Rejected Product” means batches of Product or Pipeline Product which are either (i) lost in production (or are not in compliance with the applicable Specifications, cGMPs, the FDCA and any other applicable Legal Requirements) as a result of the Generico Manufacturing or New Alpha Manufacturing or a failure or deficiency of the Generico Manufacturing or New Alpha Manufacturing, or (ii) determined by final decision of NEW ALPHA’s or GENERICO’s quality group not to be suitable for final release.

1.61 “Specifications” means the description and attributes, Chemical Ingredients, Components and Materials for the Product or any Pipeline Product, along with manufacturing procedures for such Product. Specifications exclude NEW ALPHA Proprietary Information. The Specifications include without limitation:

(A) sampling requirements (including lab and microbiological);

(B) intermediate specifications;

(C) processing aids;

(D) finished Product release criteria;

(E) stability specifications;

(F) Microbiologic Testing methods; and

(G) packaging, labels and labeling.

1.62 “Supply Deficit Period” has the meaning set forth in Section 2.8(A).

1.63 “Technology” means any and all ideas, techniques, inventions, methods, data, information, formulae, processes, trade secrets, analytical methodology, intellectual property, know-how, and test results, whether patentable or not, and whether or not reduced to practice, including Proprietary Rights, owned, controlled or otherwise in possession of or used by NEW ALPHA as of the Effective Date, or during the Term and necessary or useful to make, have made, develop, have developed, use, import, market, offer for sale or sell the Product or any Pipeline Product.

1.64 “Term” has the meaning set forth in Section 10.1.

1.65 “TGA” means the Therapeutic Goods Administration, Department of Health and Ageing, Australia.

1.66 “Territory” means (***).

7

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

1.67 “Warehouse Services Agreement” means the Warehouse Services Agreement, dated as of the Effective Date, between New Abraxis, LLC and Generico, as it may be amended from time to time.

2. Generico Manufacturing and Other Services.

2.1 Subject to the terms, conditions and provisions of this Agreement, GENERICO hereby covenants and agrees that during the Term it will perform the Generico Manufacturing with respect to the Product and the Pipeline Products as requested by NEW ALPHA in accordance with the terms hereof. GENERICO will perform the Generico Manufacturing with respect to the Product and the Pipeline Products solely and exclusively for NEW ALPHA and its designees.

2.2 GENERICO will, in good faith, use Reasonable Efforts to:

(A) obtain and maintain such approvals and licenses as may be required by any Regulatory Authority or Legal Requirement for the manufacturing at the Facilities of the Product or any Pipeline Product for commercial sale or clinical development in the United States and its territories and possessions; without limiting the foregoing, GENERICO shall use Reasonable Efforts to obtain as promptly as practicable such approvals and licenses as may be required by any Regulatory Authority or Legal Requirement for the manufacturing of the Product for commercial sale in the United States on Line 6 of the Grand Island Facility; provided, however, that nothing in this sub-clause (A) shall be interpreted to require GENERICO to obtain any Regulatory Approvals for which NEW ALPHA is responsible pursuant to Section 2.3;

(B) obtain and maintain such approvals and licenses as may be required by any Regulatory Authority or Legal Requirement for the manufacturing at the Grand Island Facility of the Product or any Pipeline Product for commercial sale or clinical development in the territories of the European Union; provided, however, that nothing in this sub-clause (B) shall be interpreted to require GENERICO to obtain any Regulatory Approvals for which NEW ALPHA is responsible pursuant to Section 2.3;

(C) obtain and maintain such approvals and licenses as may be required by any Regulatory Authority or Legal Requirement for the manufacturing at the Grand Island Facility or Melrose Park Facility of the Product or any Pipeline Product for commercial sale or clinical development in other jurisdictions as shall be reasonably requested by NEW ALPHA; provided, however, that nothing in this Section 2.2(C) shall require GENERICO to obtain any such approvals or licenses in any jurisdiction unless both (a) doing so would not require (i) any material addition, upgrade or modification to any Facility (except where such addition, upgrade or modification would not otherwise have one of the effects described in clauses (ii) and (iii) below, and NEW ALPHA agrees to reimburse GENERICO in accordance with clause (b) below in respect thereof), (ii) would not require any reallocation or diversion in any material respect of employees, space or other resources of GENERICO and (iii) would not otherwise impair or disrupt in any material respect the ability of GENERICO to conduct its business or perform its obligations under this Agreement, and (b) NEW ALPHA agrees to reimburse GENERICO for all incremental costs reasonably incurred by GENERICO and paid to third parties (with the approval of NEW ALPHA not to be unreasonably withheld) as a result of obtaining any such approvals or licenses; and provided further that nothing in this sub-clause (C) shall be interpreted to require GENERICO to obtain any Regulatory Approvals for which NEW ALPHA is responsible pursuant to Section 2.3;

8

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

(D) maintain such facilities, resources and personnel, and such industry expertise, as may be required for it to manufacture such units or batches of the Product and any Pipeline Product as may be required hereunder and GENERICO will inform NEW ALPHA of any planned modifications of GENERICO’s facilities, equipment and processes, prior to implementation, that could result in the need for any additional Regulatory Approvals with respect to the Product or any Pipeline Product (such notice to be in writing and with sufficient time to obtain any necessary Regulatory Approvals), and GENERICO and NEW ALPHA will reasonably agree on the manner and timing of such modifications;

(E) perform the Generico Manufacturing in compliance with the terms and conditions of this Agreement, the Specifications, cGMPs, the FDCA and any and all other applicable Legal Requirements, and promptly provide NEW ALPHA with copies of any correspondence, including inspection reports, from Regulatory Authorities concerning GENERICO’s operation of the Facilities which could have any bearing in a material respect upon this Agreement together with any responses thereto;

(F) implement, as soon as reasonably possible, any change or modification to the manufacture or Specifications of the Product or any Pipeline Product that are required or recommended by any Regulatory Authority or required by cGMPs or Legal Requirements; provided, however, that NEW ALPHA shall reimburse GENERICO for the reasonable out-of-pocket expenses incurred by GENERICO (with the approval of NEW ALPHA not to be unreasonably withheld) as a result of such change or modification to the extent that such change would not be necessary but for the manufacturing of the Product or the Pipeline Products;

(G) implement, as soon as reasonably possible, any change or modification to the manufacture or Specifications of the Product or any Pipeline Product that are requested by NEW ALPHA; provided, however, that nothing in this Section 2.2(G) shall require GENERICO to implement any such change or modification unless both (a) doing so would not require (i) any material addition, upgrade or modification to any Facility (except where such addition, upgrade, or modification would not otherwise have one of the effects described in clauses (ii) and (iii) below, and NEW ALPHA agrees to reimburse GENERICO in accordance with clause (b) below in respect thereof), (ii) would not require any reallocation or diversion in any material respect of employees, space or other resources of GENERICO and (iii) would not otherwise impair or disrupt in any material respect the ability of GENERICO to conduct its business or perform its obligations under this Agreement, and (b) NEW ALPHA agrees to reimburse GENERICO for all incremental costs reasonably incurred by GENERICO and paid to third parties (with the consent of NEW ALPHA not to be unreasonably withheld) as a result of any such change or modification;

(H) keep true, accurate and complete books, records, reports and accounts in connection with or relative to the Product and each Pipeline Product, and the Generico Manufacturing of the Product and the Pipeline Products, as well as any other books and records as may be required from time to time by Legal Requirements;

9

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

(I) maintain batch records sufficient to trace the history of each batch, and representative samples from each batch of Product and Pipeline Product manufactured hereunder, for record keeping, stability testing and other regulatory purposes in accordance with the Specifications and Legal Requirements;

(J) during the process of Generico Manufacturing, allow NEW ALPHA to undertake any Chemical Testing and other quality control measures reasonably requested by NEW ALPHA in order to comply with the Specifications and requirements of any Regulatory Authority; and

(K) maintain each Facility in good working order and within cGMPs (e.g., qualification, calibration, maintenance, validation), including critical systems (e.g., WFI, HVAC, clean steam, compressed gasses, etc.); and

(L) maintain all manufacturing equipment (other than dedicated nanotechnology equipment) in good working order and within cGMPs (e.g., qualification, calibration, maintenance, validation).

2.3 NEW ALPHA or its licensees or designees will be solely responsible for obtaining and maintaining compliance with any Regulatory Approvals relating to the importation, marketing, sale, clinical testing, distribution and use of the Product or any Pipeline Product.

2.4 NEW ALPHA, or any designee of NEW ALPHA, will have the right at any time upon prior reasonable notice and during regular business hours to inspect and examine the parts of the Facilities used in connection with and relative to the Product and the Pipeline Products and the Generico Manufacturing. Any such inspection or examination shall be scheduled at such time and conducted in such manner as to minimize disruption to GENERICO’s normal operations.

2.5 NEW ALPHA will have the right, upon prior reasonable notice and during regular business hours, to audit and inspect any and all documents and records related to (A) GENERICO’s manufacture and supply of the Product and the Pipeline Products and (B) GENERICO’s performance under this Agreement, including GENERICO’s costs or expenses for which it is entitled to reimbursement hereunder. GENERICO will also permit representatives of any Regulatory Authority, including, but not limited to, the FDA or its agents, to visit and inspect any and all facilities used in the Generico Manufacturing of the Product and the Pipeline Products. This right of NEW ALPHA and the Regulatory Authorities includes access to audit any and all documents and records relating to GENERICO’s performance under this Agreement.

2.6 On or promptly after the Effective Date and, thereafter, by the end of the first week of each month of the Term, NEW ALPHA will send to GENERICO an Estimated Generico Manufacturing Plan. The Parties acknowledge and agree that the Estimated Generico Manufacturing Plan is an estimate only and is not binding upon NEW ALPHA, except that the estimate for the next three

10

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

months shall be binding. GENERICO shall supply the quantity of the Product and Pipeline Products reflected in Purchase Orders provided by NEW ALPHA from a particular Facility for a given month to the extent that such Purchase Orders are for no more than (***) of the aggregate number of units of the Product from such Facility for such month reflected in the Estimated Generico Manufacturing Plan submitted at least ninety (90) days before the calendar month in which such Purchase Order is submitted. GENERICO shall not be obligated to supply the quantity of the Product or any Pipeline Product earlier than seventy five (75) days following the placement of the Purchase Order for the Product or any Pipeline Product. For the initial 90 days of this Agreement, GENERICO will supply the quantity of Product or Pipeline Product in accordance with orders placed by New Abraxis, LLC (or its predecessor Abraxis Bioscience, Inc.), which will, in accordance with the next sentence, be consistent with the Annual Forecast for 2008. GENERICO shall supply quantities of the Product and any Pipeline Product during any month of the Term in calendar year 2007 or 2008 in accordance with orders placed by New Abraxis, LLC (or its predecessors Abraxis Bioscience, Inc.) or Purchase Orders placed by NEW ALPHA as applicable; provided, that GENERICO shall not be obligated to supply units of Product and Pipeline Products from any Facility during any such month in excess of (***) of the aggregate units of Product from such Facility reflected in the Annual Forecast for 2008. GENERICO shall not be obligated to supply in any year from a Facility a quantity of units of the Product and Pipeline Products that exceeds by more than (***) the quantity of the Product indicated for such Facility in the Annual Forecast for such year. GENERICO shall, subject to Section 2.2 and this Section 2.6, use Reasonable Efforts to have the Generico Manufacturing with respect to quantities of the Product and Pipeline Products subject to a Purchase Order (or order referred to in the prior sentences) performed at the Facility specified in the applicable Purchase Order (or order referred to in the prior sentences) and otherwise in compliance with applicable Legal Requirements for the commercial sale or clinical testing of the Product or Pipeline Products in the Territory specified in the applicable Purchase Order; provided, however, that if the Facility specified in the applicable Purchase Order is the only Facility qualified to manufacture the Product or any Pipeline Product pursuant to applicable Legal Requirements and the rules of any applicable Regulatory Authority, then the Generico Manufacturing with respect thereto must be performed at the Facility specified in the Purchase Order. Until the Estimated Generico Manufacturing Plan is binding pursuant to this section, NEW ALPHA may substitute Product for any Pipeline Product (or Pipeline Product for Product) that is reflected on NEW ALPHA’s Annual Forecast or Estimated Generico Manufacturing Plan, subject to all of the limitations in this Agreement.

2.7 In the event of any capacity constraints at any Facility or if GENERICO reasonably anticipates that there will be capacity constraints at any Facility:

(A) GENERICO shall promptly notify NEW ALPHA in writing of any potential or actual capacity constraints, and GENERICO and NEW ALPHA shall promptly meet to discuss how to address such capacity constraints (the period during which such capacity constraints are reasonably anticipated to prevent satisfaction of all Purchase Orders for which GENERICO would otherwise be required to make delivery during such period, the “Proration Period”). At such meeting, GENERICO shall notify NEW ALPHA whether such capacity constraints will prevent GENERICO from satisfying Purchase Orders expected to be placed by NEW ALPHA pursuant to the current Estimated Generico Manufacturing Plan.

11

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

(B) In connection with manufacturing of the Product for delivery during the Proration Period, the lyophilizers and filling lines approved for manufacturing the Product located at the Facilities shall be allocated equitably between the Parties according to the Proration Percentage.

(C) GENERICO shall not in any event be responsible for any failure to manufacture Product due to capacity constraints so long as it complies with this Section 2.7 and uses Reasonable Efforts to eliminate, cure or overcome such capacity constraints and end the Proration Period as soon as reasonably practicable.

(D) If at any time the resources available for manufacturing under this Agreement (other than with respect to lyophilizer and filing line capacity) are less than the aggregate demand of both Parties, the resources that are available shall be allocated equitably between the Parties.

2.8 Notwithstanding Section 2.7, if during the Term of this Agreement:

(A) If as a result of capacity constraints and the application of the Proration Percentage in accordance with Section 2.7, GENERICO is not required, in accordance with Section 2.7, to deliver sufficient units of the Product to fulfill the production forecasts set forth in the Estimated Generico Manufacturing Plan during any Proration Period (such Proration Period, the “Supply Deficit Period”), NEW ALPHA may, at its sole option, elect to require GENERICO to manufacture and deliver additional units of the Product in an amount necessary to fulfill the production forecasts for such Supply Deficit Period.

(B) If NEW ALPHA so elects to have GENERICO manufacture and deliver additional Product during a Supply Deficit Period pursuant to Section 2.8(A), GENERICO shall be entitled to receive the following remuneration: After the end of each 90 day period during the Supply Deficit Period and at the end of the Supply Deficit Period, the Parties shall determine in good faith the amount of net profits attributable to the sale of Generico Products (determined in accordance with generally acceptable accepted accounting principles as consistently applied by GENERICO) that GENERICO would have realized (but did not realize) with respect to such 90-day or other period during the Supply Deficit Period had NEW ALPHA not exercised its option under Section 2.8(A), based on net profits attributable to the Generico Products realized by GENERICO during the most recent full fiscal quarter ending prior to the Supply Deficit Period, plus any penalties incurred by GENERICO under GENERICO’s customer contracts as a result of NEW ALPHA’s exercise of its option under Section 2.8(A) less (***) of the total amount charged to NEW ALPHA for the additional units of the Product manufactured during such Supply Deficit Period to fulfill the production forecasts. Within sixty (60) days after the mutual determination of such amount (the “Alternative Compensation Amount”), NEW ALPHA shall pay to GENERICO an amount equal to such Alternative Compensation Amount. GENERICO shall use commercially reasonable efforts to maximize profits attributable to Generico Products in any Supply Deficit Period and to minimize the Alternative Compensation Amount, including, without limitation, by using production capacity available to GENERICO to manufacture higher margin products and seeking to purchase Generico Products equal to the amount of any shortfall from third-party suppliers.

12

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

2.9 NEW ALPHA will provide, at its own cost, NEW ALPHA employees and personnel to supervise and approve in writing, each stage of the manufacturing process related to the manufacture of the Product and the Pipeline Products.

2.10 In addition to Generico Manufacturing, during the Term, GENERICO will provide NEW ALPHA the additional services listed on Schedule 2.10 in return by payment of NEW ALPHA of the amounts set forth on such Schedule 2.10 following receipt of an invoice from GENERICO. Invoices will be issued by GENERICO promptly after each month-end during the Term of this Agreement, and payment shall be made, net 30 days after receipt by NEW ALPHA of an invoice, so long as the invoice complies with the terms and conditions of this Agreement.

3. New Alpha Manufacturing.

3.1 NEW ALPHA will perform the New Alpha Manufacturing and will procure Chemical Ingredients and supply to GENERICO the Chemical Solution at an agreed schedule in amounts and times sufficient in order for GENERICO to meet its obligations under Section 2.

3.2 NEW ALPHA will for the New Alpha Manufacturing in good faith use Reasonable Efforts to:

(A) have such resources and personnel, and such industry expertise, as may be required for it to perform the New Alpha Manufacturing as required hereunder;

(B) perform the New Alpha Manufacturing in compliance with the terms and conditions of this Agreement, the Specifications, cGMPs, the FDCA and any and all other applicable Legal Requirements;

(C) keep true, accurate and complete books, records, reports and accounts in connection with the New Alpha Manufacturing as well as any other books and records as may be required from time to time by any applicable Legal Requirement;

(D) maintain all nanotechnology specific equipment in good working order and within cGMPs (e.g., qualification, calibration, maintenance, validation); and

(E) arrange for pickup and transportation of finished Product and Pipeline Products; provided, that, during the period in which the Warehouse Services Agreement is in effect, GENERICO will in good faith use Reasonable Efforts to arrange for such pickup and transportation.

3.3 Following completion of Generico Manufacturing, NEW ALPHA will perform Chemical Testing as required by applicable Legal Requirements. Section 6.1 shall govern release of any Product or Pipeline Product.

3.4 GENERICO, or any designee of GENERICO, will have the right at any time upon prior reasonable notice and during regular business hours to inspect and examine NEW ALPHA’s portions of the Facilities used in connection with and relative to the Product and the Pipeline Products and the New Alpha Manufacturing thereof. Any such inspection and examination shall be scheduled at such time and conducted in such manner as to minimize disruption to NEW ALPHA’s normal operations.

13

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

3.5 GENERICO will have the right, upon prior reasonable notice and during regular business hours, to audit and inspect any and all documents and records related to NEW ALPHA’s performance under this Agreement, including NEW ALPHA’s costs and expenses for which it is entitled to reimbursement hereunder. NEW ALPHA will also permit representatives of any Regulatory Authority, including, but not limited to, the FDA or its agents, to visit and inspect NEW ALPHA’s portions of the Facilities used in the New Alpha Manufacturing of the Product and the Pipeline Products. This right of GENERICO and the Regulatory Authorities includes access to audit any and all documents and records relating to NEW ALPHA’s performance under this Agreement. Sections 3.4 and 3.5 shall not be interpreted to require NEW ALPHA to provide or disclose any documents, records or other information to the extent constituting Proprietary Information.

3.6 NEW ALPHA shall, at its option (as determined in its sole discretion), perform New Alpha Manufacturing with respect to GENERICO’s products, pending products and products under development as requested from time to time by GENERICO. The scope, timing and cost for any such New Alpha Manufacturing shall be as agreed between NEW ALPHA and GENERICO (in their sole discretion).

4. Price and Payment.

4.1 With the issuance by NEW ALPHA of a Purchase Order, NEW ALPHA shall designate whether (and, as applicable, what portion of) the ordered Product shall be used for commercial sale, clinical supply, validation, stability or other uses, and each Purchase Order with respect to quantities of the Product that will be commercially sold, shall indicate the Facility at which the Generico Manufacturing shall occur and the Territory in which such quantities will be sold. The price per unit of the Product, and the price per batch of any Pipeline Product, to be charged by GENERICO with respect to each unit or batched delivered by GENERICO shall be as set forth in Schedule 4.1. The price of the Product and any Pipeline Product will not include delivery of the Product or Pipeline Product to NEW ALPHA or any of its distributors. The risk of loss of any Product will transfer FOB shipping point (i.e., GENERICO manufacturing Facility).

4.2 GENERICO will issue an invoice to NEW ALPHA for each Purchase Order, based upon and reflecting the applicable price. Invoices will be issued upon (i) written release of the Product or Pipeline Product by NEW ALPHA and (ii) delivery to NEW ALPHA’s common carrier for delivery. Payment shall be made, net 30 days after receipt by NEW ALPHA of an invoice, so long as the invoice complies with the terms and conditions of this Agreement. Notwithstanding the foregoing, payment with respect to Product or Pipeline Products that are Rejected Products shall be paid in accordance with Section 6.

14

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

5. Regulatory Approval.

5.1 GENERICO will use Reasonable Efforts to cooperate with NEW ALPHA and its licensees with respect to obtaining all Regulatory Approvals relating to the Product and the Pipeline Products in any Territory, subject to Section 2.2(C). Without limiting the foregoing, GENERICO will use Reasonable Efforts to provide NEW ALPHA with such data monitoring support and data analysis support related to manufacturing issues as NEW ALPHA may reasonably request. All data and information relating to such support with respect to the Product or any Pipeline Product will, if it relates solely to the Product or any Pipeline Product, be the exclusive property of NEW ALPHA and may be used by NEW ALPHA, at no cost to NEW ALPHA, in such manner as NEW ALPHA determines.

5.2 GENERICO will use Reasonable Efforts to assist NEW ALPHA in the preparation and submission of a chemistry, manufacturing and controls (CMC) section and plant master file or other regulatory documents to any Regulatory Authority as reasonably requested by NEW ALPHA. Notwithstanding anything to the contrary in this Section 5.2, all CMC information that relates solely to the Product or any Pipeline Product will be owned exclusively by, and will be the exclusive Proprietary Information of, NEW ALPHA and any CMC information not relating solely to the Product or any Pipeline Product will, to the extent relating to the Product or any Pipeline Product, be owned by NEW ALPHA and will be Proprietary Information of NEW ALPHA and may be used by GENERICO, at no cost to GENERICO, subject to Section 11 hereof, in connection with the requirements of any Regulatory Authority.

5.3 NEW ALPHA will use Reasonable Efforts to cooperate with GENERICO with respect to obtaining and maintaining all Regulatory Approvals relating to manufacturing of the Product and the Pipeline Products for commercial sale or clinical development in any Territory. Without limiting the foregoing, NEW ALPHA will use Reasonable Efforts to provide GENERICO with such data monitoring support and data analysis support related to the Generico Manufacturing of the Product and the Pipeline Products as GENERICO may reasonably request; provided, however, that nothing in this Section 5.3 shall be interpreted to require NEW ALPHA to provide or disclose any documents, records or other information that constitutes Proprietary Information. All data and information relating to such support with respect to the Product and any Pipeline Product will, to the extent it relates to the Product or any Pipeline Product, be the property of NEW ALPHA, and will be the Proprietary Information of NEW ALPHA, and any CMC information not relating solely to the Product or any Pipeline Product will, to the extent relating to the Product or any Pipeline Product, be owned by NEW ALPHA, and will be Proprietary Information of NEW ALPHA, and may be used by GENERICO, at no cost to GENERICO, subject to Section 11 hereof, in connection with the requirements of any Regulatory Authority.

6. Rejected Product.

6.1 NEW ALPHA will inspect pursuant to New Alpha Review and Release, and GENERICO will inspect pursuant to Generico Manufacturing, each batch of Product and Pipeline Product for compliance with the Specifications, cGMPs, the FDCA and any and all other applicable Legal Requirements. If after inspection of Product or Pipeline Product NEW ALPHA notifies GENERICO, or GENERICO notifies NEW ALPHA, that any Product or Pipeline Product is non-compliant, as determined by such Party’s testing and inspection of the Product or Pipeline Product, the Parties will in good faith attempt to mutually determine whether the failure of the Product or Pipeline Product, as applicable, to comply is a result of Generico Manufacturing or New Alpha Manufacturing and the provisions of Section 6.2 will apply; provided, however, that the provisions of Section 6.2 will not apply (and thus GENERICO will

15

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

have no responsibility or liability relating to any non-compliance) with respect to any Pipeline Products in clause (A) or (B) of such definition unless, in any quarter beginning with the first quarter ending after the Effective Date, (***) of such Pipeline Products are non-compliant; provided further, that Pipeline Products shall only be determined non-compliant if GENERICO fails to perform Generico Manufacturing according to the Specifications for such Pipeline Product provided by NEW ALPHA.

6.2 If the Parties are unable to mutually determine whether the failure of the Product or Pipeline Products to comply is a result of Generico Manufacturing or New Alpha Manufacturing within 60 days of the delivery of a rejection notice by either Party, such dispute will be resolved by an independent, FDA-approved testing organization or consultant of recognized repute within the U.S. pharmaceutical industry, to be mutually designated by the Parties, the designation of which will not be unreasonably withheld or delayed by either Party. To the extent the Parties are unable to agree on a testing organization or consultant, each Party will designate one such entity and those two entities will agree on a mutually acceptable testing entity. The testing entity of the Product shall determine the source of the non-compliance (i.e., Generico Manufacturing or New Alpha Manufacturing). Both Parties will provide the testing entity with such information as the testing entity reasonably requires in order to make such determination; provided, however, that either Party may, to the extent it deems necessary, withhold from the independent third party testing entity any Proprietary Information. Any determination by the independent third party testing entity will be final and binding upon the Parties. If the independent third party testing entity states that it is unable to make a determination as a result of NEW ALPHA’s or GENERICO’s, as applicable, decision to not disclose Proprietary Information, the non-compliance of the applicable Rejected Product will be deemed to have resulted from (A) New Alpha Manufacturing in the event NEW ALPHA is the non-disclosing Party or (B) Generico Manufacturing in the event GENERICO is the non-disclosing Party. If the independent third party testing entity’s determination is inconclusive, then the non-compliance of such Rejected Product will be deemed to have resulted 50% from New Alpha Manufacturing and 50% from Generico Manufacturing. NEW ALPHA shall have the final determination over the disposition of any Product or Pipeline Product; provided, that no Product or Pipeline Product shall be released if either Party has determined that such Product or Pipeline Product is non-compliant. The Parties agree to handle the costs associated with Rejected Product manufactured for NEW ALPHA as follows:

(A) To the extent that a Rejected Product is determined to be such as a result of the Generico Manufacturing or a failure or deficiency of the Generico Manufacturing, then GENERICO will replace the Rejected Product as promptly as practicable (if requested by NEW ALPHA) and, subject to clause (B) below, no payment shall be required to be made by NEW ALPHA in respect of such Rejected Product and any payment that may have been made shall, at NEW ALPHA’s election, be refunded by GENERICO within 30 days of such determination or credited to any amounts then owing by NEW ALPHA to GENERICO hereunder; provided, however, that GENERICO will not be obligated to replace and will not have any liability to NEW ALPHA in respect of the Rejected Product, unless the batches of the Rejected Product resulting from the Generico Manufacturing are more than (***) of the total batches of Product (or (***) of the total batches for Pipeline Products) manufactured for NEW ALPHA in any calendar year during the Term. To the extent the batches of Rejected Product exceed such (***) or (***), as applicable, GENERICO shall reimburse NEW ALPHA for the Chemical Ingredients and Materials used in the New Alpha Manufacturing of such excess Rejected Product.

16

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

(B) To the extent that Rejected Product is determined to be such as a result of the New Alpha Manufacturing or a failure or deficiency of the New Alpha Manufacturing, then GENERICO shall invoice NEW ALPHA for the Product or Pipeline Product within 30 days of such determination. Payment shall be made, net 30 days after receipt by NEW ALPHA of an invoice, so long as the invoice complies with the terms and conditions of this Agreement.

(C) In the event that the reason for the Rejected Product in part results from the Generico Manufacturing or a failure or deficiency of the Generico Manufacturing and in part from the New Alpha Manufacturing or a failure or deficiency of the New Alpha Manufacturing, then the costs of the Product or Pipeline Products, as applicable, shall be allocated in an equitable manner between the Parties.

7. Adverse Experience Reporting. Each Party will promptly report to the other Party any information of which it becomes aware concerning any adverse drug experience in connection with the use of the Product, including the incidence and the severity thereof. Each Party shall be responsible for reporting adverse experiences in accordance with applicable Legal Requirements; provided, however, that NEW ALPHA will bear all reasonable expenses incurred by GENERICO and NEW ALPHA in connection therewith. NEW ALPHA will provide to GENERICO copies of any reports submitted to the FDA and/or Regulatory Authority relating to any adverse drug experiences that are reasonably significant. GENERICO shall be responsible for receiving and documenting any complaint regarding the Product, as well as forwarding the complaint information to the applicable Facility quality unit and responding to the customer.

8. Recalls.

8.1 Each Party shall promptly notify the other if such Party believes that a recall, withdrawal or field correction (each, a “Recall”) of the Product or any Pipeline Product may be necessary or advisable.

8.2 NEW ALPHA shall be responsible for the Recall decision, notification of Regulatory Authorities, the Recall strategy and generation of the final Recall letter. During the period in which the Warehouse Services Agreement is in effect, if any, GENERICO will be responsible for executing the Recall, reconciling Product, preparing and submitting Recall status reports and termination requests to applicable Regulatory Authorities with respect to Recall of the Product and any Pipeline Product. Following termination of the Warehouse Services Agreement, NEW ALPHA will be responsible for all Recall activities with respect to Recall of the Product and any Pipeline Product that was not previously shipped from the Premises (as defined in the Warehouse Services Agreement) by GENERICO. In either case, NEW ALPHA shall (subject to Section 8.3) bear all expenses incurred by GENERICO (with the consent of NEW ALPHA not to be unreasonably withheld) and NEW ALPHA in connection with such Recall. Each of the Parties will reasonably cooperate with the other Party in connection with any Recall. Each Party will maintain complete and accurate Recall records relating to the Product or any Pipeline Product for any periods that are required by any Legal Requirements.

17

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

8.3 In the event that it is determined that any Product or Pipeline Product is recalled as a result of GENERICO’s gross negligence, bad faith, intentional misconduct or intentional breach of this Agreement, then GENERICO shall bear all of the costs and expenses of such Recall, including without limitation expenses related to communications and meetings with all required Regulatory Authorities, customer credits for recalled stock, the cost of notifying customers and costs associated with shipment of recalled Product or Pipeline Product from customers and shipment of an equal amount of replacement Product or Pipeline Product to those customers, subject to Sections 12.2 and 12.8. In the event that any Product or Pipeline Product is recalled other than as a result of GENERICO’s gross negligence, bad faith, intentional misconduct or intentional breach of this Agreement (or for which the liability would exceed the limitations set forth in Section 12.9), then NEW ALPHA shall bear all of the costs and expenses of such Recall, including without limitation expenses related to communications and meetings with all required Regulatory Authorities, expenses of replacement stock, the cost of notifying customers and costs associated with shipment of recalled Product or Pipeline Product from customers and shipment of an equal amount of replacement Product to those customers. In the event that the reason for any Recall of Product hereunder is in part the responsibility of GENERICO as described herein and in part the responsibility of NEW ALPHA as described herein, then the expenses shall be allocated in an equitable manner between the Parties.

8.4 If the Parties are unable to mutually agree on the source cause of the Recall within 5 days of the event causing the Recall, such dispute will be resolved in the same manner as set forth in Section 6.2. The fees and expenses of the testing entity making the determination will be paid by the Party against which the determination is made. NEW ALPHA shall have the final determination over the disposition of any Recalled Product.

9. Product Liability.

9.1 For so long as NEW ALPHA is commercially marketing and selling the Product, or conducting the New Alpha Manufacturing with respect to the Product or any Pipeline Product, it shall maintain product liability insurance with respect to the Product and the Pipeline Products, as applicable, with a reputable carrier, in the amounts set forth in Exhibit B, naming GENERICO and its Affiliates as additional insureds.

9.2 For so long as GENERICO is performing Generico Manufacturing with respect to the Product or any Pipeline Product, it shall maintain product liability insurance with respect to the Product and the Pipeline Products, with a reputable carrier, in the amounts set forth in Exhibit C hereto, naming NEW ALPHA and its Affiliates as additional insureds.

9.3 Each Party must notify the other Party as promptly as practicable if a Product Liability Claim is commenced or threatened against any Party. Each Party must cooperate with the other Party in connection with any Product Liability Claim that is commenced or threatened against the other Party.

9.4 If a Product Liability Claim is asserted against both Parties, each Party will have the right, at its own cost (subject to Section 9.6), to designate counsel to defend itself in such Product Liability Claim. If a Product Liability Claim is brought against one Party but not the other Party, the named Party will (subject to Section 9.5) have absolute control of litigation, except that:

(A) the other Party may appoint counsel to participate in the defense of such Product Liability Claim if the named Party reasonably determines that the participation would not adversely affect the attorney-client privilege; and

18

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

(B) if the litigation could reasonably be expected to have an adverse effect on the development and commercialization of the Product or any Pipeline Product, the named Party will consult with the other Party regarding the conduct of the litigation if the named Party reasonably determines that the cooperation would not adversely affect the attorney-client privilege.

9.5 Neither Party shall agree to a settlement of any Product Liability Claim without the consent of the other Party, in that other Party’s absolute discretion, if the settlement:

(A) admits any liability of the other Party or any of its Affiliates with respect to such Product Liability Claim;

(B) does not release the other Party and its Affiliates from all liabilities and obligations with respect to such Product Liability Claim; or

(C) imposes non-monetary damages or injunctive or other equitable relief against the other Party or any of its Affiliates.

9.6 NEW ALPHA will be solely responsible for any Damages payable by NEW ALPHA or GENERICO to third parties following final judgment or settlement of any Product Liability Claim arising from use or sales of the Product (collectively, “Product Liability Costs”), and must promptly pay or reimburse GENERICO if GENERICO pays or incurs any Product Liability Costs, subject to the immediately following sentence. GENERICO will be responsible for any Product Liability Costs to the extent they arise from or as a result of the negligence, bad faith, intentional misconduct or intentional breach of this Agreement by GENERICO, and must promptly pay or reimburse NEW ALPHA if NEW ALPHA pays or incurs any Product Liability Costs that arise from or relate to GENERICO’s gross negligence, bad faith, intentional misconduct or intentional breach of this Agreement, subject to Sections 12.2 and 12.8.

10. Term and Termination.

10.1 This Agreement will commence on the Effective Date and will continue through December 31, 2011 (the “Term”). The Term shall be automatically extended for an additional year until December 31, 2012 upon the occurrence of either (or both) of (i) GENERICO’S exercise of its option to extend the term of that certain Lease, dated as of the date hereof, between GENERICO and New Abraxis, LLC for the Melrose Park Facility (the “Melrose Park Lease”), so that the Melrose Park Lease expires on December 31, 2012 or (ii) New Abraxis, LLC’s exercise of its option to extend the term of that certain Lease, dated as of the date hereof, between GENERICO and New Abraxis, LLC for the Grand Island Facility (the “Grand Island Lease”), so that the Grand Island Lease expires on December 31, 2012.

10.2 The non-defaulting Party may terminate this Agreement if the other Party commits a material breach or default (“Breach”) under this Agreement, which Breach is not remedied within 60 days after the receipt of written notice of the Breach by the non-defaulting Party (except as to the payment of money by NEW ALPHA, for which the cure period will be 20 days) and which

19

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

Breach is continuing at the time of termination. Notwithstanding the foregoing, if the Breach is not curable in 60 days, and the breaching or defaulting Party in good faith notifies the other Party in writing prior to the 60 days that it is initiating cure of the Breach, and initiates cure of such Breach within 60 days and in good faith continues to attempt to cure the Breach, then this Agreement shall not be terminated pursuant to this Section 10.2. The right of a Party to terminate this Agreement provided in this Section 10.2 will not be affected in any way by its waiver of, or failure to take such action with respect to, any previous Breach.

10.3 This Agreement may be terminated immediately by either NEW ALPHA or GENERICO if the other Party:

(A) does not pay its debts generally as they become due, or is unable to pay its debts generally as they become due;

(B) has or has instituted against it any proceeding seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors;

(C) makes a general assignment for the benefit of creditors;

(D) seeks the entry of an order for relief or the appointment of a receiver, liquidator, sequestrator, trustee, custodian or similar official for it; or

(E) takes advantage of any other law or procedure for the protection of creditors.

10.4 Termination is not the sole remedy under this Agreement, and whether or not termination is effected, all other remedies remain available to each Party.

10.5 NEW ALPHA may terminate this Agreement for any reason at any time by giving GENERICO not less than 3 months prior written notice.

10.6 Upon termination or expiration of this Agreement for whatever reason, the Parties shall reasonably cooperate with each other to transfer to NEW ALPHA all Chemical Ingredients, Materials, Components, finished goods inventory, retained samples, stability samples and work in process in the possession, custody or control of GENERICO (and NEW ALPHA shall reimburse GENERICO for its reasonable expenses occurred in procuring and manufacturing such items) and GENERICO shall use Reasonable Efforts to cooperate with NEW ALPHA with respect to technology transfer matters for the Product and Pipeline Products.

11. Confidentiality.

11.1 Each Party recognizes that the other Party holds its Proprietary Information as important. In particular, each Party recognizes that the other Party’s Proprietary Information (and the confidential nature thereof) is critical to the other Party’s business and that neither Party would enter into this Agreement without assurance that such information and the value thereof will be protected as provided in this Section 11 and elsewhere in this Agreement.

20

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

11.2 Each Party must, therefore:

(A) hold the other Party’s Proprietary Information in confidence and take reasonable precautions to protect the Proprietary Information (including, without limitation, no less than all precautions that it employs with respect to its own confidential materials);

(B) except as required by law, regulation or legal process, not divulge (except pursuant to a sublicense expressly authorized in this Agreement) the other Party’s Proprietary Information or any information derived therefrom to any third person; provided, however, that if a Party is required to make any such disclosure of the other Party’s Proprietary Information, such Party shall give reasonable advance notice to the other Party of such required disclosure and will use reasonable efforts consistent with prudent business judgment to secure confidential treatment of such Proprietary Information prior to its disclosure (whether through protective orders or confidentiality agreements or otherwise); and provided, further that if GENERICO is required to disclose NEW ALPHA’s Proprietary Information that constitutes CMC information, GENERICO will provide NEW ALPHA with prompt written notice so that NEW ALPHA may seek, at NEW ALPHA’s expense, an appropriate protective order to avoid disclosure of such Proprietary Information. If NEW ALPHA has attempted and failed to obtain a protective order and GENERICO is, upon advice of its counsel, compelled to disclose Proprietary Information related to CMC information to prevent liability for contempt or other censure or penalty or other liability, GENERICO may disclose such portion of the Proprietary Information that is required to be disclosed, In such case, GENERICO will use Reasonable Efforts (at NEW ALPHA’s expense) so that confidential treatment will be accorded to any Proprietary Information so disclosed; and

(C) not make any use whatsoever at any time of the other Party’s Proprietary Information except for purposes of and expressly authorized in this Agreement.

11.3 Any employee or contractor given access to any Proprietary Information must have a legitimate “need to know” and must be bound in writing to maintain the confidence of information to which it is given access.

11.4 Without granting any right or license, the disclosing Party agrees that the foregoing restrictions will not apply with respect to information that the receiving Party is able to demonstrate by competent evidence:

(A) is in or (through no improper action or inaction by the receiving Party or any Affiliate of the receiving Party or their agents or employees) enters the public domain (and is readily available without substantial effort);

(B) was rightfully disclosed to it by another Person without restriction; or

(C) was independently developed by it by Persons without access to such information and without use of any of the disclosing Party’s Proprietary Information.

21

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

11.5 Each Party’s obligations under this Section 11 will terminate five years after the date of termination or expiration of this Agreement. The Parties recognize and acknowledge that prior to the Effective Date of this Agreement, each Party has received the other Party’s Proprietary Information and each hereby agrees to protect the Proprietary Information to the same extent as set forth in this Section 11.

11.6 Immediately upon termination or expiration of this Agreement, each Party will turn over to the other Party all Proprietary Information of the other Party and all documents or media containing any Proprietary Information and any and all copies or extracts thereof.

11.7 Each Party acknowledges and agrees that due to the unique nature of Proprietary Information, there may be no adequate remedy at law for any breach of a Party’s obligations under this Section 11, that any breach may result in irreparable harm to the disclosing Party, and therefore, that upon any breach or any threat of breach, the disclosing Party will be entitled to appropriate equitable relief (without the posting of any bond) in addition to whatever remedies it might have at law in connection with any breach or enforcement of the receiving Party’s obligations under this Agreement or the unauthorized use or release of any Proprietary Information.

11.8 GENERICO hereby acknowledges that it and its Affiliates do not have, and shall not acquire by virtue of this Agreement, any rights to or under any goodwill, trademark, tradename, copyright, patent or other intellectual property of NEW ALPHA or any of its Affiliates, nor in any of NEW ALPHA’s or its Affiliates’ trademarks or trade names appearing on the label or packaging materials of the Product or any of the Pipeline Products. GENERICO agrees to do nothing by act or omission which would impair NEW ALPHA’s or its Affiliates’ rights, ownership and title in the aforementioned.

11.9 NEW ALPHA hereby acknowledges that it does not have, and shall not acquire by virtue of this Agreement, any rights to or under any goodwill, trademark, tradename, copyright, patent or other intellectual property of GENERICO, nor in any of GENERICO’s trademarks or trade names appearing on the label or packaging materials of the Product or any Pipeline Products. NEW ALPHA agrees to do nothing by act or omission which would impair GENERICO’s or its Affiliates’ rights, ownership and title in the aforementioned.

11.10 If either Party becomes aware of any product or activity of any third Party that involves or may involve infringement or other violation of any Technology, that Party must promptly notify the other Party in writing of the infringement or violation. NEW ALPHA may in its discretion take or not take whatever action it believes is appropriate. GENERICO will fully cooperate with NEW ALPHA with respect to bringing any action, including joining as a party to the suit, if necessary, supplying essential documentary evidence and making essential witnesses then in its employ available, in each case only to the extent that such cooperation would not interfere with the operation of GENERICO’s business and subject to the reimbursement of GENERICO for reasonable out-of-pocket expenses incurred by it in connection with such cooperation.

22

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

12. Indemnification.

12.1 GENERICO agrees, subject to Sections 12.8 and 12.9, to indemnify, defend and hold harmless NEW ALPHA and its Affiliates and their respective officers, directors, employees and agents from any Damages incurred by or assessed against them resulting from a third party claim caused by or alleged to be caused by:

(A) GENERICO’s gross negligence, bad faith, intentional misconduct or intentional failure to perform any of its obligations under this Agreement; and

(B) any Product Liability Claim arising from the gross negligence or bad faith of, or intentional misconduct or intentional breach of this Agreement by, GENERICO or any GENERICO Affiliate.

12.2 NEW ALPHA agrees to indemnify, defend and hold harmless GENERICO, its Affiliates, and their officers, directors, employees and agents (the “GENERICO Indemnified Parties”) from any Damages incurred by or assessed against them resulting from a third party claim caused by or alleged to be caused by:

(A) NEW ALPHA’s failure to perform any of its obligations under this Agreement;

(B) any Product Liability Claim arising from the (i) negligence, fraud or intentional misconduct of NEW ALPHA or any NEW ALPHA Affiliates or (ii) the New Alpha Manufacturing or any failure or deficiency in the New Alpha Manufacturing;

(C) any claim that the manufacture, use or sale of the Product or any Pipeline Product infringes a patent or any other proprietary right of a third party;

(D) any Recall, Product Liability Claim or other third-party claim (i) not arising from the gross negligence or bad faith of, or intentional misconduct or intentional breach of this Agreement by, the GENERICO Indemnified Parties or (ii) to the extent the liability of the GENERICO Indemnified Parties therefrom would result in the GENERICO Indemnified Parties being subject to liability for which GENERICO is not responsible under Section 12.9.

12.3 If any Party entitled to be indemnified pursuant to this Section 12 (an “Indemnified Party”) receives notice of the assertion by any Person of any claim or of the commencement by any such Person of any Action (any such claim or Action being referred to herein as an “Indemnifiable Claim”) with respect to which another Party hereto (an “Indemnifying Party”) is or may be obligated to provide indemnification, the Indemnified Party must promptly notify the Indemnifying Party in writing (the “Claim Notice”). The failure to provide such notice will not relieve or otherwise affect the obligation of the Indemnifying Party to provide indemnification hereunder, except to the extent that any Damages directly resulted or were caused by such failure.

12.4 The Indemnifying Party will have 30 days after receipt of the Claim Notice to undertake, conduct and control, through counsel of its own choosing and at its expense, the settlement or defense of the claim, and the Indemnified Party will cooperate with the Indemnifying Party in connection with the settlement or defense, if:

(A) the Indemnifying Party permits the Indemnified Party to participate in the settlement or defense through counsel chosen by the Indemnified Party (subject to the consent of the Indemnifying Party, which consent shall not be unreasonably withheld);

23

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

(B) the fees and expenses of such counsel will not be borne by the Indemnifying Party; and

(C) the Indemnifying Party does not settle any Indemnifiable Claim without the Indemnified Party’s consent. So long as the Indemnifying Party is vigorously contesting any Indemnifiable Claim in good faith, the Indemnified Party may not pay or settle the claim without the Indemnifying Party’s consent, which consent shall not be unreasonably withheld.

12.5 If the Indemnifying Party does not notify the Indemnified Party within 30 days after receipt of the Claim Notice that it elects to undertake the defense of the Indemnifiable Claim described in the Claim Notice, the Indemnified Party has the right to contest, settle or compromise the Indemnifiable Claim in the exercise of its reasonable discretion. However, the Indemnified Party must notify the Indemnifying Party of any compromise or settlement of any such Indemnifiable Claim.

12.6 Notwithstanding anything in this Section 12 to the contrary, GENERICO is not entitled to assume the defense for any Indemnifiable Claim (and will be liable for the reasonable fees and expenses incurred by the Indemnified Party in defending the claim) if the Indemnifiable Claim seeks an order, injunction or other equitable relief (or other relief for other than money damages) against NEW ALPHA or its Affiliates which NEW ALPHA determines, after conferring with its counsel, cannot be separated from any related claim for money damages and which, if successful, would adversely affect the commercialization of the Product or any Pipeline Product. However, if an equitable relief portion of the Indemnifiable Claim can be separated from that for money damages, GENERICO may assume the defense of the portion relating to money damages.

12.7 In calculating any amount that any Indemnifying Party is required to pay an Indemnified Party in respect of Damages provided under this Agreement, such amount shall be (A) reduced to take into account any net tax benefit realized by the Indemnified Party arising from the incurrence or payment by the Indemnified Party of such Damages and (B) increased to take into account any net tax cost incurred by the Indemnified Party as a result of the receipt or accrual of payments hereunder (grossed-up for such increase), in each case determined by treating the Indemnified Party as recognizing all other items of income, gain, loss, deduction or credit before recognizing any item arising from such Damages (provided that if the tax benefit or cost is realized in a tax period following the period in which the indemnity payment is made, the tax benefit or cost amount (as the case may be) shall be paid over when realized).

12.8 NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, NEITHER PARTY WILL BE LIABLE HEREUNDER FOR MONETARY DAMAGES UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER

24

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

LEGAL OR EQUITABLE THEORY FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION, LOSS OF PROFITS FROM THE USE OF (OR INABILITY TO USE) THE TECHNOLOGY, THE DEVELOPMENT OR COMMERCIALIZATION OF THE PRODUCT OR OTHERWISE IN CONNECTION WITH, OR ARISING OUT OF, THIS AGREEMENT, OTHER THAN WITH RESPECT TO DAMAGES FOR GENERICO EXTRAORDINARY FAILURE (as defined in Section 12.9)

12.9 Notwithstanding anything herein to the contrary, in no event will the GENERICO Indemnified Parties have any liability to NEW ALPHA or any of its Affiliates, or to any third party in connection with this Agreement, for monetary Damages in excess of $100 million in the aggregate, except to the extent that such Damages are the result of (A) one of GENERICO’s (or one of its parent entity’s) executive officers, in bad faith, affirmatively instructing employees of GENERICO to materially breach GENERICO’s obligation to manufacture the Product or any Pipeline Product under this Agreement or (B) any intentional failure by GENERICO, in bad faith, to cure any material breach of GENERICO’s obligation to manufacture the Product or any Pipeline Product under this Agreement (which is capable of being cured) following notice thereof in accordance with Section 15.3 (if such breach is not cured within a reasonable period of time following receipt of such notice of such breach) (any of the occurrences set forth in sub clauses (A) and (B) of this Section 12.9, “GENERICO Extraordinary Failure”).

13. Management Fee. NEW ALPHA will pay GENERICO a facility management fee (the “Management Fee”) equal to $3,000,000 for each of the 2008, 2009 and 2010 calendar years, or a total of $9,000,000, such payment to be made within 30 days following the end of the applicable calendar year. The Management Fee shall be in addition to, and not in lieu of, any amounts otherwise payable under this Agreement. In addition, the Management Fee shall be reduced to the extent employees of GENERICO at the Melrose Park Facility are transferred to NEW ALPHA as more fully described in Section 14.5 below.

14. Melrose Park and Grand Island Facilities.

14.1 FDA Compliance.

(A) Each of NEW ALPHA and GENERICO shall cooperate reasonably and in good faith with the other Party to develop a mutually acceptable plan to modernize the Melrose Park Facility as requested or required by the FDA or that, in both Parties’ reasonable judgment, are necessary to maintain FDA Regulatory Approvals (the “FDA Modernization Plan”). All costs and expenses contemplated by the FDA Modernization Plan shall be borne by NEW ALPHA. The scope and timing of implementation of, and expenditures under, the FDA Modernization Plan shall be mutually determined in good faith between the Parties.

(B) GENERICO will, in good faith, execute the actions contemplated by the FDA Modernization Plan, subject to NEW ALPHA’s review and approval. NEW ALPHA shall reimburse GENERICO for all out-of pocket costs to third parties reasonably incurred (with the approval of NEW ALPHA not to be unreasonably withheld) in connection with GENERICO’s performance of such actions. In connection with such actions, GENERICO will not in any event be obligated to incur incremental shutdown time outside the ordinary course of its business, reduce in any material respect production capacity available for producing Generico Products (or, without the consent of NEW ALPHA, the Product or any Pipeline Product) or otherwise impact or disrupt in any material respect GENERICO’s or NEW ALPHA’s business.

25

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

14.2 EU Compliance.

(A) To the extent requested by NEW ALPHA, GENERICO shall cooperate reasonably and in good faith in connection with NEW ALPHA’s preparation of a plan to obtain necessary Regulatory Approvals from the EMEA with respect to the Melrose Park Facility (the “Melrose Park EU Plan”). All costs and expenses contemplated by the Melrose Park EU Plan shall be borne by NEW ALPHA (unless GENERICO initiates plans to commercialize its products or product candidates in Europe, in which case the Parties shall allocate the costs and expenses contemplated by the Melrose Park EU Plan between them equitably in good faith). Subject to Section 14.2(B) below, the scope and timing of implementation of, and expenditures under, the Melrose Park EU Plan shall be in the sole discretion of NEW ALPHA.

(B) During the term of the Melrose Park Lease, GENERICO will, in good faith, complete the actions required under the Melrose Park EU Plan as soon as reasonably practicable following the Effective Date. In connection with such actions, GENERICO will not in any event be obligated to incur incremental shutdown time outside the ordinary course of its business, reduce in any material respect production capacity available for producing Generico Products (or, without the consent of NEW ALPHA, the Product or any Pipeline Product) or otherwise impact or disrupt in any material respect GENERICO’s or NEW ALPHA’s business or the actions required by the FDA Modernization Plan. The Parties acknowledge that the FDA Modernization Plan shall not in any event include any incremental costs included in the Melrose Park EU Plan.

14.3 Decommissioned Equipment. GENERICO will not de-commission, modify, move or fail to maintain any equipment or systems or revise approved regulatory processes related to systems and equipment in the Melrose Park Facility that is operational as of the Effective Date such that the equipment or system would require re-validation in accordance with FDA regulatory requirements. For the avoidance of doubt, in no event will GENERICO have any obligation to re-validate any equipment or system that is decommissioned as of the Effective Date.

14.4 Melrose Park Equipment. GENERICO will maintain the equipment and systems in the Melrose Park Facility in reasonably good working order.

14.5 Melrose Park Facility Conveyance/Transfer.

(A) Transfer of Employees at Melrose Park Facility. To the extent reasonably requested by NEW ALPHA, GENERICO shall cooperate reasonably and in good faith with NEW ALPHA with respect to the transfer of GENERICO’s employees at the Melrose Park Facility to NEW ALPHA. If and to the extent NEW ALPHA hires any such employees, the Management Fee shall be reduced on a dollar-for-dollar basis based upon the total compensation (i.e., base salary, bonus, medical benefits, equity incentives, etc.) paid to such employees.

26

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

(B) Training. NEW ALPHA shall have the right to train and integrate all appropriate personnel of GENERICO with respect to Nab technology. In connection with such training, GENERICO will not in any event be obligated to incur incremental shutdown time outside the ordinary course of its business, reduce in any material respect production capacity available for producing Generico Products (or, without the consent of NEW ALPHA, the Product or any Pipeline Product) or otherwise impact or disrupt in any material respect GENERICO’s or NEW ALPHA’s business.

14.6 Contract Manufacturing and Alpha Manufacturing.

(A) To the extent of excess capacity at the Melrose Park Facility (in all cases after satisfying 100% of NEW ALPHA’s and GENERICO’s actual demand for the Product, Pipeline Products and Generico Products, as applicable, GENERICO will undertake any contract manufacturing opportunities presented by NEW ALPHA subject to the following:

(i) GENERICO will in no event be required to contract manufacture any products that then compete with any of its products, pending products or products (it being understood that the foregoing shall not apply with respect to Pipeline Products);

(ii) GENERICO will have sole discretion to decide on key terms of contract manufacturing (including but not limited to price, liability provisions, duration, volume levels);

(iii) NEW ALPHA will bear all responsibility for sourcing all such contract manufacturing opportunities;

(iv) GENERICO will receive the net proceeds from any contract manufacturing performed by GENERICO; and

(v) GENERICO contract manufacturing shall not obligate NEW ALPHA to perform contract manufacturing following the end of the Term, except with NEW ALPHA’s prior written consent.

(B) Subject to Section 14.6(A)(i) above, GENERICO will, in good faith, consider opportunities to provide access, at dedicated times, during which NEW ALPHA employees may utilize the equipment in the Melrose Park Facility for contract manufacturing (performed by NEW ALPHA employees, all costs of which are to be borne by NEW ALPHA), in all cases subject to the following sentence. GENERICO will not in any event be obligated to incur incremental shutdown time outside the ordinary course of its business, reduce in any material respect production capacity available for producing Generico Products (or, without the consent of NEW ALPHA, the Product or any Pipeline Product) or otherwise impact or disrupt in any material respect GENERICO’s or NEW ALPHA’s business or the actions required by the FDA Modernization Plan. NEW ALPHA will receive any proceeds from any contract manufacturing performed by NEW ALPHA.

27

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

15. Miscellaneous Provisions.

15.1 Independent Contractors. NEW ALPHA and GENERICO are independent Parties, and nothing contained herein will be construed to create a joint venture, partnership or similar relationship. Neither Party is authorized to, nor will it, make any statements, claims, representations, warranties or otherwise act in any way so as to incur any liability whatsoever for which the other Party may become directly, indirectly or contingently liable.

15.2 Assignment. The rights and obligations of the Parties under this Agreement may not be assigned or transferred in any manner, including, without limitation, by operation of law, sale of stock or sale of assets, without the prior written approval, which shall not be unreasonably withheld, of the other Party (and any attempt to do so will be void) except that rights to payment of money may be assigned without such approval. Despite the foregoing, in no event will NEW ALPHA be obligated to consent to an assignment of this Agreement to a Competitor.

15.3 Notices. Any and all notices given pursuant to this Agreement shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, (b) upon confirmation of receipt if delivered by facsimile, (c) on the first business day following the date of dispatch if delivered by a recognized next-day courier service, or (d) on the date received if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice:

If to NEW ALPHA to:

Abraxis BioScience, Inc.

11755 Wilshire Boulevard

Suite 2000

Los Angeles, CA 90025

Fax: (310) 998-8553

Attention: Chief Executive Officer

with a copy to:

Abraxis BioScience, Inc.

11755 Wilshire Boulevard

Suite 2000

Los Angeles, CA 90025

Fax: (310) 998-8553

Attention: General Counsel

If to GENERICO to:

APP Pharmaceuticals, Inc.

1501 East Woodfield Road, Suite 300E

Schaumburg, Illinois 60173

Fax: (847) 413-2652

Attention: Chief Executive Officer

28

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

with a copy to:

APP Pharmaceuticals, Inc.

1501 East Woodfield Road, Suite 300E

Schaumburg, Illinois 60173

Fax: (847) 413-2652

Attention: General Counsel

15.4 Force Majeure.

(A) The obligations of a Party hereunder will be suspended during the time and to the extent that such Party is prevented from complying therewith due to any event or circumstances beyond the reasonable control and without the fault or negligence of the affected Party (which circumstance is hereinafter referred to as “Force Majeure”), including but not limited to floods, fire, storms, earthquakes, lockouts, explosion, hostilities, war (whether declared or undeclared), acts of terrorism, civil disturbances, order or acts of any government, whether de jure or de facto or any official purporting to act under authority of any such government (other than as to Regulatory Approval), illegality arising from domestic or foreign laws or regulations, insurrections, quarantine or custom restrictions (other than due to the action or inaction of the Party claiming a Force Majeure), acts of God or other similar events beyond the reasonable control of, as the case may be, NEW ALPHA or GENERICO which results in hindrance of the performance by the Party of its obligations hereunder.

(B) As soon as possible after being affected by a Force Majeure circumstance, the affected Party must furnish to the other Party all particulars of the Force Majeure and the manner in which its performance is thereby prevented or delayed. The Party whose obligations hereunder have been suspended will promptly and diligently pursue appropriate action to enable it to lift the Force Majeure situation, except that Party shall not be obligated to settle any strike, lockout or other labor difficulty on terms contrary to its wishes.

15.5 Amendment and Waiver. This Agreement (including the Exhibits hereto) may be amended, modified, superseded or cancelled, and any other of the terms or conditions hereof may be modified, only by a written instrument executed by both Parties or, in the case of a waiver, by the Party waiving compliance. Failure of either Party at any time or times to require performance of any provision hereof will in no manner affect the right of such Party at a later time to enforce the same, and no waiver of any nature, whether by conduct or otherwise, in any one or more instances, will be deemed to be or considered as a further or continuing waiver of any provision of this Agreement.

15.6 Severability. If any one or more of the agreements, provisions or terms contained herein are declared invalid, illegal or unenforceable in any respect, the validity of the remaining agreements, provisions or terms contained will shall in no way be affected, prejudiced or invalidated thereby.

29

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

15.7 Entire Agreement. This Agreement, together with the Exhibits hereto and the Specifications, contains the entire agreement between the Parties, and supersedes any agreements between them with respect to the subject matter hereof.

15.8 Section Headings; Recitals. The section headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement. The recitals are hereby incorporated into this Agreement by reference.

15.9 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the substantive law (without regard to conflicts of law provisions) of the State of Delaware.

15.10 Consent to Jurisdiction. Each of GENERICO and NEW ALPHA irrevocably agrees that any legal action or proceeding with respect to this Agreement, the transactions contemplated hereby, any provision hereof, the breach, performance, validity or invalidity hereof or for recognition and enforcement of any judgment in respect hereof brought by another Party or its successors or permitted assigns shall be brought and determined in any federal or state court located in the State of Delaware, and each of GENERICO and NEW ALPHA hereby irrevocably submits with regard to any such action or proceeding for themselves and in respect to their property, generally and unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each of GENERICO and NEW ALPHA hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, the transactions contemplated hereby, any provision hereof or the breach, performance, enforcement, validity or invalidity hereof, (A) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to lawfully serve process, (B) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (C) to the fullest extent permitted by applicable laws, that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper and (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

15.11 No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the Parties hereto to express their mutual intent, and no rule of strict construction will apply to any term or condition of this Agreement.

15.12 Survival. Except to the extent that any monies are owed and not yet paid and for the provisions of Sections 1, 2.2(H), 2.2(I), 2.5, 3.2(C), 3.5, 5.1 (last sentence), 5.2 (last sentence), 5.3 (last sentence), 6, 8, 9, 10, 11, 12 and 15, none of the provisions herein shall survive termination or expiration of this Agreement. Sections 2.2(H), 2.5, 3.2(C) and 3.5 shall survive until the seventh anniversary of the termination or expiration of this Agreement.

15.13 Counterparts. This Agreement may be executed in separate counterparts, each of which will be deemed to be an original, but which together will constitute one and the same instrument. An executed signature page of this Agreement delivered by facsimile transmission shall be effective as an original executed signature page.

30

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

15.14 Enforcement. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by the Parties in accordance with their specific terms. It is accordingly agreed that the Parties shall be entitled to specific performance of the terms hereof, this being in addition to any other remedy to which a Party is entitled at law or in equity.

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

31

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

IN WITNESS WHEREOF, the Parties hereto have executed this Manufacturing Agreement as of the date and year first written above.

NEW ABRAXIS, INC.
By:	/s/ Patrick Soon-Shiong
Name:	Patrick Soon-Shiong
Title:	CEO
APP PHARMACEUTICALS, LLC
By:	/s/ Patrick Soon-Shiong
Name:	Patrick Soon-Shiong
Title:	CEO

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

EXHIBIT A

DESCRIPTION OF PRODUCT, OR PIPELINE PRODUCTS, PROCESSING

(***).

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

EXHIBIT B

NEW ALPHA INSURANCE

$25,000,000 per incident and in the aggregate

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

EXHIBIT C

GENERICO INSURANCE

$25,000,000 PER INCIDENT AND IN THE AGGREGATE

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

SCHEDULE 1.4

PART A

2008 ANNUAL FORECAST

Melrose Park

GENERICO Lyophilizer Cycles:	(***)
NEW ALPHA Lyophilizer Cycles:	(***)
Units (in millions)
GENERICO Lyophilizer-produced Units	(***)
NEW ALPHA Lyophilizer-produced Units	(***)
Grand Island
GENERICO Lyophilizer Cycles:	(***)
NEW ALPHA Lyophilizer Cycles:	(***)
Units (in millions)
GENERICO Lyophilizer-produced Units	(***)
NEW ALPHA Lyophilizer-produced Units	(***)
PART B
2009, 2010, 2011 AND 2012 ESTIMATES
Melrose Park
	2009	2010	2011	2012
GENERICO Lyophilizer Cycles:	(***)	(***)	(***)	(***)
NEW ALPHA Lyophilizer Cycles:	(***)	(***)	(***)	(***)
Units (in millions)
GENERICO Lyophilizer-produced Units	(***)	(***)	(***)	(***)
NEW ALPHA Lyophilizer-produced Units	(***)	(***)	(***)	(***)

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

Grand Island

	2009	2010	2011	2012
GENERICO Lyophilizer Cycles:	(***)	(***)	(***)	(***)
NEW ALPHA Lyophilizer Cycles:	(***)	(***)	(***)	(***)
Units (in millions)
GENERICO Lyophilizer-produced Units	(***)	(***)	(***)	(***)
NEW ALPHA Lyophilizer-produced Units	(***)	(***)	(***)	(***)

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

SCHEDULE 1.66

TERRITORIES

• European Economic Area

• (***)

• Australia

• Japan

• China (including Hong Kong and Macau)

• India

• Republic of Korea

• (***)

• (***)

• (***)

• (***)

• (***)

• (***)

• (***)

• (***)

• (***)

• Gulf States (including Saudi Arabia, United Arab Emirates, Kuwait, Oman and Dubai)

• (***)

• (***)

• (***)

• (***)

• (***)

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

SCHEDULE 2.10

OTHER SERVICES

Service	Charges1	Assumptions
Manufacturing-Related Information Technology Support	(***)	(***)
Corporate QA, including; •        establishment of quality systems and regulatory oversight; •        review of suppliers to ensure quality systems requirements are met; •        review of internal functions to ensure quality systems requirements are met; •        provide polices, SOPs & protocols support to all functions; •        provide warehousing support to ensure materials have been received, sampled and shipped according to requirements; •        review of product development reports; •        calibration, maintenance and preventive maintenance of analytical equipment; and	(***)	(***)

¹ Charges shall be increased each year by (***). Actual charges will be based upon time and materials.

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

Service	Charges1	Assumptions
•        QA, validation and change control of multi-site computer systems.
Corporate QC, including; •        analytical testing of raw materials and components; and •        validation of analytical equipment and software systems.	(***)	(***)
CGMP and other plant-related training	(***)	(***)

Note: Redacted portions have been marked with (***). The redacted portions are subject to a request for confidential treatment that has been filed with the Securities and Exchange Commission.

SCHEDULE 4.1

UNIT COST FOR ABRAXANE²

1. (***) for units manufactured at 2020 Ruby Street, Melrose Park, Illinois.

2. (***) for units manufactured at 3159 Staley Road, Grand Island, New York.

BATCH COST FOR ANY PIPELINE PRODUCT

• Actual cost for Generico Manufacturing, plus (***). The actual cost for Generico Manufacturing of Pipeline Products shall be verified and approved by NEW ALPHA prior to their production.

² Charges shall be increased each year by (***).

EX-10.6

Exhibit 10.6

EXECUTION COPY

LEASE AGREEMENT

between

ABRAXIS BIOSCIENCE, LLC

and

APP PHARMACEUTICALS, LLC

LEASE AGREEMENT

THIS LEASE AGREEMENT (this “Lease”), dated effective the 13^th day of November, 2007 (the “Effective Date”), is made by and between Abraxis BioScience, LLC, a Delaware limited liability company (“LESSOR”), and APP Pharmaceuticals, LLC, a Delaware limited liability company ( “LESSEE”).

RECITALS

WHEREAS, LESSOR and LESSEE have entered into a Separation and Distribution Agreement dated as of the date hereof (the “Separation Agreement”);

WHEREAS, simultaneously herewith, New Abraxis, Inc., to be renamed Abraxis BioScience, Inc., parent company of LESSOR, and LESSEE are entering into a Manufacturing Agreement (the “Manufacturing Agreement”);

WHEREAS, LESSOR is the owner of that certain improved real property located at and commonly known as the Ruby Street facility more particularly described in Exhibit A (together with all buildings, structures, fixtures and improvements and betterments thereon and appurtenances thereto other than the Machinery and Equipment (as defined in the Separation Agreement) of LESSEE located at the Ruby Street facility) thereon attached hereto and made a part hereof (the “Property”)(for the avoidance of doubt, the Property shall not include those areas indicated as “Dedicated Abraxane Process Areas” in Exhibit A);

WHEREAS, notwithstanding that LESSOR owns the Property and this Lease, LESSEE is, and remains, the owner of the Contributed Machinery and Equipment (as defined in the Separation Agreement); and

WHEREAS, LESSOR desires to lease to LESSEE, and LESSEE desires to lease from LESSOR, (i) the Property (ii) all improvements at any time existing thereon, and (iii) all fixtures, equipment, furniture and machinery, excluding, for all purposes, any Machinery and Equipment of LESSOR located at the Property (collectively, the “Premises”).

NOW, THEREFORE, in consideration of the mutual promises and premises hereinafter contained, it is hereby mutually agreed as follows:

ARTICLE I

Definitions

1.1 All capitalized terms used in this Lease and not defined herein shall have the meaning ascribed to such terms in the Separation Agreement.

- 2 -

ARTICLE II

Property

2.1 Lease. LESSOR hereby leases to LESSEE the LESSEE’s share of the Premises, hereinafter referred to as the “LESSEE Premises,” and LESSEE leases, hires and takes from LESSOR the LESSEE Premises. LESSEE has inspected the Premises and accepts the same “As Is.” The LESSEE Premises consists of approximately 122,000 square feet of office, warehouse and pharmaceutical space and shall include the right to use and obligation to share (as applicable) any common areas.

ARTICLE III

Term

3.1 Initial Term. The term of this Lease shall commence on the Effective Date (the “Commencement Date”) and end on December 31, 2011 (the “Term”), unless earlier terminated in accordance with the provisions of this Lease.

3.2 Option Term.

(a) LESSEE shall have the right and option to renew and extend the term of this Lease until December 31, 2012, provided, that (x) LESSEE gives written notice regarding exercise of the option to renew and extend (such notice to be delivered no earlier than six months, and no later than three months, before the expiration of the Term in Section 3.1), and (y) during the one year period from July 1, 2010 through June 30, 2011, the aggregate production of LESSEE’s products at the Premises shall have totaled more than ten million (10,000,000) units. LESSEE will in good faith use commercially reasonable efforts to expedite the transfer of its products manufactured at the Premises to the Grand Island Facility (as defined in the Separation Agreement) or to the Cruce Davila Property (as defined in the Separation Agreement) beginning on the date hereof.

(b) For any extension, the base rent shall be the base rent of the immediately preceding lease year plus three percent (3%).

3.3 Holding Over. If LESSEE retains possession of the Premises or any part thereof after the termination of this Lease or expiration of the Term, LESSEE shall pay to LESSOR a monthly Rent equal to 2.00 times the monthly Rent in effect as of the last month of the Term. This charge shall not limit LESSOR’s right to seek such other remedy as may be available to it at law or equity.

ARTICLE IV

Rent

4.1 Rent. During the Term, LESSEE covenants and agrees to pay LESSOR, as annual rent for the Premises, the aggregate amount of $823,500, which shall be paid monthly (i.e., $68,625) on the 1^st day of each month during the Term at LESSOR’s address for notice hereunder or otherwise as LESSOR may designate (the “Rent”). LESSEE shall pay, as additional rent, the fees for the services described in Section 5.1 below.

- 3 -

ARTICLE V

Services and Utilities

5.1 Services and Utilities. During the Term, LESSEE shall be solely responsible for and shall promptly pay, as additional rent, all utilities used or consumed at the Premises, including but not limited to all water, gas, heat, light, power, telephone and other utilities and services supplied to the Premises, together with any taxes thereon. If LESSEE desires to install any equipment which shall require additional utility facilities or utility facilities of a greater capacity than the facilities existing on the Effective Date, such installation shall be subject to LESSOR’s prior written approval (such approval not to be unreasonably withheld, conditioned, denied or delayed) of LESSEE’s plans and specifications therefor. If approved by LESSOR, LESSEE agrees to pay the cost of providing such additional utility facilities or utility facilities of greater capacity.

5.2 LESSOR Not Responsible For Interruption of Service. LESSOR shall in no way be liable or responsible for any loss, damage or expense that LESSEE may sustain or incur by reason of any change, failure, interference, disruption or defect in the supply or character of the utilities furnished to the Premises, or if the quantity or character of the utilities supplied to the Premises are no longer available or suitable for LESSEE’s requirements, and no such change, failure, defect, unavailability or unsuitability shall constitute an actual or constructive eviction in whole or in part, or entitle LESSEE to any abatement or diminution of rent or additional rent, or relieve LESSEE from any obligations under this Lease; provided, however, if any service failure arises from the gross negligence or willful misconduct of LESSOR, then (a) the Rent and any additional rent payable under this Lease shall abate in proportion to the fraction of the total rentable area of the Premises that is materially affected by such service failure and (b) LESSEE shall have the right to pursue any and all remedies available at law or in equity.

ARTICLE VI

Repairs and Maintenance

6.1 LESSEE’s Obligations.

(a) Except for Capital Repairs (as hereinafter defined), LESSEE shall be responsible for (i) all repairs (including replacements) necessary to maintain the Premises in substantially the same condition as exists on the Effective Date, normal wear and tear and damage by fire or other casualty and eminent domain excepted. LESSEE shall not be responsible for any maintenance, repairs or replacement in or affecting any portions of the Premises occupied by any tenant or occupant other than LESSEE. In the event that LESSEE has not performed such repairs and LESSOR elects to perform the repair, after written notice and a reasonable opportunity to cure, LESSEE shall reimburse LESSOR the repair costs within thirty (30) days following LESSEE’s receipt of LESSOR’s written demand and evidence of payment therefor.

- 4 -

(b) LESSEE shall also be responsible for making any repairs to the Property caused by any act, omission or negligence of LESSEE or its employees, agents, invitees, licensees, subtenants or contractors and shall indemnify and save harmless LESSOR from any and all expenses, liens, claims or damages to either persons or property arising out of, or resulting from, the failure to make such repairs; provided, however, LESSEE shall not be obligated to make any repairs to the Property if the need for such repairs is caused by LESSOR or its agents, contractors, employees, guests or invitees. LESSOR shall have the right to make any repairs that are the responsibility of LESSEE under this Section 6.1(b) at LESSEE’s sole cost and expense after written notice and reasonable opportunity to make the repair, and LESSEE shall reimburse LESSOR the repair costs within thirty (30) days following LESSEE’s receipt of LESSOR’s written demand and evidence of payment therefor.

(c) All repairs conducted by LESSEE shall be accomplished promptly with first class materials, in a good and workmanlike manner, in compliance with all applicable laws of all governmental authorities and in a style, character and quality conforming to the existing construction of the Premises.

6.2 LESSOR’s Obligations.

(a) For the purposes of this Lease, “Capital Repairs” shall mean (i) any maintenance, repairs or replacements to the roof, foundation and structural elements of the Premises, (ii) any maintenance, repairs or replacements to the Premises’ systems (which shall include the heating, ventilating, air conditioning, plumbing, electrical, mechanical and other systems and equipment serving the Premises generally), the common areas or the exterior of the Premises and (iii) maintenance, repairs or replacements to the Premises required to comply with any laws applicable to the Premises (to the extent not relating to LESSEE’s use or occupancy of the Premises) enacted or promulgated after the Effective Date, in each case, the cost of which is properly characterized as property, plant and equipment according to generally accepted accounting practices. LESSOR, at its expense (subject to reimbursement by LESSEE to the extent provided in Section 6.1(b)), shall be responsible for all Capital Repairs necessary to keep the Premises in as good condition as exists as of the Effective Date or to comply with any laws applicable to the Premises (to the extent not relating to LESSEE’s use or occupancy of the Premises) enacted or promulgated after the Effective Date. LESSOR shall complete such repairs in a good and workmanlike manner consistent with normal and customary industry standards for buildings similar to the Premises and in compliance with all applicable laws.

(b) Notwithstanding the foregoing, LESSEE may give written notice to LESSOR of its election to perform any Capital Repair obligation of LESSOR hereunder for the account of LESSOR. All Capital Repair work performed by LESSEE, including, without limitation, construction, as well as preparation, review and approval of plans, costs and specifications and selection of architects, engineers, consultants and contractors, shall be at LESSOR’s sole cost and expense and subject to LESSOR’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. If LESSOR shall fail to reasonably approve, disapprove or request reasonable revisions for any request or plans submitted by LESSEE in connection with a Capital Repair within fifteen (15) business days from LESSOR’s receipt of such notice, then LESSOR’s consent shall be deemed approved. If an emergency shall exist (as determined in LESSEE’s good faith judgment), LESSEE may perform any Capital Repair obligation of LESSOR hereunder for the account of LESSOR, after first notifying LESSOR of the

- 5 -

same by telephone or facsimile of such emergency and receiving LESSOR’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. If, in the event of an emergency (as deemed by LESSEE in good faith), LESSOR shall fail to reasonably approve, disapprove or request reasonable revisions for any request or plans submitted by LESSEE in connection with a Capital Repair within seventy-two (72) hours from LESSOR’s receipt of such notice (unless circumstances warrant a shorter period), then LESSOR’s consent shall be deemed approved. If LESSEE believes that LESSOR has unreasonably withheld its consent, approval or permission to any matter requiring LESSOR’s consent, approval or permission pursuant to this Section 6.2(b), LESSEE may submit such dispute to arbitration. Arbitration shall be in accordance with the Expedited Procedures set forth in the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) then in effect. The demand for arbitration shall be filed in writing with the other party, and the AAA in Chicago, Illinois. A demand for arbitration shall be made within ten (10) days of the event giving rise to the right of arbitration. The award rendered by the arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof.

ARTICLE VII

Alterations, and Additions

7.1 Alterations and Additions. LESSEE shall have the right, from time to time, without LESSOR’s consent, to make interior alterations, improvements and/or additions in and to the Premises that will have no effect on the roof, foundation or other structural elements of the Premises (the “Building Structure”) and will have no adverse effect on the heating, ventilating, air conditioning, plumbing, electrical, mechanical and other systems and equipment serving the Premises generally (the “Building Systems”). LESSEE may make alterations, improvements and/or additions that affect the exterior of the Premises or may have a material adverse effect on the Building System only after first obtaining the prior written consent of LESSOR, which consent shall not be unreasonably withheld, conditioned, delayed or denied. All such approved additions, alterations or improvements shall be in accordance to plans and specifications prepared by a duly qualified architect or engineer who shall submit such plans and specifications to LESSOR for written approval, not to be unreasonably withheld, conditioned, delayed or denied. All alterations, improvements and additions to the Premises shall be made in accordance with all applicable laws and shall at once when made or installed be deemed to have attached to the freehold and to have become the property of LESSOR and shall remain for the benefit of LESSOR at the end of the Term, or earlier termination of this Lease. Any equipment installed by LESSEE during the Term shall at LESSEE’s election be removed at the expiration or termination of this Lease or shall remain at the Premises. In the event of making such alterations, improvements and/or additions as herein provided, LESSEE shall indemnify and save harmless LESSOR from any and all expenses, liens, claims or damages to either persons or Premises arising out of, or resulting from the undertaking or making of said alterations, additions and improvements. Notwithstanding anything to the contrary set forth herein, LESSEE shall have the right, without LESSOR’s consent or approval, to make non-structural alterations of less than $50,000 in any instance.

- 6 -

ARTICLE VIII

Taxes

8.1 Payment of Taxes. LESSOR shall pay all real property taxes applicable to the Premises. LESSEE shall pay LESSOR in advance the monthly estimated real property tax amount together with all applicable rental taxes due thereon, within ten (10) days after receipt of an invoice from LESSOR setting forth LESSOR’s estimate of such amount. Within ninety (90) days following the end of each calendar year during the Term or as soon thereafter as is reasonably possible, LESSOR shall furnish LESSEE with a statement of all real property taxes relating to the Premises for the previous calendar year and the payments made by LESSEE during such calendar year. If LESSEE’s aggregate estimated monthly payments actually paid to LESSOR for the calendar year are greater than the real property taxes relating to the Premises for such calendar year, LESSOR shall promptly pay the excess to LESSEE or apply the excess to any past due amounts owing from LESSEE to LESSOR; if the payments made are less than the real property taxes relating to the Premises for such calendar year, LESSEE shall pay the difference to LESSOR within thirty (30) days of its receipt of such statement. If the Term does not commence or concurrently with the commencement or expiration of the tax year, LESSEE’s liability for real property taxes for such partial year shall be prorated on an annual basis. LESSOR’s and LESSEE’s obligations under this Section 8.1 shall survive the expiration or termination of this Lease.

8.2 Definition of Real Property Tax. As used herein, the term “real property tax” shall include any form of fee or tax imposed by any authority having the direct or indirect power to tax or assess, including any city, county, state or federal government, any school, agricultural, lighting, drainage or other improvement district thereof, or any private owners association created by covenants, conditions and restrictions binding on the Premises, as against any legal or equitable interest of LESSOR in the Premises, or as against LESSOR’s business of leasing the Premises. The term “real property tax” shall also include any tax, fee, levy, assessment or charge, or any increase therein, imposed by reason of events occurring during the Term, including, but not limited to, a change in the ownership of the Premises. Notwithstanding the foregoing, “real property tax” shall not include: (i) all excess profits taxes, franchise taxes, succession taxes, estate taxes, capital stock taxes, inheritance taxes, gift taxes, mortgage taxes, federal and state income taxes or any other taxes imposed upon or measured by LESSOR’s gross income or profits unless the same is specifically imposed in lieu of real estate taxes or ad valorem taxes; (ii) penalties for late payments; (iii) special assessments; and (iv) transfer taxes imposed upon any transfer of the Premises or any interest therein. Tax refunds shall be refunded to LESSEE in the calendar year they are received by LESSOR.

8.3 Personal Property Taxes.

(a) LESSEE shall pay prior to delinquency all taxes assessed against and levied upon LESSEE’s trade fixtures, furnishings, Contributed Machinery and Equipment and all other personal property of LESSEE contained in the Premises or otherwise owned or operated by LESSEE at the Premises. When possible, LESSEE shall cause said trade fixtures, furnishings, Contributed Machinery and Equipment and all other personal property to be assessed and billed separately from the real property of LESSOR.

- 7 -

(b) If any of LESSEE’s personal property shall be assessed and billed with LESSOR’s real property, LESSEE shall pay LESSOR the taxes attributable to LESSEE within thirty (30) days after receipt of a written statement setting forth the taxes applicable to LESSEE’s property.

ARTICLE IX

Indemnification; Insurance

9.1 Indemnity. LESSEE shall indemnify, defend and hold harmless LESSOR (solely with respect to LESSOR’s position as the owner of the Premises and the landlord under this Lease) from and against any and all claims arising from LESSEE’s use of the Premises, or from the conduct of LESSEE’s business or from any activity, work or things done, permitted or suffered by LESSEE in or about the Premises or elsewhere, and shall further indemnify, defend and hold harmless LESSOR (solely with respect to LESSOR’s position as the owner of the Premises and the landlord under this Lease) from and against any and all claims arising from any breach or default in the performance of any obligation on LESSEE’s part to be performed under the terms of this Lease or arising from any negligence of LESSEE, or any of LESSEE’s agents, contractors or employees, and from and against all costs, attorneys’ fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon; provided, however, LESSEE shall not indemnify, defend or hold harmless LESSOR from and against any claim, liability, expense, lawsuit, cost, loss or other damage, including reasonable attorneys’ fees, which arise from or are caused by or in anyway connected to the negligence or willful misconduct of LESSOR, its employees, agents, contractors, guests or invitees. Subject to Section 9.2 below, LESSOR shall indemnify, defend and hold harmless LESSEE (solely with respect to LESSEE’s position as the tenant under this Lease) from and against any and all claims arising from LESSOR’s use of or entry onto the Premises, and shall further indemnify, defend and hold harmless LESSEE (solely with respect to LESSEE’s position as the tenant under this Lease) from and against any and all claims arising from any breach or default in the performance of any obligation on LESSOR’s part to be performed under the terms of this Lease or arising from any gross negligence or willful misconduct of LESSOR, or any of LESSOR’s agents, contractors or employees and from and against all costs, attorneys’ fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon; provided, however, LESSOR shall not indemnify, defend or hold harmless LESSEE from and against any claim, liability, expense, lawsuit, cost, loss or other damage, including reasonable attorneys’ fees, which arise from or are caused by or in anyway connected to the negligence or willful misconduct of LESSEE, its employees, tenants, agents, guests or invitees.

9.2 Exemption of LESSOR From Liability.

(a) Except to the extent caused by the gross negligence or willful misconduct of LESSOR, its employees, agents, guests or invitees, LESSEE hereby agrees that LESSOR and its agents shall not be liable for injury to LESSEE’s business or any loss of income therefrom or for damage to the goods, wares, merchandise or other property of LESSEE, LESSEE’s employees, invitees, customers or any other person in or about the Premises, nor shall LESSOR be liable for injury to the person of LESSEE, LESSEE’s employees, agents or contractors, whether such damage or injury is caused by or results from fire, steam, electricity,

- 8 -

gas, water or rain, or from the breakage, leakage, obstruction, or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning, light fixtures or from any other cause whether said damage or injury results from conditions arising upon the Premises or upon other portions of the building of which the Premises are a part, or from other sources or places, and regardless of whether the cause of such damage or injury or the means of repairing the same is inaccessible to LESSEE. LESSOR shall not be liable for any damages arising from any act or neglect of any other lessee, if any, of the building in which the Premises are located.

(b) No directors, officers, employees or agents of LESSOR or individual, member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be LESSOR or any successor in interest, shall be subject to personal liability with respect to any of the covenants or conditions of this Lease. LESSEE will not seek recourse against the directors, officers, employees or agents of LESSOR or an individual, member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be LESSOR or any successor-in-interest or any of their personal assets for such satisfaction. It is mutually agreed that this clause is and shall be considered an integral part of this Lease.

(c) No directors, officers, employees or agents of LESSEE or individual, member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be LESSEE or any successor in interest, shall be subject to personal liability with respect to any of the covenants or conditions of this Lease. LESSOR will not seek recourse against the directors, officers, employees or agents of LESSEE or an individual, member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be LESSEE or any successor-in-interest or any of their personal assets for such satisfaction. It is mutually agreed that this clause is and shall be considered an integral part of this Lease.

(d) Remedies and limitations thereon set forth in this Lease shall only apply in this Lease.

9.3 Insurance.

(a) LESSOR shall obtain and maintain “all risk” property and casualty insurance on the Property, including the Premises. LESSEE shall pay the cost of the premiums for said insurance pertaining to the Premises or, if LESSOR consents, obtain Property & General Liability coverage of its own on the Premises, with LESSOR as loss payee on the Property and as additional named insured on the general liability policy. LESSEE shall carry and maintain at all times throughout the Term, at its expense, insurance with terms, coverage and companies satisfactory to LESSOR:

(i) commercial (comprehensive) liability insurance, with coverage against assumed or contractual liability under this Lease, with respect to liability arising out of ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto, to afford protection with respect to personal injury, loss of life and property damage, of not less than $2,000,000 per occurrence combined single limit subject to a $2,000,000 general aggregate;

- 9 -

(ii) “all risk” property insurance, including boiler and machinery comprehensive form, if applicable, covering damage to or loss of any of LESSEE’s personal property, fixtures, equipment and alterations, including electronic data processing equipment (and coverage for the full replacement cost thereof including business interruption of LESSEE), together with, if the property of LESSEE’s invitees is to be kept in the Premises, warehouser’s legal liability or bailee customers insurance for the full replacement cost of the property belonging to invitees and located in the Premises; and

(iii) worker’s compensation insurance and employer’s liability insurance in amounts required by applicable law or statute covering all persons employed in connection with LESSEE.

(b) LESSEE’s Contractor Insurance. LESSEE shall require any contractor of LESSEE performing work on the Premises to carry and maintain, at no expense to LESSOR:

(i) worker’s compensation insurance in form and amounts required by law; and

(ii) public liability insurance insuring LESSEE and LESSOR as additional insured, against liability which may arise on account of any alteration, addition, improvement or construction, written on a claims occurrence basis with minimum limits of $1,000,000/occurrence (it being understood that this is public liability insurance and not product liability insurance).

(c) Insurance Companies. Insurance required to be maintained by LESSEE shall be written by companies licensed to do business in the state in which the Premises are located and having, at the time the initial policies are issued, a General Policyholders Rating of at least “A-/VII” (or such higher rating as may be required by a lender having a lien on the Premises) as set forth in the most current issue of “Best’s Insurance Guide.”

(d) Policy Requirements. Comprehensive commercial liability and “all risk” property insurance policies evidencing such insurance shall, with respect to comprehensive commercial liability policies, name LESSOR and/or its designee(s) as additional insured and, with respect to “all risk” property insurance policies, name LESSOR and/or its designee(s) as loss payee, shall be primary and noncontributory and shall contain a provision, by means of endorsement or otherwise, whereby the insurer agrees that such policy shall not be cancelled, materially changed or not renewed without at least thirty (30) days advance written notice to LESSOR (except in case of cancellation for non-payment of premium, in which case ten (10) days advance written notice shall be sufficient) at the address set forth herein, or to such other party or address as may be designated by LESSOR or its designee from time to time. Such commitment to provide prior notice of cancellation, modification or non-renewal shall be without qualifications. All liability insurance policies shall be written on a claims occurrence basis and have a separation of insureds endorsement.

- 10 -

(e) Certificates of Insurance. Prior to the Commencement Date and thereafter on the anniversary of the issuance of each policy LESSEE shall furnish to LESSOR certificates of insurance evidencing the coverage under each of the policies required by LESSOR herein. Said certificate shall include an acknowledgment of the commitment to provide LESSOR thirty (30) days’ prior written notice of cancellation, modification or non-renewal (except ten (10) days for non-payment).

(f) LESSEE’s Failure to Comply with Insurance Requirements. In the event that LESSEE fails to comply with LESSEE’s insurance requirements as stated herein, then, in addition to (and not in lieu of) all other remedies that LESSOR may have hereunder for a breach by LESSEE, LESSOR may, but shall not be obligated to, obtain such insurance at LESSOR’s sole option and keep the same in effect, and LESSEE shall pay LESSOR the premium cost thereof upon demand. It is agreed, however, that LESSOR is not responsible for any inadequacy of insurance protection purchase by LESSEE or by LESSOR on behalf of LESSEE.

(g) Mutual Waiver of Subrogation. Neither LESSOR nor LESSEE shall be liable to the other or to any insurance company (by way of subrogation or otherwise) providing coverage for any loss or damage to any building, structure or other tangible property, or any resulting loss of income, even though such loss or damage might have been occasioned by the negligence of the other contracting party, its agents or employees, provided and to the extent such loss or damage is covered by insurance, it being acknowledged and agreed that the amount of any insurance deductibles is expressly excluded from the waiver provisions herein set forth. Notwithstanding the foregoing, the cost of any damage not covered by insurance shall be borne by the responsible party.

(h) Notice of Fire. LESSEE shall give immediate notice to LESSOR in case of fire or accidents in the Premises or of defects therein or in any fixtures or equipment and both parties shall procure a waiver of right of subrogation against one another on the part of all insurance carriers in connection with all insurance policies covering losses arising out of destruction or damage to the Premises or its contents.

ARTICLE X

Compliance with Requirements

10.1 Compliance. LESSEE will use commercially reasonable efforts to promptly obtain after the Effective Date and maintain and comply with all applicable permits, licenses and other authorizations required by Legal Requirements (including Environmental Laws) for the particular use of the Premises as a facility for the manufacture of injectible pharmaceutical products. LESSEE will use commercially reasonable efforts not to do any act or thing which constitutes a public or private nuisance. LESSOR will join in the application for any permit or authorization with respect to any Legal Requirements if such joinder is necessary. The term “Legal Requirements” shall mean all statutes, codes, ordinances, rules, regulations, orders, judgments or decrees of governments, authorities, agencies, officials and officers which now or at any time hereafter may be applicable to the Property.

- 11 -

ARTICLE XI

Use and Prohibited Acts

11.1 Use. LESSEE shall use and occupy the Premises in substantial conformity with all Legal Requirements, and only as a facility for the manufacture of injectible pharmaceutical products and for no other purpose without the prior written consent of LESSOR.

11.2 Operation. During the Term, LESSEE may operate upon the Premises on a 24 hour per day, seven days per week basis if permitted by the Legal Requirements.

11.3 LESSEE’s Risk. LESSEE shall use and occupy the Premises at its own risk. LESSOR shall have no responsibility or liability for any loss or damage to the fixtures or personal property of others who may claim through LESSEE, arising from any cause whatsoever, including, without limitations, loss by theft or otherwise, unless, subject to Section 9.1, caused by the negligence or willful misconduct of LESSOR or LESSOR’s employees, agents or contractors.

11.4 Signage. LESSEE may maintain signage on the Premises with LESSOR’s consent, such consent not to be unreasonably withheld, conditioned or delayed.

ARTICLE XII

Covenant Against Liens

12.1 Liens of LESSEE. If because of any act or omission of LESSEE, any mechanic’s lien or other lien, charge or order for the payment of money shall be filed against any portion of the Premises, LESSEE shall, at its own cost and expense, cause the same to be discharged of record or bonded within ninety (90) days after written notice from LESSOR to LESSEE of the filing thereof.

12.2 Removal of Liens. If LESSEE shall fail to cause such liens to be discharged of record or bonded within the aforesaid ninety (90) day period or satisfy such liens within thirty (30) days after any judgment in favor of such lien holders from which no further appeal might be taken, then LESSOR shall have the right to cause the same to be discharged. All amounts paid by LESSOR to cause such liens to be discharged shall constitute additional rent payable by LESSEE to LESSOR.

ARTICLE XIII

Environmental Matters

13.1 Conduct of Operations. During the Term, LESSEE shall conduct its operations at the Premises in material compliance with applicable Environmental Laws.

13.2 Hazardous Materials. LESSEE shall not cause nor permit, nor allow any of LESSEE’s employees, agents, customers, visitors, invitees, licensees, contractors, assignees or sublessee’s (individually, a “LESSEE PARTY” and collectively, “LESSEE PARTIES”) to cause or permit, any Hazardous Materials to be brought upon, stored, manufactured, generated, blended, handled,

- 12 -

recycled, treated, disposed or used on, under or about the Premises, except in material compliance with all applicable Environmental Laws. As used herein, “Hazardous Materials” means any chemical, substance, material, controlled substance, waste or combination thereof, whether solid, semi-solid, liquid or gaseous, which is hazardous to human health or safety or to the environment due to its radioactivity, ignitability, corrosivity, reactivity, explosivity, toxicity, carcinogenicity, mutagenicity, phytotoxicity, infectiousness or other harmful properties or effects, including, without limitation, petroleum and petroleum byproducts, asbestos, radon, polychlorinated biphenyls (PCBs), refrigerants regulated by the Environmental Protection Agency’s “Refrigerant Recycling Rule,” as amended from time to time, and all of those chemicals, substances, materials, controlled substances, wastes or combinations thereof which are now or become in the future listed, defined or regulated in any manner by any Environmental Law based upon, directly or indirectly, such properties or effects. As used herein, “Environmental Laws” means any and all federal, state or local laws, regulations, standards, decisions of courts, ordinances, rules, codes, orders, decrees, directives, guidelines, permits or permit conditions concerning the protection of public health and safety, worker health and safety or the environment, currently existing and as amended, enacted, issued or adopted in the future which are or become applicable to and enforceable upon LESSEE, or the Premises. LESSEE and LESSEE PARTIES shall comply in all material respects with all Environmental Laws, and promptly notify LESSOR in writing of the material violation of any Environmental Law or any reportable spill and/or release of any Hazardous Materials, in, on, under or about the Premises or the improvements thereon or the soil or groundwater thereunder. LESSOR shall have the right to enter upon and inspect the Premises and to conduct tests, monitoring and investigations, in each case after 24 hour prior notice to LESSEE or as is otherwise reasonably necessary in the operation and/or protection of the Premises, its components or persons therein; provided however, that LESSOR shall take reasonable commercial efforts to minimize any disturbance to LESSEE or any interruption of LESSEE’s business. If such tests indicate the presence of any environmental condition caused or exacerbated during the Term by LESSEE or any LESSEE PARTY or arising during LESSEE’s occupancy, LESSEE shall reimburse LESSOR for the cost of conducting such tests (except to the extent such environmental condition arises from or is caused or exacerbated by the gross negligence or willful misconduct of LESSOR, its employees, agents, contractors, guests or invitees). The phrase “environmental condition” shall mean any adverse condition relating to the release of any Hazardous Materials to the environment, including surface water, groundwater, drinking water supply, land, surface or subsurface strata or the ambient air. In the event of any such environmental condition, LESSEE shall promptly take any and all steps necessary to rectify the same to the satisfaction of the applicable agencies.

13.3 LESSEE’s Indemnification. LESSEE shall indemnify, defend and hold harmless LESSOR from and against any and all claims, judgments, causes of action, damages, penalties, fines, costs, liabilities, losses and expenses arising at any time during or after the Term from (a) LESSEE’s and/or any LESSEE PARTY’s breach of this Section 13 or (b) the presence, spill and/or release of Hazardous Materials brought onto the Premises by or for LESSEE and/or any LESSEE PARTY during the Term, in each case except to the extent arising from, caused by or in any way connected to the gross negligence or willful misconduct of LESSOR, its employees, agents, contractors, guests or invitees. This indemnity shall include, without limitation, the cost of any required or necessary repair, cleanup or detoxification, and the preparation and implementation of any closure, monitoring or other required plans, whether such action is required or necessary prior to or following the termination of this Lease. Neither the written consent by

- 13 -

LESSOR to the presence of Hazardous Materials on, under or about the Premises, nor the strict compliance by LESSEE with all Environmental Laws, shall excuse LESSEE from LESSEE’s obligation of indemnification pursuant hereto. LESSEE’s obligations pursuant to the foregoing indemnity shall survive the expiration or termination of this Lease.

13.4 LESSOR’s Indemnification. LESSOR shall indemnify, defend and hold harmless LESSEE from and against any and all claims, judgments, causes of action, damages, penalties, fines, costs, liabilities, losses and expenses arising at any time during or after the Term from (a) any environmental condition or Hazardous Materials that come to exist on, under or about the Premises during the Term as a result of or in connection with the activities of LESSOR, its employees, agents, contractors, guests or invitees or (b) any environmental condition or Hazardous Materials which come to exist on, under or about the Premises after the Term, in each case except to the extent arising from, caused by or in any way connected to the negligence or willful misconduct of LESSEE, its employees, agents, contractors, guests or invitees. This indemnity shall include, without limitation, the cost of any required or necessary repair, cleanup or detoxification, and the preparation and implementation of any closure, monitoring or other required plans, whether such action is required or necessary prior to or following the termination of this Lease. Neither the written consent by LESSEE to the presence of Hazardous Materials on, under or about the Premises, nor the strict compliance by LESSOR with all Environmental Laws, shall excuse LESSOR from LESSOR’s obligation of indemnification pursuant hereto. LESSOR’s obligations pursuant to the foregoing indemnity shall survive the expiration or termination of this Lease.

13.5 Surrender of the Premises. Notwithstanding any other provision in this Lease, upon expiration or earlier termination of this Lease, LESSEE shall conduct an environmental site assessment (“ESA”) of the Premises with the objective of evaluating the potential for releases of Hazardous Materials on the Premises as a result of LESSEE’s operations on the Premises during the Term. The ESA shall be conducted, at the expense of LESSEE, by a third party environmental consultant chosen by LESSEE and approved by LESSOR, which approval shall not be unreasonably withheld. If the ESA reveals evidence of a release of Hazardous Materials from LESSEE’s operations at the Premises during the Term, then LESSEE shall conduct remedial action to address such release as required by applicable Environmental Laws. LESSEE’s obligation to complete any such remedial action initiated under this Section 13.5 shall survive the termination or expiration of this Lease.

ARTICLE XIV

Surrender

14.1 Surrender. LESSEE shall deliver and surrender to LESSOR possession of the Premises upon expiration of this Lease or its earlier termination in substantially the same condition as exists on the Effective Date (except for normal wear and tear and, subject to the provisions of Article XV, damage by fire or other casualty, the elements and any cause beyond LESSEE’s reasonable control).

- 14 -

14.2 Surrender of LESSEE’s Machinery and Equipment & Trade Fixtures. Upon the expiration or earlier termination of this Lease, LESSEE shall convey, transfer and deliver to LESSOR on an AS IS, WHERE IS BASIS title to all equipment, fixtures and machinery installed or placed in the Premises including without limitation, the Contributed Machinery and Equipment, for a total purchase price of ONE DOLLAR ($1.00). LESSEE’s obligation to observe or perform this covenant shall survive the expiration or termination of this Lease.

ARTICLE XV

Destruction Of Premises

15.1 Termination for Major Casualties. In the event that the Premises are damaged or destroyed by fire, windstorm or any other casualty (a “Casualty”) to such an extent that, in the commercially reasonable judgment of either party, (a) at least 75% of the rentable area of the Premises cannot be occupied and used by either party in the ordinary course of business or (b) any damage or destruction to the Premises cannot be repaired within one hundred eighty (180) days from the date of the Casualty (each such event, a “Material Casualty”), or if insurance proceeds (excluding the amount of the deductible under the applicable insurance) shall be insufficient to restore such Casualty (unless such insufficiency is the result of either party’s failure to maintain the insurance required under this Lease), then either party shall have the right to terminate this Lease as of the date of such Casualty (notwithstanding any contrary provisions in the Lease) by furnishing written notice to the other party to that effect not more than thirty (30) days after the Casualty. If either party so terminates this Lease under this Section 15.1, the Rent and additional rent with respect thereto shall be prorated and paid or refunded, as appropriate, from the date of the Material Casualty.

15.2 Restoration of Damage. In the event of a Casualty that is not a Material Casualty, or if neither party elects to exercise its right to terminate this Lease as provided in Section 15.1 above in connection with a Material Casualty, then LESSOR, at its expense (subject to reimbursement from any proceeds of insurance arising from the applicable Casualty), shall repair and restore the Premises to a condition at least equivalent to the condition that prevailed immediately before such Casualty with reasonable diligence and continuity. If, during the period of such repair and restoration, LESSEE is unable to reasonably use all or any part of the Premises in the ordinary course of LESSEE’s business without material interference or impairment, then LESSEE shall receive a reduction in the Rent and additional rent proportionate to the fraction of the Premises unusable by LESSEE in the ordinary course of its business without material interference or impairment from the date of the applicable Casualty until LESSEE is again reasonably able to use the entire Premises without material interference or impairment. If LESSOR is obligated to repair and restore the Premises as aforesaid, LESSEE shall make available to LESSOR all insurance proceeds received on account of the applicable Casualty (other than any insurance proceeds attributable to LESSEE’s property), and LESSOR shall apply such proceeds towards the cost of such repair and restoration to the extent necessary to comply with this Section 15.2.

- 15 -

ARTICLE XVI

Condemnation

16.1 Condemnation of the Premises. In the event that title to all or any material part of the Premises shall be taken for any public or quasi-public use under any statute or right of eminent domain, or by private purchase in lieu thereof, either party may terminate this Lease on the date of transfer of such title.

16.2 Notice of Service of Process. Each party shall give the other immediate notice of the service on them or either of them of any legal process in connection with any such condemnation proceedings. Each party shall execute and deliver to the other all reasonable instruments that may be reasonably required to effectuate the provisions hereof.

ARTICLE XVII

Events of Default and Remedies

17.1 LESSEE Default. The following shall constitute a LESSEE Default under this Lease: (a) if LESSEE shall fail to pay the Rent, and/or any additional rent, expense or charge under this Lease within ten (10) days after receipt by LESSEE of written notice that they are due; or (b) if LESSEE shall neglect or fail to perform or observe, in any material respect, any other covenants, terms, provisions or conditions to be performed or observed by LESSEE under this Lease within thirty (30) days after written notice of said default is given by LESSOR. If the default included in Section 17.1(b) cannot reasonably be cured within thirty (30) days, LESSEE shall not be in default of this Lease if LESSEE commences to cure the default within such thirty (30) day period and diligently and in good faith continues to cure the default.

17.2 LESSOR’s Remedies. Upon the occurrence and during the continuance of any LESSEE Default specified in Section 17.1, LESSOR may, at its option, terminate this Lease, in which case:

(a) Neither LESSEE nor any person claiming through or under LESSEE shall be entitled to acquire or remain in possession of the Premises, and LESSOR shall have no further liability hereunder to LESSEE or any person claiming through or under LESSEE, and if LESSEE or any such person is in possession, LESSEE or any such person shall forthwith quit and surrender the Premises to LESSOR without further demand or notice, and LESSOR may lawfully enter the Premises, using such remedies as may be available under the law, and remove all persons and chattels therefrom and LESSOR shall not be liable for damages or otherwise by reason of re-entry or termination of this Lease or its terms;

(b) LESSOR shall have the right of eviction and the right to invoke any remedy allowed at law or in equity as if re-entry, unlawful detainer proceedings and other remedies were not herein provided for; and

(c) Notwithstanding anything contained herein to the contrary, the exercise of any remedy provided pursuant to this Lease or under law shall not deprive LESSOR of other actions against the LESSEE for possession or rent, and all such remedies are non-exclusive and can be exercised concurrently or separately as LESSOR desires.

- 16 -

ARTICLE XVIII

Certificates/Waivers

18.1 Certificates. Either party shall, without charge, at any time and from time to time hereafter, within ten (10) business days after written request of the other, certify by written instrument duly executed and acknowledged to any mortgagee or purchaser, or proposed mortgagee or proposed purchaser, or any other person specified in such request: (a) as to whether this Lease has been supplemented or amended, and if so, the substance and manner of such supplement or amendment; (b) as to the validity, force and effect of this Lease, in accordance with its terms as then provided; (c) as to the existence of any default thereunder; (d) as to the existence of any offsets, counterclaims or defenses thereto on the part of such other party; (e) as to the commencement and expiration dates of the term of this Lease; and (f) as to any other matters as may reasonably be so requested. Any such certificate may be relied upon by the party requesting it and any other person to whom the same may be exhibited or delivered and the contents of such certificate shall be binding on the party executing the same.

18.2 LESSOR Waiver of Liens. LESSOR hereby expressly waives any landlord’s lien, whether contractual or statutory, to any of LESSEE’s Property. Additionally, from time to time, and in any event within thirty (30) days following a written request by LESSEE, LESSOR shall, unless LESSEE is then in default hereunder, execute and return to LESSEE a written waiver (on any form reasonably required) of LESSOR’s lien rights under applicable law with respect to any of LESSEE’s Property.

ARTICLE XIX

MISCELLANEOUS PROVISIONS

19.1 Assignment or Subleasing Prohibited. LESSEE is prohibited from subletting the Premises in whole or in part, or of transferring or in any way assigning or conveying this Lease in whole or in part to any person other than a subsidiary or an affiliate or parent corporation of LESSEE, without the prior written consent of LESSOR. If LESSEE sublets, transfers or in any way assigns or conveys this Lease, in whole or in part, to a subsidiary or an affiliate or parent corporation of LESSEE, LESSEE shall provide LESSOR with prior written notice of said action. LESSEE’s violation of this clause constitutes just cause for LESSOR to terminate and cancel the Lease.

19.2 Quiet Enjoyment. LESSEE, upon paying the Rent and all additional rent and other charges, and performing all the other terms of this Lease, shall quietly have and enjoy the Premises during the term of this Lease without hindrance or interference by anyone claiming by or through LESSOR.

- 17 -

19.3 Access.

(a) LESSOR reserves the right, in accordance herewith, to enter the Premises in order to inspect the same after 24 hour prior notice to LESSEE or as is otherwise reasonably necessary in the operation and/or protection of the Premises, its components or persons therein; provided however, that LESSOR shall take reasonable commercial efforts to minimize any disturbance to LESSEE or any interruption of LESSEE’s business.

(b) LESSEE will give LESSOR and its affiliates and their personnel, contractors, representatives and agents such access to the Premises as is reasonably necessary for LESSOR to perform the Alpha Manufacturing with respect to the Product and the Pipeline Products (with Alpha Manufacturing, Product and Pipeline Products having the meaning given to such terms in the Manufacturing Agreement).

19.4 Amendments. This Lease may not be amended, modified or terminated nor may any obligation hereunder be waived orally, and no such amendment, modification, termination or waiver will become effective for any purpose unless it is in writing and signed by the party against whom enforcement thereof is sought.

19.5 Waiver. Failure on the part of either party to complain of any action or non-action on the part of the other party, no matter how long the same may continue, shall never be deemed to be a waiver by such party of any of its rights hereunder. No waiver at any time of any of the provisions hereof by either party shall be construed as a waiver of any of the other provisions hereof, and either’s waiver at any time of any of the provisions hereof shall not be construed as a waiver at any subsequent time of the same provisions. The consent or approval by either party to or of any action by the other party requiring such consent or approval shall not be deemed to waive or render unnecessary said party’s consent or approval to or of any subsequent similar act.

19.6 Invalidity of Particular Provisions. If any term or provision of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.

19.7 Provisions Binding, Etc. Except as herein otherwise specifically provided, the terms hereof shall be binding upon and shall inure to the benefit of the successors and assigns, respectively, of LESSOR and LESSEE. Each term and each provision of this Lease to be performed by LESSEE shall be construed to be both a covenant and a condition. The reference contained to successors and assigns or LESSEE is not intended to constitute a consent to assignment by LESSEE, but has reference only to those instances in which LESSOR may later give written consent to a particular assignment as required by this Lease.

19.8 Governing Law. This Lease shall be governed exclusively by the provisions hereof and by the laws of the State of Delaware as the same may from time to time exist.

- 18 -

19.9 Notices. All notices, requests, consents and other communications hereunder shall be deemed given: (i) when delivered if delivered personally (including by courier); (ii) on the third day after mailing, if mailed, postage prepaid, by registered or certified mail (return receipt requested); (iii) on the day after mailing if

sent by a nationally recognized overnight delivery service which maintains records of the time, place, and recipient of delivery; or (iv) upon receipt of a confirmed transmission, if sent by telex, telecopy or facsimile transmission, in each case to the parties at the following addresses or to other such addresses as may be furnished in writing by one party to the others:

If intended for LESSOR, addressed to it at:

ABRAXIS BIOSCIENCE, LLC

11755 Wilshire Boulevard

Suite 2000

Los Angeles, CA 90025

Fax: (310) 883-3138

Attention: General Counsel

with copies to:

ABRAXIS BIOSCIENCE, INC.

11755 Wilshire Boulevard

Suite 2000

Los Angeles, CA 90025

Fax: (310) 883-3138

Attention: General Counsel

If intended for LESSEE, addressed to it at:

APP PHARMACEUTICALS, LLC

1501 East Woodfield Road

Suite 300 East

Schaumburg, IL 60173-5837

Attention: General Counsel

with copies to:

APP PHARMACEUTICALS, INC.

1501 East Woodfield Road

Suite 300 East

Schaumburg, IL 60173-5837

Attention : General Counsel

19.10 Right to Cure Defaults. Either party may, but shall not be obligated to, cure at any time, after written notice and reasonable opportunity to cure, any default by the other party under this Lease; and whenever a party so elects, all costs and expenses incurred by such party in curing a default, including, without limitation, reasonable attorneys’ fees together with interest on the amount of costs and expenses so incurred at the rate of two percent (2%) over and above the prevailing prime rate per annum charged by JP Morgan

- 19 -

Chase in New York, New York (the “Rate”) at the time, shall be paid by the defaulting party within ten (10) days from written demand and evidence of payment therefor, and as to LESSEE shall be recoverable as additional rent. Interest shall accrue at said rate from and after the due date of any payment of the Rent, additional rent or any payment by LESSEE or LESSOR described in this Lease.

19.11 Delivery of this Instrument. This instrument cannot be construed to be a proposal of either LESSOR to LESSEE, nor of LESSEE to LESSOR, and shall have no effect whatsoever between the parties herein named unless properly executed by both parties, it being understood that this instrument has been delivered for examination only, but without any purpose whatsoever of creating or confirming any contractual relationship between LESSOR and LESSEE; provided, however, that upon proper execution of this Lease by both parties, this Section 19.11 shall be null and void.

19.12 Headings. The headings throughout this Lease are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify or aid in the interpretation, construction or meaning of the provisions of this Lease.

19.13 Effect of Unavoidable Delays. The provisions of this section shall be applicable if there shall occur, during the Term, or prior to the commencement thereof any (i) strike(s), lockout(s) or labor dispute(s); or (ii) inability to obtain labor or materials, or reasonable substitutes therefor; or acts of God, governmental restrictions, regulations or controls, enemy or hostile governmental action, civil commotion, fire or other casualty or other conditions similar to those enumerated in this item (ii) beyond the reasonable control of the party obligated to perform. If LESSOR or LESSEE shall, as the result of any of the above described events, fail punctually to perform any obligation on its part to be performed, under this Lease, then such failure shall be excused and not be a breach of this Lease by the party in question, but only to the extent occasioned by such event. If any right or option of either party to take any action under or with respect to this Lease is conditioned upon the same being exercised within any prescribed period of time or at or before a named date, then such prescribed period of time and such named date shall be deemed to be extended or delayed, as the case may be for a period equal to the period of the delay occasioned by any above-described event. Notwithstanding anything herein contained, however, the provisions of this section shall not be applicable to LESSEE’s obligation to pay rent or its obligations to pay any other sum, monies, costs, charges or expenses required to be paid by LESSEE hereunder, and to LESSOR’s obligations under the provisions of Article IV.

19.14 No Representation. Neither LESSOR, LESSOR nor their respective agents have made any representation, warranty or promise with respect to the Premises, except as herein expressly set forth.

19.15 Relationship of Parties. LESSOR and LESSEE shall not be considered or deemed to be joint ventures or partners and neither shall have the power to bind or obligate the other except as set forth herein.

- 20 -

19.16 Counterparts. This Lease may be simultaneously executed in counterparts, each of which when so executed and delivered, shall constitute an original, fully enforceable counterpart for all purposes. Any such counterpart may be executed by facsimile signature with only verbal confirmation, and when so executed and delivered shall be deemed an original and such counterpart(s) together shall constitute only one original.

19.17 Severability. The provisions of this Lease shall be deemed separable. Therefore, if any part of this Lease is rendered void, invalid or unenforceable, such rendering shall not affect the validity or enforceability of the remainder of this Lease.

19.18 Authority. Each party warrants that it has full power, authority and legal right to execute and deliver this Lease and to keep and observe all of the terms and provisions of this Lease on such party’s part to be observed and performed. Each party warrants that this Lease is its valid and enforceable obligation.

19.19 Mitigation of Damages. The parties shall use reasonable commercial efforts to mitigate any of its damages hereunder.

19.20 No Broker. Each of LESSOR and LESSEE represents and warrants to the other party that it has not negotiated with any broker in connection with this Lease and that this Lease was negotiated directly by LESSOR and LESSEE. Each party hereby agrees to indemnify the other against all claims, damages, costs and expenses incurred by the indemnified party as a result of the breach of the foregoing representation or warranty by the indemnifying party.

19.21 Incorporation. The recitals set forth above under “RECITALS” are incorporated herein by reference.

19.22 Damages. Neither party shall be responsible for consequential, indirect, special or punitive damages.

19.23 Confidentiality – LESSOR. As used in this Section 19.24, “Information” means all information, whether printed, written, verbal, electronic on computer disk, CAD, photographic or otherwise, relating to LESSOR, including, without limiting the generality of the foregoing, financial information and all disclosure of information which relate to LESSOR’s manufacturing practices.

(a) In the event LESSEE receives any Information, LESSEE agrees to (i) immediately return to LESSOR any such Information, including, without limitation, any copies of the Information which may have been made, without retaining copies, summaries, extracts of information, analyses, reports or other documents that constitute Information and (ii) keep the knowledge of any Information in strict confidence and to not disclose, divulge or communicate, directly or indirectly, intentionally or inadvertently, Information to any person or entity. LESSEE shall not make any copies or reproduce the Information. Any Information obtained by LESSEE shall not confer any rights or interests in the Information to LESSEE or anyone else. All Information and any rights related thereto are and remain the exclusive and absolute property of LESSOR. This Lease does not constitute or create any duty or obligation on the part of LESSOR to provide any Information to LESSEE.

- 21 -

(b) If LESSEE or anyone else for whom LESSEE is liable breaches or attempts to breach the provisions of this Section 19.23, the injury to LESSOR may be irreparable and money damages may not be an adequate remedy. In such event, LESSOR shall be entitled, in addition to all remedies available at law or in equity, to obtain from any court of competent jurisdiction an injunction prohibiting LESSEE or such other person from any further breach or attempted breach of this Section 19.23.

19.24 Confidentiality – LESSEE. As used in this Section 19.24, “Information” means all information, whether printed, written, verbal, electronic on computer disk, CAD, photographic or otherwise, relating to LESSEE, including, without limiting the generality of the foregoing, financial information and all disclosure of information which relate to LESSEE’s manufacturing practices.

(a) In the event LESSOR receives any Information, LESSOR agrees to (i) immediately return to LESSEE any such Information, including, without limitation, any copies of the Information which may have been made, without retaining copies, summaries, extracts of information, analyses, reports or other documents that constitute Information and (ii) keep the knowledge of any Information in strict confidence and to not disclose, divulge or communicate, directly or indirectly, intentionally or inadvertently, Information to any person or entity. LESSOR shall not make any copies or reproduce the Information. Any Information obtained by LESSOR shall not confer any rights or interests in the Information to LESSOR or anyone else. All Information and any rights related thereto are and remain the exclusive and absolute property of LESSEE. This Lease does not constitute or create any duty or obligation on the part of LESSEE to provide any Information to LESSOR.

(b) If LESSOR or anyone else for whom LESSOR is liable breaches or attempts to breach the provisions of this Section 19.24, the injury to LESSEE may be irreparable and money damages may not be an adequate remedy. In such event, LESSEE shall be entitled, in addition to all remedies available at law or in equity, to obtain from any court of competent jurisdiction an injunction prohibiting LESSOR or such other person from any further breach or attempted breach of this Section 19.24.

19.25 Attorneys’ Fees. In any action or proceeding which either party brings against the other to enforce its rights hereunder, the no-prevailing party shall pay all costs incurred by the prevailing party, including reasonable attorneys’ fees, which amounts shall be a part of the judgment in said action or proceeding.

19.26 Entire Agreement. This Lease, including the Exhibits attached hereto, and the documents referred to herein, if any, constitute the entire agreement between LESSOR and LESSEE with respect to the leasing of the Premises, and shall not affect any prior or contemporaneous agreements, understandings, proposals and other representations between them.

- 22 -

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

ABRAXIS BIOSCIENCE, LLC		APP PHARMACEUTICALS, LLC
“LESSOR”		“LESSEE”
By:	/s/ Patrick Soon-Shiong	By:	/s/ Patrick Soon-Shiong
Name:	Patrick Soon-Shiong	Name:	Patrick Soon-Shiong
Title:	CEO	Title:	CEO

EX-10.7

Exhibit 10.7

EXECUTION COPY

LEASE AGREEMENT

between

ABRAXIS BIOSCIENCE, LLC

and

APP PHARMACEUTICALS, LLC

LEASE AGREEMENT

THIS LEASE AGREEMENT (this “Lease”), dated effective the 13^th day of November, 2007 (the “Effective Date”), is made by and between Abraxis BioScience, LLC, a Delaware limited liability company (“LESSOR”), and APP Pharmaceuticals, LLC, a Delaware limited liability company (“LESSEE”).

RECITALS

WHEREAS, LESSOR and LESSEE (and their respective parent companies) have entered into a Separation and Distribution Agreement dated as of the Effective Date (the “Separation Agreement”);

WHEREAS, simultaneously herewith, New Abraxis, Inc., to be renamed Abraxis BioScience, Inc., parent company of LESSOR, and LESSEE are entering into a Manufacturing Agreement (the “Manufacturing Agreement”);

WHEREAS, LESSOR and LESSEE have entered into a lease dated as of the date hereof for the property located at 2020 Ruby Street, Melrose Park, Illinois (the “Ruby Street Lease”);

WHEREAS, the LESSOR is the owner of that certain improved real property located at and commonly known as the Cornell warehouse facility indicated as “Phase 1a RMD Warehouse W-300”, “Phase 1b Warehouse 2 W-200”, and “Phase 1c Warehouse 1 W-300” in Exhibit A (together with all buildings, structures, fixtures and improvements and betterments thereon and appurtenances thereto other than the Machinery and Equipment (as defined in the Separation Agreement) of LESSOR) thereon attached hereto and made a part hereof (the “Property”);

WHEREAS, notwithstanding that LESSOR owns the Property and this Lease, LESSEE is, and remains, the owner of the Contributed Machinery and Equipment (as defined in the Separation Agreement) of LESSEE; and

WHEREAS, LESSOR desires to lease to LESSEE, and LESSEE desires to lease from LESSOR, (i) the Property, (ii) all improvements at any time existing thereon and (iii) all fixtures, equipment, furniture and machinery, excluding, for all purposes, the Machinery and Equipment of LESSOR (collectively, the “Premises”).

NOW, THEREFORE, in consideration of the mutual promises and premises hereinafter contained, it is hereby mutually agreed as follows:

ARTICLE I

Definitions

1.1 All capitalized terms used in this Lease and not defined herein shall have the meaning ascribed to such terms in the Separation Agreement.

ARTICLE II

Property

2.1 Lease. LESSOR hereby leases to LESSEE the LESSEE’s share of the Premises, hereinafter referred to as the “LESSEE Premises,” and LESSEE leases, hires and takes from LESSOR the LESSEE Premises. LESSEE has inspected the Premises and accepts the same “As Is.” The LESSEE Premises consists of approximately 71,000 square feet of warehouse space and shall include the right to use and obligation to share (as applicable) any common areas.

ARTICLE III

Term

3.1 Term. The term of this Lease shall commence on the Effective Date (the “Commencement Date”) and end on December 31, 2011 (the “Term”), unless earlier terminated in accordance with the provisions of this Lease.

3.2 Lease Extension Option.

(a) LESSEE may elect to extend the Term of this Lease until December 31, 2012 provided that the Ruby Street Lease is extended pursuant to Section 3.2 of that lease.

(b) For any extension, the base rent shall be the base rent of the immediately preceding lease year plus three percent (3%).

3.3 Holding Over. If LESSEE retains possession of the Premises or any part thereof after the termination of this Lease or expiration of the Term, LESSEE shall pay to LESSOR a monthly Rent equal to 2.00 times the monthly Rent in effect as of the last month of the Term. This charge shall not limit LESSOR’s right to seek such other remedy as may be available to it at law or equity.

ARTICLE IV

Rent

4.1 Rent. During the Term, LESSEE covenants and agrees to pay LESSOR, as annual rent for the Premises, the aggregate amount of $852,000, which shall be paid monthly (i.e., $71,000) on the 1^st day of each month during the Term at the LESSOR’s address for notice hereunder or otherwise as LESSOR may designate (the “Rent”).

ARTICLE V

Services and Utilities

5.1 Services and Utilities. During the Term, LESSOR shall be solely responsible for and shall pay expenses for all utilities used or consumed at the Premises, including but not limited to all water, gas, heat, light, power, telephone and other utilities and services

- 3 -

supplied to the Premises together with any taxes thereon. If LESSEE desires to install any equipment which shall require additional utility facilities or utility facilities of a greater capacity than the facilities existing on the Effective Date, such installation shall be subject to LESSOR’s prior written approval (such approval not to be unreasonably withheld, conditioned, denied or delayed) of LESSEE’s plans and specifications therefor.

5.2 LESSOR Not Responsible For Interruption of Service. LESSOR shall in no way be liable or responsible for any loss, damage or expense that LESSEE may sustain or incur by reason of any change, failure, interference, disruption or defect in the supply or character of the utilities furnished to the Premises, or if the quantity or character of the utilities supplied to the Premises are no longer available or suitable for LESSEE’s requirements, and no such change, failure, defect, unavailability or unsuitability shall constitute an actual or constructive eviction in whole or in part, or entitle LESSEE to any abatement or diminution of rent or additional rent, or relieve LESSEE from any obligations under the Lease; provided, however, if any service failure arises from the gross negligence or willful misconduct of LESSOR, then (a) the Rent and any additional rent payable under this Lease shall abate in proportion to the fraction of the total rentable area of the Premises that is materially affected by such service failure and (b) LESSEE shall have the right to pursue any and all remedies available at law or in equity.

ARTICLE VI

Repairs and Maintenance

6.1 LESSEE’s Obligations.

(a) Except for Capital Repairs (as hereinafter defined), LESSEE shall be responsible for (i) all repairs (including replacements) necessary to maintain the Premises in substantially the same condition as exists on the Effective Date, normal wear and tear and damage by fire or other casualty and eminent domain excepted. LESSEE shall not be responsible for any maintenance, repairs or replacement in or affecting any portions of the Premises occupied by any tenant or occupant other than LESSEE. In the event that LESSEE has not performed such repairs and LESSOR elects to perform the repair, after written notice and a reasonable opportunity to cure, LESSEE shall reimburse LESSOR the repair costs within thirty (30) days following LESSEE’s receipt of LESSOR’s written demand and evidence of payment therefor.

(b) LESSEE shall also be responsible for making any repairs to the Property caused by any act, omission or negligence of LESSEE or its employees, agents, invitees, licensees, subtenants, or contractors and shall indemnify and save harmless LESSOR from any and all expenses, liens, claims, or damages to either persons or property arising out of, or resulting from the failure to make such repairs; provided, however, LESSEE shall not be obligated to make any repairs to the Property if the need for such repairs is caused by LESSOR or its agents, contractors, employees, guests or invitees. LESSOR shall have the right to make any repairs that are the responsibility of LESSEE under this Section 6.1(b) at LESSEE’s sole cost and expense after written notice and reasonable opportunity to make the repair, and LESSEE shall reimburse LESSOR the repair costs within thirty (30) days following LESSEE’s receipt of LESSOR’s written demand and evidence of payment therefor.

- 4 -

(c) All repairs conducted by LESSEE shall be accomplished promptly with first class materials, in a good and workmanlike manner, in compliance with all applicable laws of all governmental authorities and in a style, character and quality conforming to the existing construction of the Premises.

6.2 LESSOR’s Obligations. For the purposes of this Lease, “Capital Repairs” shall mean (i) any maintenance, repairs or replacements to the roof, foundation and structural elements of the Premises, (ii) any maintenance, repairs or replacements to the Premises’ systems (which shall include the heating, ventilating, air-conditioning, plumbing, electrical, mechanical and other systems and equipment serving the Premises generally), the common areas or the exterior of the Premises and (iii) maintenance, repairs or replacements to the Premises required to comply with any laws applicable to the Premises (to the extent not relating to LESSEE’s use or occupancy of the Premises) enacted or promulgated after the date of this Lease, in each case, the cost of which is properly characterized as property, plant and equipment according to generally accepted accounting practices. LESSOR, at its expense (subject to reimbursement by LESSEE to the extent provided in Section 6.1 (b)), shall be responsible for all Capital Repairs necessary to keep the Premises in as good condition as exists as of the Effective Date or to comply with any laws applicable to the Premises (to the extent not relating to LESSEE’s use or occupancy of the Premises) enacted or promulgated after the Effective Date. LESSOR shall complete such repairs in a good and workmanlike manner consistent with normal and customary industry standards for buildings similar to the Premises and in compliance with all applicable laws.

ARTICLE VII

Alterations, and Additions

7.1 Alterations and Additions. LESSEE shall have the right, from time to time, without LESSOR’s consent, to make interior alterations, improvements and/or additions in and to the Premises that will have no effect on the roof, foundation or other structural elements of the Premises (the “Building Structure”) and will have no adverse effect on the heating, ventilating, air-conditioning, plumbing, electrical, mechanical and other systems and equipment serving the Premises generally (the “Building Systems”). LESSEE may make alterations, improvements and/or additions that affect the exterior of the Premises or may have a material adverse effect on the Building System only after first obtaining the prior written consent of LESSOR, which consent shall not be unreasonably withheld, conditioned, delayed or denied. All such approved additions, alterations or improvements shall be in accordance to plans and specifications prepared by a duly qualified architect or engineer who shall submit such plans and specifications to LESSOR for written approval, not to be unreasonably withheld, conditioned, delayed or denied. All alterations, improvements, and additions to the Premises shall be made in accordance with all applicable laws and shall at once when made or installed be deemed to have attached to the freehold and to have become the property of LESSOR and shall remain for the benefit of LESSOR at the end of the Term or other earlier termination of this Lease. Any equipment installed by LESSEE during the Term shall at LESSEE’s election be removed at the expiration or termination of this Lease or shall remain at the Premises. In the event of making such alterations, improvements, and/or additions as herein provided, LESSEE shall indemnify and save harmless LESSOR from any and all expenses, liens, claims, or damages to either persons or Premises arising out of, or resulting from the undertaking or making of said alterations, additions, and improvements. Notwithstanding anything to the contrary set forth herein, LESSEE shall have the right, without LESSOR’s consent or approval, to make non-structural alterations of less than $50,000 in any instance.

- 5 -

ARTICLE VIII

Taxes

8.1 Payment of Taxes. LESSOR shall pay all real property taxes applicable to the Premises. LESSOR’s obligations under this Section 8.1 shall survive the expiration or termination of this Lease.

8.2 Definition of Real Property Tax. As used herein, the term “real property tax” shall include any form of fee or tax imposed by any authority having the direct or indirect power to tax or assess, including any city, county, state or federal government, any school, agricultural, lighting, drainage or other improvement district thereof, or any private owners association created by covenants, conditions and restrictions binding on the Premises, as against any legal or equitable interest of LESSOR in the Premises, or as against LESSOR’s business of leasing the Premises. The term “real property tax” shall also include any tax, fee, levy, assessment or charge, or any increase therein, imposed by reason of events occurring during the Term, including, but not limited to, a change in the ownership of the Premises. Notwithstanding the foregoing, “real property tax” shall not include: (i) all excess profits taxes, franchise taxes, succession taxes, estate taxes, capital stock taxes, inheritance taxes, gift taxes, mortgage taxes, federal and state income taxes or any other taxes imposed upon or measured by LESSOR’s gross income or profits unless the same is specifically imposed in lieu of real estate taxes or ad valorem taxes; (ii) penalties for late payments; (iii) special assessments; and (iv) transfer taxes imposed upon any transfer of the Premises or any interest therein.

8.3 Personal Property Taxes.

(a) LESSEE shall pay prior to delinquency all taxes assessed against and levied upon LESSEE’s trade fixtures, furnishings, Machinery and Equipment of LESSEE and all other personal property of LESSEE contained in the Premises or otherwise owned or operated by LESSEE at the Premises. When possible, LESSEE shall cause said trade fixtures, furnishings, Machinery and Equipment of LESSEE and all other personal property to be assessed and billed separately from the real property of LESSOR.

(b) If any of LESSEE’s personal property shall be assessed and billed with LESSOR’s real property, LESSEE shall pay LESSOR the taxes attributable to LESSEE within thirty (30) days after receipt of a written statement setting forth the taxes applicable to LESSEE’s property.

- 6 -

ARTICLE IX

Indemnification; Insurance

9.1 Indemnity. LESSEE shall indemnify, defend and hold harmless LESSOR (solely with respect to LESSOR’s position as the owner of the Premises and the landlord under this Lease) from and against any and all claims arising from LESSEE’s use of the Premises, or from the conduct of LESSEE’s business or from any activity, work or things done, permitted or suffered by LESSEE in or about the Premises or elsewhere, and shall further indemnify, defend and hold harmless LESSOR (solely with respect to LESSOR’s position as the owner of the Premises and the landlord under this Lease) from and against any and all claims arising from any breach or default in the performance of any obligation on LESSEE’s part to be performed under the terms of this Lease or arising from any negligence of LESSEE, or any of LESSEE’s agents, contractors or employees, and from and against all costs, attorneys’ fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon; provided, however, LESSEE shall not indemnify, defend or hold harmless LESSOR from and against any claim, liability, expense, lawsuit, cost, loss or other damage, including reasonable attorneys’ fees, which arise from or are caused by or in anyway connected to the negligence or willful misconduct of LESSOR, its employees, agents, contractors, guests or invitees. Subject to Section 9.2 below, LESSOR shall indemnify, defend and hold harmless LESSEE (solely with respect to LESSEE’s position as the tenant under this Lease) from and against any and all claims arising from LESSOR’s use of or entry onto the Premises, and shall further indemnify, defend and hold harmless LESSEE (solely with respect to LESSEE’s position as the tenant under this Lease) from and against any and all claims arising from any breach or default in the performance of any obligation on LESSOR’s part to be performed under the terms of this Lease or arising from any gross negligence or willful misconduct of LESSOR, or any of LESSOR’s agents, contractors or employees and from and against all costs, attorneys’ fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon; provided, however, LESSOR shall not indemnify, defend or hold harmless LESSEE from and against any claim, liability, expense, lawsuit, cost, loss or other damage, including reasonable attorneys’ fees, which arise from or are caused by or in anyway connected to the negligence or willful misconduct of LESSEE, its employees, tenants, agents, guests or invitees.

9.2 Exemption of LESSOR From Liability.

(a) Except to the extent caused by the gross negligence or willful misconduct of LESSOR, its employees, agents, guests or invitees, LESSEE hereby agrees that LESSOR and its agents shall not be liable for injury to LESSEE’s business or any loss of income therefrom or for damage to the goods, wares, merchandise or other property of LESSEE, LESSEE’s employees, invitees, customers or any other person in or about the Premises, nor shall LESSOR be liable for injury to the person of LESSEE, LESSEE’s employees, agents or contractors, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction, or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning, light fixtures or from any other cause whether said damage or injury results from conditions arising upon the Premises or upon other portions of the building of which the Premises are a part, or from other sources or places, and regardless of whether the cause of such damage or injury or the means of repairing the same is inaccessible to LESSEE. LESSOR shall not be liable for any damages arising from any act or neglect of any other lessee, if any, of the building in which the Premises are located.

- 7 -

(b) No directors, officers, employees or agents of LESSOR or individual, member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be LESSOR or any successor in interest, shall be subject to personal liability with respect to any of the covenants or conditions of this Lease. LESSEE will not seek recourse against the directors, officers, employees or agents of LESSOR or an individual, member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be LESSOR or any successor-in-interest or any of their personal assets for such satisfaction. It is mutually agreed that this clause is and shall be considered an integral part of this Lease.

(c) No directors, officers, employees or agents of LESSEE or individual, member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be LESSEE or any successor in interest, shall be subject to personal liability with respect to any of the covenants or conditions of this Lease. LESSOR will not seek recourse against the directors, officers, employees or agents of LESSEE or an individual, member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be LESSEE or any successor-in-interest or any of their personal assets for such satisfaction. It is mutually agreed that this clause is and shall be considered an integral part of this Lease.

(d) Remedies and limitations thereon set forth in this Lease shall only apply in this Lease.

9.3 Insurance.

(a) LESSOR shall obtain and maintain “all risk” property and casualty insurance on the Property, including the Premises. LESSEE shall pay the cost of the premiums for said insurance pertaining to the Premises or, if LESSOR consents, obtain Property & General Liability coverage of its own on the Premises, with LESSOR as loss payee on the Property and as additional named insured on the general liability policy. LESSEE shall carry and maintain at all times throughout the Term, at its expense, insurance with terms, coverage and companies satisfactory to LESSOR:

(i) commercial (comprehensive) liability insurance, with coverage against assumed or contractual liability under this Lease, with respect to liability arising out of ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto, to afford protection with respect to personal injury, loss of life and property damage, of not less than $2,000,000 per occurrence combined single limit subject to a $2,000,000 general aggregate;

(ii) “all risk” property insurance, including boiler and machinery comprehensive form, if applicable, covering damage to or loss of any of LESSEE’s personal property, fixtures, equipment and alterations, including electronic data processing equipment (and coverage for the full replacement cost thereof, including business interruption of LESSEE), together with, if the property of LESSEE’s invitees is to be kept in the Premises, warehouser’s legal liability or bailee customers insurance for the full replacement cost of the property belonging to invitees and located in the Premises; and

(iii) worker’s compensation insurance and employer’s liability insurance in amounts required by applicable law or statute covering all persons employed in connection with LESSEE.

- 8 -

(b) LESSEE’s Contractor Insurance. LESSEE shall require any contractor of LESSEE performing work on the Premises to carry and maintain, at no expense to LESSOR:

(i) worker’s compensation insurance in form and amounts required by law; and

(ii) public liability insurance insuring LESSEE and LESSOR as additional insured, against liability which may arise on account of any alteration, addition, improvement or construction, written on a claims occurrence basis with minimum limits of $1,000,000/occurrence (it being understood that this is public liability insurance and not product liability insurance).

(c) Insurance Companies. Insurance required to be maintained by LESSEE shall be written by companies licensed to do business in the state in which the Premises are located and having, at the time the initial policies are issued, a General Policyholders Rating of at least “A-/VII” (or such higher rating as may be required by a lender having a lien on the Premises) as set forth in the most current issue of “Best’s Insurance Guide.”

(d) Policy Requirements. Comprehensive commercial liability and “all risk” property insurance policies evidencing such insurance shall, with respect to comprehensive commercial liability policies, name LESSOR and/or its designee(s) as additional insured and, with respect to “all risk” property insurance policies, name LESSOR and/or its designee(s) as loss payee, shall be primary and noncontributory and shall contain a provision, by means of endorsement or otherwise, whereby the insurer agrees that such policy shall not be cancelled, materially changed or not renewed without at least thirty (30) days advance written notice to LESSOR (except in case of cancellation for non-payment of premium, in which case ten (10) days advance written notice shall be sufficient) at the address set forth herein, or to such other party or address as may be designated by LESSOR or its designee from time to time. Such commitment to provide prior notice of cancellation, modification or non-renewal shall be without qualifications. All liability insurance policies shall be written on a claims occurrence basis and have a separation of insureds endorsement.

(e) Certificates of Insurance. Prior to the Commencement Date and thereafter on the anniversary of the issuance of each policy LESSEE shall furnish to LESSOR certificates of insurance evidencing the coverage under each of the policies required by LESSOR herein. Said certificate shall include an acknowledgment of the commitment to provide LESSOR thirty (30) days’ prior written notice of cancellation, modification or non-renewal (except ten (10) days for non-payment).

(f) LESSEE’s Failure to Comply with Insurance Requirements. In the event that LESSEE fails to comply with LESSEE’S insurance requirements as stated herein, then, in addition to (and not in lieu of) all other remedies that LESSOR may have hereunder for a breach by LESSEE, LESSOR may, but shall not be obligated to, obtain such insurance at LESSOR’s sole option and keep the same in effect, and LESSEE shall pay LESSOR the premium cost thereof upon demand. It is agreed, however, that LESSOR is not responsible for any inadequacy of insurance protection purchase by LESSEE or by LESSOR on behalf of LESSEE.

- 9 -

(g) Mutual Waiver of Subrogation. Neither LESSOR nor LESSEE shall be liable to the other or to any insurance company (by way of subrogation or otherwise) providing coverage for any loss or damage to any building, structure or other tangible property, or any resulting loss of income, even though such loss or damage might have been occasioned by the negligence of the other contracting party, its agents or employees, provided and to the extent such loss or damage is covered by insurance, it being acknowledged and agreed that the amount of any insurance deductibles is expressly excluded from the waiver provisions herein set forth. Notwithstanding the foregoing, the cost of any damage not covered by insurance shall be borne by the responsible party.

(h) Notice of Fire. LESSEE shall give immediate notice to LESSOR in case of fire or accidents in the Premises or of defects therein or in any fixtures or equipment and both parties shall procure a waiver of right of subrogation against one another on the part of all insurance carriers in connection with all insurance policies covering losses arising out of destruction or damage to the Premises or its contents.

ARTICLE X

Compliance with Requirements

10.1 Compliance. LESSEE will use commercially reasonable efforts not to do any act or thing which constitutes a public or private nuisance. LESSOR will join in the application for any permit or authorization with respect to any Legal Requirements if such joinder is necessary. The term “Legal Requirements” shall mean all statutes, codes, ordinances, rules, regulations, orders, judgments or decrees of governments, authorities, agencies, officials and officers which now or at any time hereafter may be applicable to the Property.

ARTICLE XI

[Intentionally Omitted]

ARTICLE XII

Covenant Against Liens

12.1 Liens of LESSEE. If because of any act or omission of LESSEE, any mechanic’s lien or other lien, charge, or order for the payment of money shall be filed against any portion of the Premises, LESSEE shall, at its own cost and expense, cause the same to be discharged of record or bonded within ninety (90) days after written notice from LESSOR to LESSEE of the filing thereof.

12.2 Removal of Liens. If LESSEE shall fail to cause such liens to be discharged of record or bonded within the aforesaid ninety (90) day period or satisfy such liens within thirty (30) days after any judgment in favor of such lien holders from which no further appeal might be taken, then LESSOR shall have the right to cause the same to be discharged. All amounts paid by LESSOR to cause such liens to be discharged shall constitute additional rent payable by LESSEE to LESSOR.

- 10 -

ARTICLE XIII

Environmental Matters

13.1 Conduct of Operations. During the Term, LESSEE shall conduct its operations at the Premises in material compliance with applicable Environmental Laws.

13.2 Hazardous Materials. LESSEE shall not cause nor permit, nor allow any of LESSEE’s employees, agents, customers, visitors, invitees, licensees, contractors, assignees or sublessee’s (individually, a “LESSEE PARTY” and collectively, “LESSEE PARTIES”) to cause or permit, any Hazardous Materials to be brought upon, stored, manufactured, generated, blended, handled, recycled, treated, disposed or used on, under or about the Premises, except in material compliance with all applicable Environmental Laws. As used herein, “Hazardous Materials” means any chemical, substance, material, controlled substance, waste or combination thereof, whether solid, semi-solid, liquid or gaseous, which is hazardous to human health or safety or to the environment due to its radioactivity, ignitability, corrosivity, reactivity, explosivity, toxicity, carcinogenicity, mutagenicity, phytotoxicity, infectiousness or other harmful properties or effects, including, without limitation, petroleum and petroleum byproducts, asbestos, radon, polychlorinated biphenyls (PCBs), refrigerants regulated by the Environmental Protection Agency’s “Refrigerant Recycling Rule,” as amended from time to time, and all of those chemicals, substances, materials, controlled substances, wastes or combinations thereof which are now or become in the future listed, defined or regulated in any manner by any Environmental Law based upon, directly or indirectly, such properties or effects. As used herein, “Environmental Laws” means any and all federal, state or local laws, regulations, standards, decisions of courts, ordinances, rules, codes, orders, decrees, directives, guidelines, permits or permit conditions concerning the protection of public health and safety, worker health and safety or the environment, currently existing and as amended, enacted, issued or adopted in the future which are or become applicable to and enforceable upon LESSEE, or the Premises. LESSEE and LESSEE PARTIES shall comply in all material respects with all Environmental Laws and promptly notify LESSOR in writing of the material violation of any Environmental Law or any reportable spill and/or release of any Hazardous Materials, in, on, under or about the Premises or the improvements thereon or the soil or groundwater thereunder. LESSOR shall have the right to enter upon and inspect the Premises and to conduct tests, monitoring and investigations, in each case after 24 hour prior notice to LESSEE or as is otherwise reasonably necessary in the operation and/or protection of the Premises, its components or persons therein; provided however, that LESSOR shall take reasonable commercial efforts to minimize any disturbance to LESSEE or any interruption of LESSEE’S business. If such tests indicate the presence of any environmental condition caused or exacerbated during the Term by LESSEE or any LESSEE PARTY or arising during LESSEE’s occupancy, LESSEE shall reimburse LESSOR for the cost of conducting such tests (except to the extent such environmental condition arises from or is caused or exacerbated by the gross negligence or willful misconduct of LESSOR, its employees, agents, contractors, guests or invitees). The phrase “environmental condition” shall mean any adverse condition relating to the release of any Hazardous Materials to the environment, including surface water, groundwater, drinking water supply, land, surface or subsurface strata or the ambient air. In the event of any such environmental condition, LESSEE shall promptly take any and all steps necessary to rectify the same to the satisfaction of the applicable agencies.

- 11 -

13.3 LESSEE’s Indemnification. LESSEE shall indemnify, defend and hold harmless LESSOR from and against any and all claims, judgments, causes of action, damages, penalties, fines, costs, liabilities, losses and expenses arising at any time during or after the Term from (a) LESSEE’s and/or any LESSEE PARTY’s breach of this Section 13 or (b) the presence, spill and/or release of Hazardous Materials brought onto the Premises by or for LESSEE and/or any LESSEE PARTY during the Term, in each case except to the extent arising from, caused by or in any way connected to the gross negligence or willful misconduct of LESSOR, its employees, agents, contractors, guests or invitees. This indemnity shall include, without limitation, the cost of any required or necessary repair, cleanup or detoxification, and the preparation and implementation of any closure, monitoring or other required plans, whether such action is required or necessary prior to or following the termination of this Lease. Neither the written consent by LESSOR to the presence of Hazardous Materials on, under or about the Premises, nor the strict compliance by LESSEE with all Environmental Laws, shall excuse LESSEE from LESSEE’s obligation of indemnification pursuant hereto. LESSEE’s obligations pursuant to the foregoing indemnity shall survive the expiration or termination of this Lease.

13.4 LESSOR’s Indemnification. LESSOR shall indemnify, defend and hold harmless LESSEE from and against any and all claims, judgments, causes of action, damages, penalties, fines, costs, liabilities, losses and expenses arising at any time during or after the Term from (a) any environmental condition or Hazardous Materials that come to exist on, under or about the Premises during the Term as a result of or in connection with the activities of LESSOR, its employees, agents, contractors, guests or invitees or (b) any environmental condition or Hazardous Materials which come to exist on, under or about the Premises after the Term, in each case except to the extent arising from, caused by or in any way connected to the negligence or willful misconduct of LESSEE, its employees, agents, contractors, guests or invitees. This indemnity shall include, without limitation, the cost of any required or necessary repair, cleanup or detoxification, and the preparation and implementation of any closure, monitoring or other required plans, whether such action is required or necessary prior to or following the termination of this Lease. Neither the written consent by LESSEE to the presence of Hazardous Materials on, under or about the Premises, nor the strict compliance by LESSOR with all Environmental Laws, shall excuse LESSOR from LESSOR’s obligation of indemnification pursuant hereto. LESSOR’s obligations pursuant to the foregoing indemnity shall survive the expiration or termination of this Lease.

13.5 Surrender of the Premises. Notwithstanding any other provision in this Lease, upon expiration or earlier termination of this Lease, LESSEE shall conduct an environmental site assessment (“ESA”) of the Premises with the objective of evaluating the potential for releases of Hazardous Materials on the Premises as a result of LESSEE’s operations on the Premises during the Term. The ESA shall be conducted, at the expense of LESSEE, by a third-party environmental consultant chosen by LESSEE and approved by LESSOR, which approval shall not be unreasonably withheld. If the ESA reveals evidence of a release of Hazardous Materials from LESSEE’s operations at the Premises during the Term, then LESSEE shall conduct remedial action to address such release as required by applicable Environmental Laws. LESSEE’s obligation to complete any such remedial action initiated under this Section 13.5 shall survive the termination or expiration of this Lease.

- 12 -

ARTICLE XIV

Surrender

14.1 Surrender. LESSEE shall deliver and surrender to LESSOR possession of the Premises upon expiration of this Lease or its earlier termination in substantially the same condition as exists on the Effective Date (except for normal wear and tear and, subject to the provisions of Article XV, damage by fire or other casualty, the elements and any cause beyond LESSEE’s reasonable control).

14.2 Surrender of LESSEE’s Machinery and Equipment & Trade Fixtures. Upon the expiration or earlier termination of this Lease, LESSEE shall convey, transfer and deliver to LESSOR on an AS IS, WHERE IS BASIS title to all equipment, fixtures and machinery installed or placed in the Premises for a total purchase price of ONE DOLLAR ($1.00) except for all of LESSEE’s assets at the Premises that LESSEE elects to remove (including, without limitation, any inventory, records, raw materials, WIP, furnished goods, supplies, vehicles, office furniture, computers and other hardware and software) (collectively the “Retained Equipment”), whose title shall be retained by LESSEE on the expiration or earlier termination of this Lease. Within thirty (30) days from the expiration or earlier termination of this Lease, LESSEE shall remove the Retained Equipment from the Premises at no cost to LESSOR. Any damage to the Premises caused by the removal of the Retained Equipment shall be restored by LESSEE to the condition that existed prior to such removal. LESSEE’s obligation to observe or perform this covenant shall survive the expiration or termination of this Lease.

ARTICLE XV

Destruction Of Premises

15.1 Termination for Major Casualties. In the event that the Premises are damaged or destroyed by fire, windstorm or any other casualty (a “Casualty”) to such an extent that, in the commercially reasonable judgment of either party, (a) at least 75% of the rentable area of the Premises cannot be occupied and used by either party in the ordinary course of business or (b) any damage or destruction to the Premises cannot be repaired within one hundred eighty (180) days from the date of the Casualty (each such event, a “Material Casualty”), or if insurance proceeds (excluding the amount of the deductible under the applicable insurance) shall be insufficient to restore such Casualty (unless such insufficiency is the result of either party’s failure to maintain the insurance required under this Lease), then either party shall have the right to terminate this Lease as of the date of such Casualty (notwithstanding any contrary provisions in the Lease) by furnishing written notice to the other party to that effect not more than thirty (30) days after the Casualty. If either party so terminates this Lease under this Section 15.1, the Rent and additional rent with respect thereto shall be prorated and paid or refunded, as appropriate, from the date of the Material Casualty.

- 13 -

15.2 Restoration of Damage. In the event of a Casualty that is not a Material Casualty, or if neither party elects to exercise its right to terminate this Lease as provided in Section 15.1 above in connection with a Material Casualty, then LESSOR, at its expense (subject to reimbursement from any proceeds of insurance arising from the applicable Casualty), shall repair and restore the Premises to a condition at least equivalent to the condition that prevailed immediately before such Casualty with reasonable diligence and continuity. If, during the period of such repair and restoration, LESSEE is unable to reasonably use all or any part of the Premises in the ordinary course of LESSEE’s business without material interference or impairment, then LESSEE shall receive a reduction in the Rent and additional rent proportionate to the fraction of the Premises unusable by LESSEE in the ordinary course of its business without material interference or impairment from the date of the applicable Casualty until LESSEE is again reasonably able to use the entire Premises without material interference or impairment. If LESSOR is obligated to repair and restore the Premises as aforesaid, LESSEE shall make available to LESSOR all insurance proceeds received on account of the applicable Casualty (other than any insurance proceeds attributable to LESSEE’s property), and LESSOR shall apply such proceeds towards the cost of such repair and restoration to the extent necessary to comply with this Section 15.2.

ARTICLE XVI

Condemnation

16.1 Condemnation of the Premises. In the event that title to all or any material part of the Premises shall be taken for any public or quasi-public use under any statute or right of eminent domain, or by private purchase in lieu thereof, either party may terminate this Lease on the date of transfer of such title.

16.2 Notice of Service of Process. Each party shall give the other immediate notice of the service on them or either of them of any legal process in connection with any such condemnation proceedings. Each party shall execute and deliver to the other all reasonable instruments that may be reasonably required to effectuate the provisions hereof.

ARTICLE XVII

Events of Default and Remedies

17.1 LESSEE Default. The following shall constitute a LESSEE Default under this Lease: (a) if LESSEE shall fail to pay the Rent, and/or any additional rent, expense or charge under this Lease within ten (10) days after receipt by LESSEE of written notice that they are due; or (b) if LESSEE shall neglect or fail to perform or observe, in any material respect, any other covenants, terms, provisions or conditions to be performed or observed by LESSEE under this Lease within thirty (30) days after written notice of said default is given by LESSOR. If the default included in Section 17.1(b) cannot reasonably be cured within thirty (30) days, LESSEE shall not be in default of this Lease if LESSEE commences to cure the default within such thirty (30) day period and diligently and in good faith continues to cure the default.

- 14 -

17.2 LESSOR’s Remedies. Upon the occurrence and during the continuance of any LESSEE Default specified in Section 17.1, LESSOR may, at its option, terminate this Lease, in which case:

(a) Neither LESSEE nor any person claiming through or under LESSEE shall be entitled to acquire or remain in possession of the Premises, and LESSOR shall have no further liability hereunder to LESSEE or any person claiming through or under LESSEE, and if LESSEE or any such person is in possession, LESSEE or any such person shall forthwith quit and surrender the Premises to LESSOR without further demand or notice, and LESSOR may lawfully enter the Premises, using such remedies as may be available under the law, and remove all persons and chattels therefrom and LESSOR shall not be liable for damages or otherwise by reason of re-entry or termination of this Lease or its terms;

(b) LESSOR shall have the right of eviction and the right to invoke any remedy allowed at law or in equity as if re-entry, unlawful detainer proceedings and other remedies were not herein provided for; and

(c) Notwithstanding anything contained herein to the contrary, the exercise of any remedy provided pursuant to this Lease or under law shall not deprive LESSOR of other actions against the LESSEE for possession or rent, and all such remedies are non-exclusive and can be exercised concurrently or separately as LESSOR desires.

ARTICLE XVIII

Certificates/Waivers

18.1 Certificates. Either party shall, without charge, at any time and from time to time hereafter, within ten (10) business days after written request of the other, certify by written instrument duly executed and acknowledged to any mortgagee or purchaser, or proposed mortgagee or proposed purchaser, or any other person specified in such request: (a) as to whether this Lease has been supplemented or amended, and if so, the substance and manner of such supplement or amendment; (b) as to the validity, force and effect of this Lease, in accordance with its terms as then provided; (c) as to the existence of any default thereunder; (d) as to the existence of any offsets, counterclaims or defenses thereto on the part of such other party; (e) as to the commencement and expiration dates of the term of this Lease; and (f) as to any other matters as may reasonably be so requested. Any such certificate may be relied upon by the party requesting it and any other person to whom the same may be exhibited or delivered and the contents of such certificate shall be binding on the party executing the same.

18.2 LESSOR Waiver of Liens. LESSOR hereby expressly waives any landlord’s lien, whether contractual or statutory, to any of LESSEE’s Property. Additionally, from time to time, and in any event within thirty (30) days following a written request by LESSEE, LESSOR shall, unless LESSEE is then in default hereunder, execute and return to LESSEE a written waiver (on any form reasonably required) of LESSOR’s lien rights under applicable law with respect to any of LESSEE’s Property.

- 15 -

ARTICLE XIX

MISCELLANEOUS PROVISIONS

19.1 Assignment or Subleasing Prohibited. LESSEE is prohibited from subletting the Premises in whole or in part, or of transferring or in any way assigning or conveying this Lease in whole or in part to any person other than a subsidiary or an affiliate or parent corporation of LESSEE, without the prior written consent of LESSOR. If LESSEE sublets, transfers or in any way assigns or conveys this Lease, in whole or in part, to a subsidiary or an affiliate or parent corporation of LESSEE, LESSEE shall provide LESSOR with prior written notice of said action. LESSEE’s violation of this clause constitutes just cause for LESSOR to terminate and cancel the Lease.

19.2 Quiet Enjoyment. LESSEE, upon paying the Rent and all additional rent and other charges, and performing all the other terms of this Lease, shall quietly have and enjoy the Premises during the term of this Lease without hindrance or interference by anyone claiming by or through LESSOR.

19.3 Access. LESSOR reserves the right, in accordance herewith, to enter the Premises in order to inspect the same after 24 hour prior notice to LESSEE or as is otherwise reasonably necessary in the operation and/or protection of the Premises, its components or persons therein; provided however, that LESSOR shall take reasonable commercial efforts to minimize any disturbance to LESSEE or any interruption of LESSEE’s business.

19.4 Amendments. This Lease may not be amended, modified or terminated nor may any obligation hereunder be waived orally, and no such amendment, modification, termination or waiver will become effective for any purpose unless it is in writing and signed by the party against whom enforcement thereof is sought.

19.5 Waiver. Failure on the part of either party to complain of any action or non-action on the part of the other party, no matter how long the same may continue, shall never be deemed to be a waiver by such party of any of its rights hereunder. No waiver at any time of any of the provisions hereof by either party shall be construed as a waiver of any of the other provisions hereof, and either’s waiver at any time of any of the provisions hereof shall not be construed as a waiver at any subsequent time of the same provisions. The consent or approval by either party to or of any action by the other party requiring such consent or approval shall not be deemed to waive or render unnecessary said party’s consent or approval to or of any subsequent similar act.

19.6 Invalidity of Particular Provisions. If any term or provision of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.

- 16 -

19.7 Provisions Binding, Etc. Except as herein otherwise specifically provided, the terms hereof shall be binding upon and shall inure to the benefit of the successors and assigns, respectively, of LESSOR and LESSEE. Each term and each provision of this Lease to be performed by LESSEE shall be construed to be both a covenant and a condition. The reference contained to successors and assigns or LESSEE is not intended to constitute a consent to assignment by LESSEE, but has reference only to those instances in which LESSOR may later give written consent to a particular assignment as required by this Lease.

19.8 Governing Law. This Lease shall be governed exclusively by the provisions hereof and by the laws of the State of Delaware as the same may from time to time exist.

19.9 Notices. All notices, requests, consents and other communications hereunder shall be deemed given: (i) when delivered if delivered personally (including by courier); (ii) on the third day after mailing, if mailed, postage prepaid, by registered or certified mail (return receipt requested); (iii) on the day after mailing if sent by a nationally recognized overnight delivery service which maintains records of the time, place, and recipient of delivery; or (iv) upon receipt of a confirmed transmission, if sent by telex, telecopy or facsimile transmission, in each case to the parties at the following addresses or to other such addresses as may be furnished in writing by one party to the others:

If intended for LESSOR, addressed to it at:

ABRAXIS BIOSCIENCE, LLC

11755 Wilshire Boulevard

Suite 2000

Los Angeles, CA 90025

Fax: (310) 883-3138

Attention: General Counsel

with copies to:

ABRAXIS BIOSCIENCE, INC.

11755 Wilshire Boulevard

Suite 2000

Los Angeles, CA 90025

Fax: (310) 883-3138

Attention: General Counsel

If intended for LESSEE, addressed to it at:

APP PHARMACEUTICALS, LLC

1501 East Woodfield Road

Suite 300 East

Schaumburg, IL 60173-5837

Attention: General Counsel

- 17 -

with copies to:

APP PHARMACEUTICALS, INC.

1501 East Woodfield Road

Suite 300 East

Schaumburg, IL 60173-5837

Attention: General Counsel

19.10 Right to Cure Defaults. Either party may, but shall not be obligated to, cure at any time, after written notice and reasonable opportunity to cure, any default by the other party under this Lease; and whenever a party so elects, all costs and expenses incurred by such party in curing a default, including, without limitation, reasonable attorneys’ fees together with interest on the amount of costs and expenses so incurred at the rate of two percent (2%) over and above the prevailing prime rate per annum charged by JP Morgan Chase in New York, New York (the “Rate”) at the time, shall be paid by the defaulting party within ten (10) days from written demand and evidence of payment therefor, and as to LESSEE shall be recoverable as additional rent. Interest shall accrue at said rate from and after the due date of any payment of the Rent, additional rent or any payment by LESSEE or LESSOR described in this Lease.

19.11 Delivery of this Instrument. This instrument cannot be construed to be a proposal of either LESSOR to LESSEE, nor of LESSEE to LESSOR, and shall have no effect whatsoever between the parties herein named unless properly executed by both parties, it being understood that this instrument has been delivered for examination only, but without any purpose whatsoever of creating or confirming any contractual relationship between LESSOR and LESSEE; provided, however, that upon proper execution of this Lease by both parties, this Section 19.11 shall be null and void.

19.12 Headings. The headings throughout this Lease are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify or aid in the interpretation, construction or meaning of the provisions of this Lease.

19.13 Effect of Unavoidable Delays. The provisions of this section shall be applicable if there shall occur, during the Term, or prior to the commencement thereof any (i) strike(s), lockout(s) or labor dispute(s); or (ii) inability to obtain labor or materials, or reasonable substitutes therefor; or acts of God, governmental restrictions, regulations or controls, enemy or hostile governmental action, civil commotion, fire or other casualty or other conditions similar to those enumerated in this item (ii) beyond the reasonable control of the party obligated to perform. If LESSOR or LESSEE shall, as the result of any of the above described events, fail punctually to perform any obligation on its part to be performed, under this Lease, then such failure shall be excused and not be a breach of this Lease by the party in question, but only to the extent occasioned by such event. If any right or option of either party to take any action under or with respect to this Lease is conditioned upon the same being exercised within any prescribed period of time or at or before a named date, then such prescribed period of time and such named date shall be deemed to be extended or delayed, as the case may be for a period equal to the period of the delay occasioned by any above-described event. Notwithstanding anything herein contained, however, the provisions of this section shall not be applicable to LESSEE’S obligation to pay rent or its obligations to pay any other sum, monies, costs, charges or expenses required to be paid by LESSEE hereunder, and to LESSOR’S obligations under the provisions of Article IV.

- 18 -

19.14 No Representation. Neither LESSOR, LESSOR nor their respective agents have made any representation, warranty or promise with respect to the Premises, except as herein expressly set forth.

19.15 Relationship of Parties. LESSOR and LESSEE shall not be considered or deemed to be joint ventures or partners and neither shall have the power to bind or obligate the other except as set forth herein.

19.16 Counterparts. This Lease may be simultaneously executed in counterparts, each of which when so executed and delivered, shall constitute an original, fully enforceable counterpart for all purposes. Any such counterpart may be executed by facsimile signature with only verbal confirmation, and when so executed and delivered shall be deemed an original and such counterpart(s) together shall constitute only one original.

19.17 Severability. The provisions of this Lease shall be deemed separable. Therefore, if any part of this Lease is rendered void, invalid or unenforceable, such rendering shall not affect the validity or enforceability of the remainder of this Lease.

19.18 Authority. Each party warrants that it has full power, authority and legal right to execute and deliver this Lease and to keep and observe all of the terms and provisions of this Lease on such party’s part to be observed and performed. Each party warrants that this Lease is its valid and enforceable obligation.

19.19 Mitigation of Damages. The parties shall use reasonable commercial efforts to mitigate any of its damages hereunder.

19.20 No Broker. Each of LESSOR and LESSEE represents and warrants to the other party that its has not negotiated with any broker in connection with this Lease and that this Lease was negotiated directly by LESSOR and LESSEE. Each party hereby agrees to indemnify the other against all claims, damages, costs and expenses incurred by the indemnified party as a result of the breach of the foregoing representation or warranty by the indemnifying party.

19.21 Incorporation. The recitals set forth above under “RECITALS” are incorporated herein by reference.

19.22 Damages. Neither party shall be responsible for consequential, indirect, special or punitive damages.

19.23 Confidentiality - LESSOR. As used in this Section 19.23, “Information” means all information, whether printed, written, verbal, electronic on computer disk, CAD, photographic or otherwise, relating to LESSOR, including, without limiting the generality of the foregoing, financial information and all disclosure of information which relate to LESSOR’s manufacturing practices.

- 19 -

(a) In the event LESSEE receives any Information, LESSEE agrees to (i) immediately return to LESSOR any such Information, including, without limitation, any copies of the Information which may have been made, without retaining copies, summaries, extracts of information, analyses, reports or other documents that constitute Information and (ii) keep the knowledge of any Information in strict confidence and to not disclose, divulge or communicate, directly or indirectly, intentionally or inadvertently, Information to any person or entity. LESSEE shall not make any copies or reproduce the Information. Any Information obtained by LESSEE shall not confer any rights or interests in the Information to LESSEE or anyone else. All Information and any rights related thereto are and remain the exclusive and absolute property of LESSOR. This Lease does not constitute or create any duty or obligation on the part of LESSOR to provide any Information to LESSEE.

(b) If LESSEE or anyone else for whom LESSEE is liable breaches or attempts to breach the provisions of this Section 19.23, the injury to LESSOR may be irreparable and money damages may not be an adequate remedy. In such event, LESSOR shall be entitled, in addition to all remedies available at law or in equity, to obtain from any court of competent jurisdiction an injunction prohibiting LESSEE or such other person from any further breach or attempted breach of this Section 19.23.

19.24 Confidentiality - LESSEE. As used in this Section 19.24, “Information” means all information, whether printed, written, verbal, electronic on computer disk, CAD, photographic or otherwise, relating to LESSEE, including, without limiting the generality of the foregoing, financial information and all disclosure of information which relate to LESSEE’s manufacturing practices.

(a) In the event LESSOR receives any Information, LESSOR agrees to (i) immediately return to LESSEE any such Information, including, without limitation, any copies of the Information which may have been made, without retaining copies, summaries, extracts of information, analyses, reports or other documents that constitute Information and (ii) keep the knowledge of any Information in strict confidence and to not disclose, divulge or communicate, directly or indirectly, intentionally or inadvertently, Information to any person or entity. LESSOR shall not make any copies or reproduce the Information. Any Information obtained by LESSOR shall not confer any rights or interests in the Information to LESSOR or anyone else. All Information and any rights related thereto are and remain the exclusive and absolute property of LESSEE. This Lease does not constitute or create any duty or obligation on the part of LESSEE to provide any Information to LESSOR.

(b) If LESSOR or anyone else for whom LESSOR is liable breaches or attempts to breach the provisions of this Section 19.24, the injury to LESSEE may be irreparable and money damages may not be an adequate remedy. In such event, LESSEE shall be entitled, in addition to all remedies available at law or in equity, to obtain from any court of competent jurisdiction an injunction prohibiting LESSOR or such other person from any further breach or attempted breach of this Section 19.24.

- 20 -

19.25 Attorneys’ Fees. In any action or proceeding which either party brings against the other to enforce its rights hereunder, the non-prevailing party shall pay all costs incurred by the prevailing party, including reasonable attorneys’ fees, which amounts shall be a part of the judgment in said action or proceeding.

19.26 Entire Agreement. This Lease, including the Exhibits attached hereto, and the documents referred to herein, if any, constitute the entire agreement between LESSOR and LESSEE with respect to the leasing of the Premises, and shall not affect any prior or contemporaneous agreements, understandings, proposals and other representations between them.

- 21 -

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

ABRAXIS BIOSCIENCE, LLC		APP PHARMACEUTICALS, LLC
“LESSOR”		“LESSEE”
By:	/s/ Patrick Soon-Shiong	By:	/s/ Patrick Soon-Shiong
Name:	Patrick Soon-Shiong	Name:	Patrick Soon-Shiong
Title:	CEO	Title:	CEO

EX-10.8

Exhibit 10.8

EXECUTION COPY

LEASE AGREEMENT

between

ABRAXIS BIOSCIENCE, LLC

and

APP PHARMACEUTICALS, LLC

LEASE AGREEMENT

THIS LEASE AGREEMENT (this “Lease”), dated effective the 13^th day of November, 2007 (the “Effective Date”), is made by and between Abraxis BioScience, LLC, a Delaware limited liability company (“LESSOR”), and APP Pharmaceuticals, LLC, a Delaware limited liability company (“LESSEE”).

RECITALS

WHEREAS, LESSOR and LESSEE (and their respective parent companies) have entered into a Separation and Distribution Agreement dated as of the Effective Date (the “Separation Agreement”);

WHEREAS, simultaneously herewith, New Abraxis, Inc., to be renamed Abraxis BioScience, Inc., parent company of LESSOR, and LESSEE are entering into a Manufacturing Agreement (the “Manufacturing Agreement”);

WHEREAS, the LESSOR is the owner of that certain improved real property located at and commonly known as the Cornell research and development facility and indicated as “Phase 2” and “Phase 3” in Exhibit A (together with all buildings, structures, fixtures and improvements and betterments thereon and appurtenances thereto other than the Machinery and Equipment (as defined in the Separation Agreement) of LESSOR) thereon attached hereto and made a part hereof (the “Property”);

WHEREAS, notwithstanding that LESSOR owns the Property and this Lease, LESSEE is, and remains, the owner of the Contributed Machinery and Equipment (as defined in the Separation Agreement) of LESSEE; and

WHEREAS, LESSOR desires to lease to LESSEE, and LESSEE desires to lease from LESSOR, (i) the Property, (ii) all improvements at any time existing thereon and (iii) all fixtures, equipment, furniture and machinery, excluding, for all purposes, the Machinery and Equipment of LESSOR (collectively, the “Premises”).

NOW, THEREFORE, in consideration of the mutual promises and premises hereinafter contained, it is hereby mutually agreed as follows:

ARTICLE I

Definitions

1.1 All capitalized terms used in this Lease and not defined herein shall have the meaning ascribed to such terms in the Separation Agreement.

ARTICLE II

Property

2.1 Lease. LESSOR hereby leases to LESSEE the LESSEE’s share of the Premises, hereinafter referred to as the “LESSEE Premises,” and LESSEE leases, hires and takes from LESSOR the LESSEE Premises. LESSEE has inspected the Premises and accepts the same “As Is.” The LESSEE Premises consists of approximately 48,000 square feet of research and development space and shall include the right to use and obligation to share (as applicable) any common areas.

ARTICLE III

Term

3.1 Term. The term of this Lease shall commence on the Effective Date (the “Commencement Date”) and end on December 31, 2010 (the “Term”), unless earlier terminated in accordance with the provisions of this Lease.

3.2 Early Termination. Notwithstanding Section 3.1, this Lease may be terminated by LESSEE from and after January 1, 2009 upon its delivery of twelve (12) months written notice to LESSOR.

3.3 Holding Over. If LESSEE retains possession of the Premises or any part thereof after the termination of this Lease or expiration of the Term, LESSEE shall pay to LESSOR a monthly Rent equal to 2.00 times the monthly Rent in effect as of the last month of the Term. This charge shall not limit LESSOR’s right to seek such other remedy as may be available to it at law or equity.

ARTICLE IV

Rent

4.1 Rent. During the Term, LESSEE covenants and agrees to pay LESSOR, as annual rent for the Premises, the aggregate amount of $912,000, which shall be paid monthly (i.e., $76,000) on the 1^st day of each month during the Term at the LESSOR’s address for notice hereunder or otherwise as LESSOR may designate (the “Rent”).

ARTICLE V

Services and Utilities

5.1 Services and Utilities. During the Term, LESSOR shall be solely responsible for and shall pay expenses for all utilities used or consumed at the Premises, including but not limited to all water, gas, heat, light, power, telephone and other utilities and services supplied to the Premises together with any taxes thereon. If LESSEE desires to install any equipment which shall require additional utility facilities or utility facilities of a greater capacity than the facilities existing on the Effective Date, such installation shall be subject to LESSOR’s prior written approval (such approval not to be unreasonably withheld, conditioned, denied or delayed) of LESSEE’s plans and specifications therefor.

3

5.2 LESSOR Not Responsible For Interruption of Service. LESSOR shall in no way be liable or responsible for any loss, damage or expense that LESSEE may sustain or incur by reason of any change, failure, interference, disruption or defect in the supply or character of the utilities furnished to the Premises, or if the quantity or character of the utilities supplied to the Premises are no longer available or suitable for LESSEE’s requirements, and no such change, failure, defect, unavailability or unsuitability shall constitute an actual or constructive eviction in whole or in part, or entitle LESSEE to any abatement or diminution of rent or additional rent, or relieve LESSEE from any obligations under the Lease; provided, however, if any service failure arises from the gross negligence or willful misconduct of LESSOR, then (a) the Rent and any additional rent payable under this Lease shall abate in proportion to the fraction of the total rentable area of the Premises that is materially affected by such service failure and (b) LESSEE shall have the right to pursue any and all remedies available at law or in equity.

ARTICLE VI

Repairs and Maintenance

6.1 LESSEE’s Obligations.

(a) Except for Capital Repairs (as hereinafter defined), LESSEE shall be responsible for (i) all repairs (including replacements) necessary to maintain the Premises in substantially the same condition as exists on the Effective Date, normal wear and tear and damage by fire or other casualty and eminent domain excepted. LESSEE shall not be responsible for any maintenance, repairs or replacement in or affecting any portions of the Premises occupied by any tenant or occupant other than LESSEE. In the event that LESSEE has not performed such repairs and LESSOR elects to perform the repair, after written notice and a reasonable opportunity to cure, LESSEE shall reimburse LESSOR the repair costs within thirty (30) days following LESSEE’s receipt of LESSOR’s written demand and evidence of payment therefor.

(b) LESSEE shall also be responsible for making any repairs to the Property caused by any act, omission or negligence of LESSEE or its employees, agents, invitees, licensees, subtenants, or contractors and shall indemnify and save harmless LESSOR from any and all expenses, liens, claims, or damages to either persons or property arising out of, or resulting from the failure to make such repairs; provided, however, LESSEE shall not be obligated to make any repairs to the Property if the need for such repairs is caused by LESSOR or its agents, contractors, employees, guests or invitees. LESSOR shall have the right to make any repairs that are the responsibility of LESSEE under this Section 6.1(b) at LESSEE’s sole cost and expense after written notice and reasonable opportunity to make the repair, and LESSEE shall reimburse LESSOR the repair costs within thirty (30) days following LESSEE’s receipt of LESSOR’s written demand and evidence of payment therefor.

(c) All repairs conducted by LESSEE shall be accomplished promptly with first class materials, in a good and workmanlike manner, in compliance with all applicable laws of all governmental authorities and in a style, character and quality conforming to the existing construction of the Premises.

4

6.2 LESSOR’s Obligations. For the purposes of this Lease, “Capital Repairs” shall mean (i) any maintenance, repairs or replacements to the roof, foundation and structural elements of the Premises, (ii) any maintenance, repairs or replacements to the Premises’ systems (which shall include the heating, ventilating, air-conditioning, plumbing, electrical, mechanical and other systems and equipment serving the Premises generally), the common areas or the exterior of the Premises and (iii) maintenance, repairs or replacements to the Premises required to comply with any laws applicable to the Premises (to the extent not relating to LESSEE’s use or occupancy of the Premises) enacted or promulgated after the date of this Lease, in each case, the cost of which is properly characterized as property, plant and equipment according to generally accepted accounting practices. LESSOR, at its expense (subject to reimbursement by LESSEE to the extent provided in Section 6.1 (b)), shall be responsible for all Capital Repairs necessary to keep the Premises in as good condition as exists as of the Effective Date or to comply with any laws applicable to the Premises (to the extent not relating to LESSEE’s use or occupancy of the Premises) enacted or promulgated after the Effective Date. LESSOR shall complete such repairs in a good and workmanlike manner consistent with normal and customary industry standards for buildings similar to the Premises and in compliance with all applicable laws.

ARTICLE VII

Alterations, and Additions

7.1 Alterations and Additions. LESSEE shall have the right, from time to time, without LESSOR’s consent, to make interior alterations, improvements and/or additions in and to the Premises that will have no effect on the roof, foundation or other structural elements of the Premises (the “Building Structure”) and will have no adverse effect on the heating, ventilating, air-conditioning, plumbing, electrical, mechanical and other systems and equipment serving the Premises generally (the “Building Systems”). LESSEE may make alterations, improvements and/or additions that affect the exterior of the Premises or may have a material adverse effect on the Building System only after first obtaining the prior written consent of LESSOR, which consent shall not be unreasonably withheld, conditioned, delayed or denied. All such approved additions, alterations or improvements shall be in accordance to plans and specifications prepared by a duly qualified architect or engineer who shall submit such plans and specifications to LESSOR for written approval, not to be unreasonably withheld, conditioned, delayed or denied. All alterations, improvements, and additions to the Premises shall be made in accordance with all applicable laws and shall at once when made or installed be deemed to have attached to the freehold and to have become the property of LESSOR and shall remain for the benefit of LESSOR at the end of the Term or other earlier termination of this Lease. Any equipment installed by LESSEE during the Term shall at LESSEE’s election be removed at the expiration or termination of this Lease or shall remain at the Premises. In the event of making such alterations, improvements, and/or additions as herein provided, LESSEE shall indemnify and save harmless LESSOR from any and all expenses, liens, claims, or damages to either persons or Premises arising out of, or resulting from the undertaking or making of said alterations, additions, and improvements. Notwithstanding anything to the contrary set forth herein, LESSEE shall have the right, without LESSOR’s consent or approval, to make non-structural alterations of less than $50,000 in any instance.

5

ARTICLE VIII

Taxes

8.1 Payment of Taxes. LESSOR shall pay all real property taxes applicable to the Premises. LESSOR’s obligations under this Section 8.1 shall survive the expiration or termination of this Lease.

8.2 Definition of Real Property Tax. As used herein, the term “real property tax” shall include any form of fee or tax imposed by any authority having the direct or indirect power to tax or assess, including any city, county, state or federal government, any school, agricultural, lighting, drainage or other improvement district thereof, or any private owners association created by covenants, conditions and restrictions binding on the Premises, as against any legal or equitable interest of LESSOR in the Premises, or as against LESSOR’s business of leasing the Premises. The term “real property tax” shall also include any tax, fee, levy, assessment or charge, or any increase therein, imposed by reason of events occurring during the Term, including, but not limited to, a change in the ownership of the Premises. Notwithstanding the foregoing, “real property tax” shall not include: (i) all excess profits taxes, franchise taxes, succession taxes, estate taxes, capital stock taxes, inheritance taxes, gift taxes, mortgage taxes, federal and state income taxes or any other taxes imposed upon or measured by LESSOR’s gross income or profits unless the same is specifically imposed in lieu of real estate taxes or ad valorem taxes; (ii) penalties for late payments; (iii) special assessments; and (iv) transfer taxes imposed upon any transfer of the Premises or any interest therein.

8.3 Personal Property Taxes.

(a) LESSEE shall pay prior to delinquency all taxes assessed against and levied upon LESSEE’s trade fixtures, furnishings, Contributed Machinery and Equipment and all other personal property of LESSEE contained in the Premises or otherwise owned or operated by LESSEE at the Premises. When possible, LESSEE shall cause said trade fixtures, furnishings, Contributed Machinery and Equipment and all other personal property to be assessed and billed separately from the real property of LESSOR.

(b) If any of LESSEE’s personal property shall be assessed and billed with LESSOR’s real property, LESSEE shall pay LESSOR the taxes attributable to LESSEE within thirty (30) days after receipt of a written statement setting forth the taxes applicable to LESSEE’s property.

6

ARTICLE IX

Indemnification; Insurance

9.1 Indemnity. LESSEE shall indemnify, defend and hold harmless LESSOR (solely with respect to LESSOR’s position as the owner of the Premises and the landlord under this Lease) from and against any and all claims arising from LESSEE’s use of the Premises, or from the conduct of LESSEE’s business or from any activity, work or things done, permitted or suffered by LESSEE in or about the Premises or elsewhere, and shall further indemnify, defend and hold harmless LESSOR (solely with respect to LESSOR’s position as the owner of the Premises and the landlord under this Lease) from and against any and all claims arising from any breach or default in the performance of any obligation on LESSEE’s part to be performed under the terms of this Lease or arising from any negligence of LESSEE, or any of LESSEE’s agents, contractors or employees, and from and against all costs, attorneys’ fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon; provided, however, LESSEE shall not indemnify, defend or hold harmless LESSOR from and against any claim, liability, expense, lawsuit, cost, loss or other damage, including reasonable attorneys’ fees, which arise from or are caused by or in anyway connected to the negligence or willful misconduct of LESSOR, its employees, agents, contractors, guests or invitees. Subject to Section 9.2 below, LESSOR shall indemnify, defend and hold harmless LESSEE (solely with respect to LESSEE’s position as the tenant under this Lease) from and against any and all claims arising from LESSOR’s use of or entry onto the Premises, and shall further indemnify, defend and hold harmless LESSEE (solely with respect to LESSEE’s position as the tenant under this Lease) from and against any and all claims arising from any breach or default in the performance of any obligation on LESSOR’s part to be performed under the terms of this Lease or arising from any gross negligence or willful misconduct of LESSOR, or any of LESSOR’s agents, contractors or employees and from and against all costs, attorneys’ fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon; provided, however, LESSOR shall not indemnify, defend or hold harmless LESSEE from and against any claim, liability, expense, lawsuit, cost, loss or other damage, including reasonable attorneys’ fees, which arise from or are caused by or in anyway connected to the negligence or willful misconduct of LESSEE, its employees, tenants, agents, guests or invitees.

9.2 Exemption of LESSOR From Liability.

(a) Except to the extent caused by the gross negligence or willful misconduct of LESSOR , its employees, agents, guests or invitees, LESSEE hereby agrees that LESSOR and its agents shall not be liable for injury to LESSEE’s business or any loss of income therefrom or for damage to the goods, wares, merchandise or other property of LESSEE, LESSEE’s employees, invitees, customers or any other person in or about the Premises, nor shall LESSOR be liable for injury to the person of LESSEE, LESSEE’s employees, agents or contractors, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction, or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning, light fixtures or from any other cause whether said damage or injury results from conditions arising upon the Premises or upon other portions of the building of which the Premises are a part, or from other sources or places, and regardless of whether the cause of such damage or injury or the means of repairing the same is inaccessible to LESSEE. LESSOR shall not be liable for any damages arising from any act or neglect of any other lessee, if any, of the building in which the Premises are located.

7

(b) No directors, officers, employees or agents of LESSOR or individual, member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be LESSOR or any successor in interest, shall be subject to personal liability with respect to any of the covenants or conditions of this Lease. LESSEE will not seek recourse against the directors, officers, employees or agents of LESSOR or an individual, member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be LESSOR or any successor-in-interest or any of their personal assets for such satisfaction. It is mutually agreed that this clause is and shall be considered an integral part of this Lease.

(c) No directors, officers, employees or agents of LESSEE or individual, member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be LESSEE or any successor in interest, shall be subject to personal liability with respect to any of the covenants or conditions of this Lease. LESSOR will not seek recourse against the directors, officers, employees or agents of LESSEE or an individual, member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be LESSEE or any successor-in-interest or any of their personal assets for such satisfaction. It is mutually agreed that this clause is and shall be considered an integral part of this Lease.

(d) Remedies and limitations thereon set forth in this Lease shall only apply in this Lease.

9.3 Insurance.

(a) LESSOR shall obtain and maintain “all risk” property and casualty insurance on the Property, including the Premises. LESSEE shall pay the cost of the premiums for said insurance pertaining to the Premises or, if LESSOR consents, obtain Property & General Liability coverage of its own on the Premises, with LESSOR as loss payee on the Property and as additional named insured on the general liability policy. LESSEE shall carry and maintain at all times throughout the Term, at its expense, insurance with terms, coverage and companies satisfactory to LESSOR:

(i) commercial (comprehensive) liability insurance, with coverage against assumed or contractual liability under this Lease, with respect to liability arising out of ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto, to afford protection with respect to personal injury, loss of life and property damage, of not less than $2,000,000 per occurrence combined single limit subject to a $2,000,000 general aggregate;

(ii) “all risk” property insurance, including boiler and machinery comprehensive form, if applicable, covering damage to or loss of any of LESSEE’s personal property, fixtures, equipment and alterations, including electronic data processing equipment (and coverage for the full replacement cost thereof, including business interruption of LESSEE), together with, if the property of LESSEE’s invitees is to be kept in the Premises, warehouser’s legal liability or bailee customers insurance for the full replacement cost of the property belonging to invitees and located in the Premises; and

8

(iii) worker’s compensation insurance and employer’s liability insurance in amounts required by applicable law or statute covering all persons employed in connection with LESSEE.

(b) LESSEE’s Contractor Insurance. LESSEE shall require any contractor of LESSEE performing work on the Premises to carry and maintain, at no expense to LESSOR:

(i) worker’s compensation insurance in form and amounts required by law; and

(ii) public liability insurance insuring LESSEE and LESSOR as additional insured, against liability which may arise on account of any alteration, addition, improvement or construction, written on a claims occurrence basis with minimum limits of $1,000,000/occurrence (it being understood that this is public liability insurance and not product liability insurance).

(c) Insurance Companies. Insurance required to be maintained by LESSEE shall be written by companies licensed to do business in the state in which the Premises are located and having, at the time the initial policies are issued, a General Policyholders Rating of at least “A-/VII” (or such higher rating as may be required by a lender having a lien on the Premises) as set forth in the most current issue of “Best’s Insurance Guide.”

(d) Policy Requirements. Comprehensive commercial liability and “all risk” property insurance policies evidencing such insurance shall, with respect to comprehensive commercial liability policies, name LESSOR and/or its designee(s) as additional insured and, with respect to “all risk” property insurance policies, name LESSOR and/or its designee(s) as loss payee, shall be primary and noncontributory and shall contain a provision, by means of endorsement or otherwise, whereby the insurer agrees that such policy shall not be cancelled, materially changed or not renewed without at least thirty (30) days advance written notice to LESSOR (except in case of cancellation for non-payment of premium, in which case ten (10) days advance written notice shall be sufficient) at the address set forth herein, or to such other party or address as may be designated by LESSOR or its designee from time to time. Such commitment to provide prior notice of cancellation, modification or non-renewal shall be without qualifications. All liability insurance policies shall be written on a claims occurrence basis and have a separation of insureds endorsement.

(e) Certificates of Insurance. Prior to the Commencement Date and thereafter on the anniversary of the issuance of each policy LESSEE shall furnish to LESSOR certificates of insurance evidencing the coverage under each of the policies required by LESSOR herein. Said certificate shall include an acknowledgment of the commitment to provide LESSOR thirty (30) days’ prior written notice of cancellation, modification or non-renewal (except ten (10) days for non-payment).

9

(f) LESSEE’s Failure to Comply with Insurance Requirements. In the event that LESSEE fails to comply with LESSEE’S insurance requirements as stated herein, then, in addition to (and not in lieu of) all other remedies that LESSOR may have hereunder for a breach by LESSEE, LESSOR may, but shall not be obligated to, obtain such insurance at LESSOR’s sole option and keep the same in effect, and LESSEE shall pay LESSOR the premium cost thereof upon demand. It is agreed, however, that LESSOR is not responsible for any inadequacy of insurance protection purchase by LESSEE or by LESSOR on behalf of LESSEE.

(g) Mutual Waiver of Subrogation. Neither LESSOR nor LESSEE shall be liable to the other or to any insurance company (by way of subrogation or otherwise) providing coverage for any loss or damage to any building, structure or other tangible property, or any resulting loss of income, even though such loss or damage might have been occasioned by the negligence of the other contracting party, its agents or employees, provided and to the extent such loss or damage is covered by insurance, it being acknowledged and agreed that the amount of any insurance deductibles is expressly excluded from the waiver provisions herein set forth. Notwithstanding the foregoing, the cost of any damage not covered by insurance shall be borne by the responsible party.

(h) Notice of Fire. LESSEE shall give immediate notice to LESSOR in case of fire or accidents in the Premises or of defects therein or in any fixtures or equipment and both parties shall procure a waiver of right of subrogation against one another on the part of all insurance carriers in connection with all insurance policies covering losses arising out of destruction or damage to the Premises or its contents.

ARTICLE X

Compliance with Requirements

10.1 Compliance. LESSEE will use commercially reasonable efforts not to do any act or thing which constitutes a public or private nuisance. LESSOR will join in the application for any permit or authorization with respect to any Legal Requirements if such joinder is necessary. The term “Legal Requirements” shall mean all statutes, codes, ordinances, rules, regulations, orders, judgments or decrees of governments, authorities, agencies, officials and officers which now or at any time hereafter may be applicable to the Property.

ARTICLE XI

[Intentionally Omitted]

ARTICLE XII

Covenant Against Liens

12.1 Liens of LESSEE. If because of any act or omission of LESSEE, any mechanic’s lien or other lien, charge, or order for the payment of money shall be filed against any portion of the Premises, LESSEE shall, at its own cost and expense, cause the same to be discharged of record or bonded within ninety (90) days after written notice from LESSOR to LESSEE of the filing thereof.

10

12.2 Removal of Liens. If LESSEE shall fail to cause such liens to be discharged of record or bonded within the aforesaid ninety (90) day period or satisfy such liens within thirty (30) days after any judgment in favor of such lien holders from which no further appeal might be taken, then LESSOR shall have the right to cause the same to be discharged. All amounts paid by LESSOR to cause such liens to be discharged shall constitute additional rent payable by LESSEE to LESSOR.

ARTICLE XIII

Environmental Matters

13.1 Conduct of Operations. During the Term, LESSEE shall conduct its operations at the Premises in material compliance with applicable Environmental Laws.

13.2 Hazardous Materials. LESSEE shall not cause nor permit, nor allow any of LESSEE’s employees, agents, customers, visitors, invitees, licensees, contractors, assignees or sublessee’s (individually, a “LESSEE PARTY” and collectively, “LESSEE PARTIES”) to cause or permit, any Hazardous Materials to be brought upon, stored, manufactured, generated, blended, handled, recycled, treated, disposed or used on, under or about the Premises, except in material compliance with all applicable Environmental Laws. As used herein, “Hazardous Materials” means any chemical, substance, material, controlled substance, waste or combination thereof, whether solid, semi-solid, liquid or gaseous, which is hazardous to human health or safety or to the environment due to its radioactivity, ignitability, corrosivity, reactivity, explosivity, toxicity, carcinogenicity, mutagenicity, phytotoxicity, infectiousness or other harmful properties or effects, including, without limitation, petroleum and petroleum byproducts, asbestos, radon, polychlorinated biphenyls (PCBs), refrigerants regulated by the Environmental Protection Agency’s “Refrigerant Recycling Rule,” as amended from time to time, and all of those chemicals, substances, materials, controlled substances, wastes or combinations thereof which are now or become in the future listed, defined or regulated in any manner by any Environmental Law based upon, directly or indirectly, such properties or effects. As used herein, “Environmental Laws” means any and all federal, state or local laws, regulations, standards, decisions of courts, ordinances, rules, codes, orders, decrees, directives, guidelines, permits or permit conditions concerning the protection of public health and safety, worker health and safety or the environment, currently existing and as amended, enacted, issued or adopted in the future which are or become applicable to and enforceable upon LESSEE, or the Premises. LESSEE and LESSEE PARTIES shall comply in all material respects with all Environmental Laws and promptly notify LESSOR in writing of the material violation of any Environmental Law or any reportable spill and/or release of any Hazardous Materials, in, on, under or about the Premises or the improvements thereon or the soil or groundwater thereunder. LESSOR shall have the right to enter upon and inspect the Premises and to conduct tests, monitoring and investigations, in each case after 24 hour prior notice to LESSEE or as is otherwise reasonably necessary in the operation and/or protection of the Premises, its components or persons therein; provided however, that LESSOR shall take reasonable commercial efforts to minimize any disturbance to LESSEE or any interruption of LESSEE’s business. If such tests indicate the presence of any environmental condition caused or exacerbated during the Term by LESSEE or any LESSEE PARTY or arising during LESSEE’s occupancy, LESSEE shall reimburse LESSOR for the cost of conducting such tests (except to the extent such environmental condition arises from or is caused or exacerbated by the

11

gross negligence or willful misconduct of LESSOR, its employees, agents, contractors, guests or invitees). The phrase “environmental condition” shall mean any adverse condition relating to the release of any Hazardous Materials to the environment, including surface water, groundwater, drinking water supply, land, surface or subsurface strata or the ambient air. In the event of any such environmental condition, LESSEE shall promptly take any and all steps necessary to rectify the same to the satisfaction of the applicable agencies.

13.3 LESSEE’s Indemnification. LESSEE shall indemnify, defend and hold harmless LESSOR from and against any and all claims, judgments, causes of action, damages, penalties, fines, costs, liabilities, losses and expenses arising at any time during or after the Term from (a) LESSEE’s and/or any LESSEE PARTY’s breach of this Section 13 or (b) the presence, spill and/or release of Hazardous Materials brought onto the Premises by or for LESSEE and/or any LESSEE PARTY during the Term, in each case except to the extent arising from, caused by or in any way connected to the gross negligence or willful misconduct of LESSOR, its employees, agents, contractors, guests or invitees. This indemnity shall include, without limitation, the cost of any required or necessary repair, cleanup or detoxification, and the preparation and implementation of any closure, monitoring or other required plans, whether such action is required or necessary prior to or following the termination of this Lease. Neither the written consent by LESSOR to the presence of Hazardous Materials on, under or about the Premises, nor the strict compliance by LESSEE with all Environmental Laws, shall excuse LESSEE from LESSEE’s obligation of indemnification pursuant hereto. LESSEE’s obligations pursuant to the foregoing indemnity shall survive the expiration or termination of this Lease.

13.4 LESSOR’s Indemnification. LESSOR shall indemnify, defend and hold harmless LESSEE from and against any and all claims, judgments, causes of action, damages, penalties, fines, costs, liabilities, losses and expenses arising at any time during or after the Term from (a) any environmental condition or Hazardous Materials that come to exist on, under or about the Premises during the Term as a result of or in connection with the activities of LESSOR, its employees, agents, contractors, guests or invitees or (b) any environmental condition or Hazardous Materials which come to exist on, under or about the Premises after the Term, in each case except to the extent arising from, caused by or in any way connected to the negligence or willful misconduct of LESSEE, its employees, agents, contractors, guests or invitees. This indemnity shall include, without limitation, the cost of any required or necessary repair, cleanup or detoxification, and the preparation and implementation of any closure, monitoring or other required plans, whether such action is required or necessary prior to or following the termination of this Lease. Neither the written consent by LESSEE to the presence of Hazardous Materials on, under or about the Premises, nor the strict compliance by LESSOR with all Environmental Laws, shall excuse LESSOR from LESSOR’s obligation of indemnification pursuant hereto. LESSOR’s obligations pursuant to the foregoing indemnity shall survive the expiration or termination of this Lease.

13.5 Surrender of the Premises. Notwithstanding any other provision in this Lease, upon expiration or earlier termination of this Lease, LESSEE shall conduct an environmental site assessment (“ESA”) of the Premises with the objective of evaluating the potential for releases of Hazardous Materials on the Premises as a result of LESSEE’s operations on the Premises during the Term. The ESA shall be conducted, at the expense of LESSEE, by a third -party environmental consultant chosen by LESSEE and approved by LESSOR, which approval shall not be unreasonably withheld. If the ESA reveals evidence of a release of Hazardous Materials from

12

LESSEE’s operations at the Premises during the Term, then LESSEE shall conduct remedial action to address such release as required by applicable Environmental Laws. LESSEE’s obligation to complete any such remedial action initiated under this Section 13.5 shall survive the termination or expiration of this Lease.

ARTICLE XIV

Surrender

14.1 Surrender. LESSEE shall deliver and surrender to LESSOR possession of the Premises upon expiration of this Lease or its earlier termination in substantially the same condition as exists on the Effective Date (except for normal wear and tear and, subject to the provisions of Article XV, damage by fire or other casualty, the elements and any cause beyond LESSEE’s reasonable control).

14.2 Surrender of LESSEE’s Machinery and Equipment & Trade Fixtures. Upon the expiration or earlier termination of this Lease, LESSEE shall convey, transfer and deliver to LESSOR on an AS IS, WHERE IS BASIS title to all equipment, fixtures and machinery installed or placed in the Premises for a total purchase price of ONE DOLLAR ($1.00), except for (x) all Contributed Machinery and Equipment located at the Premises and (y) all of LESSEE’s assets at the Premises that LESSEE elects to remove (including, without limitation, any inventory, records, raw materials, WIP, furnished goods, supplies, vehicles, office furniture, computers and other hardware and software) (collectively the “Retained Equipment”), whose title shall be retained by LESSEE on the expiration or earlier termination of this Lease. Within thirty (30) days from the expiration or earlier termination of this Lease, LESSEE shall remove the Retained Equipment from the Premises at no cost to LESSOR. Any damage to the Premises caused by the removal of the Retained Equipment shall be restored by LESSEE to the condition that existed prior to such removal. LESSEE’s obligation to observe or perform this covenant shall survive the expiration or termination of this Lease.

ARTICLE XV

Destruction Of Premises

15.1 Termination for Major Casualties. In the event that the Premises are damaged or destroyed by fire, windstorm or any other casualty (a “Casualty”) to such an extent that, in the commercially reasonable judgment of either party, (a) at least 75% of the rentable area of the Premises cannot be occupied and used by either party in the ordinary course of business or (b) any damage or destruction to the Premises cannot be repaired within one hundred eighty (180) days from the date of the Casualty (each such event, a “Material Casualty”), or if insurance proceeds (excluding the amount of the deductible under the applicable insurance) shall be insufficient to restore such Casualty (unless such insufficiency is the result of either party’s failure to maintain the insurance required under this Lease), then either party shall have the right to terminate this Lease as of the date of such Casualty (notwithstanding any contrary provisions in the Lease) by furnishing written notice to the other party to that effect not more than thirty (30) days after the Casualty. If either party so terminates this Lease under this Section 15.1, the Rent and additional rent with respect thereto shall be prorated and paid or refunded, as appropriate, from the date of the Material Casualty.

13

15.2 Restoration of Damage. In the event of a Casualty that is not a Material Casualty, or if neither party elects to exercise its right to terminate this Lease as provided in Section 15.1 above in connection with a Material Casualty, then LESSOR, at its expense (subject to reimbursement from any proceeds of insurance arising from the applicable Casualty), shall repair and restore the Premises to a condition at least equivalent to the condition that prevailed immediately before such Casualty with reasonable diligence and continuity. If, during the period of such repair and restoration, LESSEE is unable to reasonably use all or any part of the Premises in the ordinary course of LESSEE’s business without material interference or impairment, then LESSEE shall receive a reduction in the Rent and additional rent proportionate to the fraction of the Premises unusable by LESSEE in the ordinary course of its business without material interference or impairment from the date of the applicable Casualty until LESSEE is again reasonably able to use the entire Premises without material interference or impairment. If LESSOR is obligated to repair and restore the Premises as aforesaid, LESSEE shall make available to LESSOR all insurance proceeds received on account of the applicable Casualty (other than any insurance proceeds attributable to LESSEE’s property), and LESSOR shall apply such proceeds towards the cost of such repair and restoration to the extent necessary to comply with this Section 15.2.

ARTICLE XVI

Condemnation

16.1 Condemnation of the Premises. In the event that title to all or any material part of the Premises shall be taken for any public or quasi-public use under any statute or right of eminent domain, or by private purchase in lieu thereof, either party may terminate this Lease on the date of transfer of such title.

16.2 Notice of Service of Process. Each party shall give the other immediate notice of the service on them or either of them of any legal process in connection with any such condemnation proceedings. Each party shall execute and deliver to the other all reasonable instruments that may be reasonably required to effectuate the provisions hereof.

ARTICLE XVII

Events of Default and Remedies

17.1 LESSEE Default. The following shall constitute a LESSEE Default under this Lease: (a) if LESSEE shall fail to pay the Rent, and/or any additional rent, expense or charge under this Lease within ten (10) days after receipt by LESSEE of written notice that they are due; or (b) if LESSEE shall neglect or fail to perform or observe, in any material respect, any other covenants, terms, provisions or conditions to be performed or observed by LESSEE under this Lease within thirty (30) days after written notice of said default is given by LESSOR. If the default included in Section 17.1(b) cannot reasonably be cured within thirty (30) days, LESSEE shall not be in default of this Lease if LESSEE commences to cure the default within such thirty (30) day period and diligently and in good faith continues to cure the default.

14

17.2 LESSOR’s Remedies. Upon the occurrence and during the continuance of any LESSEE Default specified in Section 17.1, LESSOR may, at its option, terminate this Lease, in which case:

(a) Neither LESSEE nor any person claiming through or under LESSEE shall be entitled to acquire or remain in possession of the Premises, and LESSOR shall have no further liability hereunder to LESSEE or any person claiming through or under LESSEE, and if LESSEE or any such person is in possession, LESSEE or any such person shall forthwith quit and surrender the Premises to LESSOR without further demand or notice, and LESSOR may lawfully enter the Premises, using such remedies as may be available under the law, and remove all persons and chattels therefrom and LESSOR shall not be liable for damages or otherwise by reason of re-entry or termination of this Lease or its terms;

(b) LESSOR shall have the right of eviction and the right to invoke any remedy allowed at law or in equity as if re-entry, unlawful detainer proceedings and other remedies were not herein provided for; and

(c) Notwithstanding anything contained herein to the contrary, the exercise of any remedy provided pursuant to this Lease or under law shall not deprive LESSOR of other actions against the LESSEE for possession or rent, and all such remedies are non-exclusive and can be exercised concurrently or separately as LESSOR desires.

ARTICLE XVIII

Certificates/Waivers

18.1 Certificates. Either party shall, without charge, at any time and from time to time hereafter, within ten (10) business days after written request of the other, certify by written instrument duly executed and acknowledged to any mortgagee or purchaser, or proposed mortgagee or proposed purchaser, or any other person specified in such request: (a) as to whether this Lease has been supplemented or amended, and if so, the substance and manner of such supplement or amendment; (b) as to the validity, force and effect of this Lease, in accordance with its terms as then provided; (c) as to the existence of any default thereunder; (d) as to the existence of any offsets, counterclaims or defenses thereto on the part of such other party; (e) as to the commencement and expiration dates of the term of this Lease; and (f) as to any other matters as may reasonably be so requested. Any such certificate may be relied upon by the party requesting it and any other person to whom the same may be exhibited or delivered and the contents of such certificate shall be binding on the party executing the same.

18.2 LESSOR Waiver of Liens. LESSOR hereby expressly waives any landlord’s lien, whether contractual or statutory, to any of LESSEE’s Property. Additionally, from time to time, and in any event within thirty (30) days following a written request by LESSEE, LESSOR shall, unless LESSEE is then in default hereunder, execute and return to LESSEE a written waiver (on any form reasonably required) of LESSOR’s lien rights under applicable law with respect to any of LESSEE’s Property.

15

ARTICLE XIX

MISCELLANEOUS PROVISIONS

19.1 Assignment or Subleasing Prohibited. LESSEE is prohibited from subletting the Premises in whole or in part, or of transferring or in any way assigning or conveying this Lease in whole or in part to any person other than a subsidiary or an affiliate or parent corporation of LESSEE, without the prior written consent of LESSOR. If LESSEE sublets, transfers or in any way assigns or conveys this Lease, in whole or in part, to a subsidiary or an affiliate or parent corporation of LESSEE, LESSEE shall provide LESSOR with prior written notice of said action. LESSEE’s violation of this clause constitutes just cause for LESSOR to terminate and cancel the Lease.

19.2 Quiet Enjoyment. LESSEE, upon paying the Rent and all additional rent and other charges, and performing all the other terms of this Lease, shall quietly have and enjoy the Premises during the term of this Lease without hindrance or interference by anyone claiming by or through LESSOR.

19.3 Access. LESSOR reserves the right, in accordance herewith, to enter the Premises in order to inspect the same after 24 hour prior notice to LESSEE or as is otherwise reasonably necessary in the operation and/or protection of the Premises, its components or persons therein; provided however, that LESSOR shall take reasonable commercial efforts to minimize any disturbance to LESSEE or any interruption of LESSEE’s business.

19.4 Amendments. This Lease may not be amended, modified or terminated nor may any obligation hereunder be waived orally, and no such amendment, modification, termination or waiver will become effective for any purpose unless it is in writing and signed by the party against whom enforcement thereof is sought.

19.5 Waiver. Failure on the part of either party to complain of any action or non-action on the part of the other party, no matter how long the same may continue, shall never be deemed to be a waiver by such party of any of its rights hereunder. No waiver at any time of any of the provisions hereof by either party shall be construed as a waiver of any of the other provisions hereof, and either’s waiver at any time of any of the provisions hereof shall not be construed as a waiver at any subsequent time of the same provisions. The consent or approval by either party to or of any action by the other party requiring such consent or approval shall not be deemed to waive or render unnecessary said party’s consent or approval to or of any subsequent similar act.

16

19.6 Invalidity of Particular Provisions. If any term or provision of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.

19.7 Provisions Binding, Etc. Except as herein otherwise specifically provided, the terms hereof shall be binding upon and shall inure to the benefit of the successors and assigns, respectively, of LESSOR and LESSEE. Each term and each provision of this Lease to be performed by LESSEE shall be construed to be both a covenant and a condition. The reference contained to successors and assigns or LESSEE is not intended to constitute a consent to assignment by LESSEE, but has reference only to those instances in which LESSOR may later give written consent to a particular assignment as required by this Lease.

19.8 Governing Law. This Lease shall be governed exclusively by the provisions hereof and by the laws of the State of Delaware as the same may from time to time exist.

19.9 Notices. All notices, requests, consents and other communications hereunder shall be deemed given: (i) when delivered if delivered personally (including by courier); (ii) on the third day after mailing, if mailed, postage prepaid, by registered or certified mail (return receipt requested); (iii) on the day after mailing if sent by a nationally recognized overnight delivery service which maintains records of the time, place, and recipient of delivery; or (iv) upon receipt of a confirmed transmission, if sent by telex, telecopy or facsimile transmission, in each case to the parties at the following addresses or to other such addresses as may be furnished in writing by one party to the others:

If intended for LESSOR, addressed to it at:

ABRAXIS BIOSCIENCE, LLC

11755 Wilshire Boulevard

Suite 2000

Los Angeles, CA 90025

Fax: (310) 883-3138

Attention: General Counsel

with copies to:

ABRAXIS BIOSCIENCE, INC.

11755 Wilshire Boulevard

Suite 2000

Los Angeles, CA 90025

Fax: (310) 883-3138

Attention: General Counsel

17

If intended for LESSEE, addressed to it at:

APP PHARMACEUTICALS, LLC

1501 East Woodfield Road

Suite 300 East

Schaumburg, IL 60173-5837

Attention: General Counsel

with copies to:

APP PHARMACEUTICALS, INC.

1501 East Woodfield Road

Suite 300 East

Schaumburg, IL 60173-5837

Attention: General Counsel

19.10 Right to Cure Defaults. Either party may, but shall not be obligated to, cure at any time, after written notice and reasonable opportunity to cure, any default by the other party under this Lease; and whenever a party so elects, all costs and expenses incurred by such party in curing a default, including, without limitation, reasonable attorneys’ fees together with interest on the amount of costs and expenses so incurred at the rate of two percent (2%) over and above the prevailing prime rate per annum charged by JP Morgan Chase in New York, New York (the “Rate”) at the time, shall be paid by the defaulting party within ten (10) days from written demand and evidence of payment therefor, and as to LESSEE shall be recoverable as additional rent. Interest shall accrue at said rate from and after the due date of any payment of the Rent, additional rent or any payment by LESSEE or LESSOR described in this Lease.

19.11 Delivery of this Instrument. This instrument cannot be construed to be a proposal of either LESSOR to LESSEE, nor of LESSEE to LESSOR, and shall have no effect whatsoever between the parties herein named unless properly executed by both parties, it being understood that this instrument has been delivered for examination only, but without any purpose whatsoever of creating or confirming any contractual relationship between LESSOR and LESSEE; provided, however, that upon proper execution of this Lease by both parties, this Section 19.11 shall be null and void.

19.12 Headings. The headings throughout this Lease are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify or aid in the interpretation, construction or meaning of the provisions of this Lease.

19.13 Effect of Unavoidable Delays. The provisions of this section shall be applicable if there shall occur, during the Term, or prior to the commencement thereof any (i) strike(s), lockout(s) or labor dispute(s); or (ii) inability to obtain labor or materials, or reasonable substitutes therefor; or acts of God, governmental restrictions, regulations or controls, enemy or hostile governmental action, civil commotion, fire or other casualty or other conditions similar to those enumerated in this item (ii) beyond the reasonable control of the party obligated to perform. If LESSOR or LESSEE shall, as the result of any of the above described events, fail punctually to perform any obligation on its part to be performed, under this Lease, then such failure shall be excused and not be a breach of this Lease by the party in question, but only to the extent occasioned by such event. If any right or option of either party to

18

take any action under or with respect to this Lease is conditioned upon the same being exercised within any prescribed period of time or at or before a named date, then such prescribed period of time and such named date shall be deemed to be extended or delayed, as the case may be for a period equal to the period of the delay occasioned by any above-described event. Notwithstanding anything herein contained, however, the provisions of this section shall not be applicable to LESSEE’S obligation to pay rent or its obligations to pay any other sum, monies, costs, charges or expenses required to be paid by LESSEE hereunder, and to LESSOR’s obligations under the provisions of Article IV.

19.14 No Representation. Neither LESSOR, LESSOR nor their respective agents have made any representation, warranty or promise with respect to the Premises, except as herein expressly set forth.

19.15 Relationship of Parties. LESSOR and LESSEE shall not be considered or deemed to be joint ventures or partners and neither shall have the power to bind or obligate the other except as set forth herein.

19.16 Counterparts. This Lease may be simultaneously executed in counterparts, each of which when so executed and delivered, shall constitute an original, fully enforceable counterpart for all purposes. Any such counterpart may be executed by facsimile signature with only verbal confirmation, and when so executed and delivered shall be deemed an original and such counterpart(s) together shall constitute only one original.

19.17 Severability. The provisions of this Lease shall be deemed separable. Therefore, if any part of this Lease is rendered void, invalid or unenforceable, such rendering shall not affect the validity or enforceability of the remainder of this Lease.

19.18 Authority. Each party warrants that it has full power, authority and legal right to execute and deliver this Lease and to keep and observe all of the terms and provisions of this Lease on such party’s part to be observed and performed. Each party warrants that this Lease is its valid and enforceable obligation.

19.19 Mitigation of Damages. The parties shall use reasonable commercial efforts to mitigate any of its damages hereunder.

19.20 No Broker. Each of LESSOR and LESSEE represents and warrants to the other party that it has not negotiated with any broker in connection with this Lease and that this Lease was negotiated directly by LESSOR and LESSEE. Each party hereby agrees to indemnify the other against all claims, damages, costs and expenses incurred by the indemnified party as a result of the breach of the foregoing representation or warranty by the indemnifying party.

19.21 Incorporation. The recitals set forth above under “RECITALS” are incorporated herein by reference.

19.22 Damages. Neither party shall be responsible for consequential, indirect, special or punitive damages.

19

19.23 Confidentiality—LESSOR . As used in this Section 19.24, “Information” means all information, whether printed, written, verbal, electronic on computer disk, CAD, photographic or otherwise, relating to LESSOR, including, without limiting the generality of the foregoing, financial information and all disclosure of information which relate to LESSOR’s manufacturing practices.

(a) In the event LESSEE receives any Information, LESSEE agrees to (i) immediately return to LESSOR any such Information, including, without limitation, any copies of the Information which may have been made, without retaining copies, summaries, extracts of information, analyses, reports or other documents that constitute Information and (ii) keep the knowledge of any Information in strict confidence and to not disclose, divulge or communicate, directly or indirectly, intentionally or inadvertently, Information to any person or entity. LESSEE shall not make any copies or reproduce the Information. Any Information obtained by LESSEE shall not confer any rights or interests in the Information to LESSEE or anyone else. All Information and any rights related thereto are and remain the exclusive and absolute property of LESSOR. This Lease does not constitute or create any duty or obligation on the part of LESSOR to provide any Information to LESSEE.

(b) If LESSEE or anyone else for whom LESSEE is liable breaches or attempts to breach the provisions of this Section 19.23, the injury to LESSOR may be irreparable and money damages may not be an adequate remedy. In such event, LESSOR shall be entitled, in addition to all remedies available at law or in equity, to obtain from any court of competent jurisdiction an injunction prohibiting LESSEE or such other person from any further breach or attempted breach of this Section 19.23.

19.24 Confidentiality—LESSEE. As used in this Section 19.24, “Information” means all information, whether printed, written, verbal, electronic on computer disk, CAD, photographic or otherwise, relating to LESSEE, including, without limiting the generality of the foregoing, financial information and all disclosure of information which relate to LESSEE’s manufacturing practices.

(a) In the event LESSOR receives any Information, LESSOR agrees to (i) immediately return to LESSEE any such Information, including, without limitation, any copies of the Information which may have been made, without retaining copies, summaries, extracts of information, analyses, reports or other documents that constitute Information and (ii) keep the knowledge of any Information in strict confidence and to not disclose, divulge or communicate, directly or indirectly, intentionally or inadvertently, Information to any person or entity. LESSOR shall not make any copies or reproduce the Information. Any Information obtained by LESSOR shall not confer any rights or interests in the Information to LESSOR or anyone else. All Information and any rights related thereto are and remain the exclusive and absolute property of LESSEE. This Lease does not constitute or create any duty or obligation on the part of LESSEE to provide any Information to LESSOR.

(b) If LESSOR or anyone else for whom LESSOR is liable breaches or attempts to breach the provisions of this Section 19.24, the injury to LESSEE may be irreparable and money damages may not be an adequate remedy. In such event, LESSEE shall be entitled, in addition to all remedies available at law or in equity, to obtain from any court of competent jurisdiction an injunction prohibiting LESSOR or such other person from any further breach or attempted breach of this Section 19.24.

20

19.25 Attorneys’ Fees. In any action or proceeding which either party brings against the other to enforce its rights hereunder, the non-prevailing party shall pay all costs incurred by the prevailing party, including reasonable attorneys’ fees, which amounts shall be a part of the judgment in said action or proceeding.

19.26 Entire Agreement. This Lease, including the Exhibits attached hereto, and the documents referred to herein, if any, constitute the entire agreement between LESSOR and LESSEE with respect to the leasing of the Premises, and shall not affect any prior or contemporaneous agreements, understandings, proposals and other representations between them.

21

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

ABRAXIS BIOSCIENCE, LLC		APP PHARMACEUTICALS, LLC
“LESSOR”		“LESSEE”
By:	/s/ Patrick Soon-Shiong	By:	/s/ Patrick Soon-Shiong
Name:	Patrick Soon-Shiong	Name:	Patrick Soon-Shiong
Title:	CEO	Title:	CEO

EX-10.9

Exhibit 10.9

EXECUTION COPY

LEASE AGREEMENT

between

APP PHARMACEUTICALS, LLC

and

ABRAXIS BIOSCIENCE, LLC

LEASE AGREEMENT

THIS LEASE AGREEMENT (this “Lease”), dated effective as of the 13^th day of November, 2007 (the “Effective Date”), is made by and between APP Pharmaceuticals, LLC, a Delaware limited liability company (“LESSOR”), and Abraxis BioScience, LLC, a Delaware limited liability company (“LESSEE”).

RECITALS

WHEREAS, LESSOR and LESSEE (and their respective parent companies) have entered into a Separation and Distribution Agreement dated as of the Effective Date (the “Separation Agreement”);

WHEREAS, simultaneously herewith, New Abraxis, Inc., to be renamed Abraxis BioScience, Inc., parent company of LESSEE, and LESSOR are entering into a Manufacturing Agreement (the “Manufacturing Agreement”);

WHEREAS, LESSOR is the owner of that certain improved real property located at and commonly known as the Grand Island facility;

WHEREAS, LESSOR desires to lease to LESSEE a portion of the Grand Island facility, indicated as “Abraxane Area” in Exhibit A (together with all buildings, structures, fixtures and improvements and betterments thereon and appurtenances thereto other than the Contributed Machinery and Equipment (as defined in the Separation Agreement)) thereon attached hereto and made a part hereof (the “Property”);

WHEREAS, notwithstanding that LESSOR owns the Property, LESSEE is, and remains, the owner of the Machinery and Equipment (as defined in the Separation Agreement) of LESSEE; and

WHEREAS, LESSOR desires to lease to LESSEE, and LESSEE desires to lease from LESSOR, (i) the Property (ii) all improvements at any time existing thereon and (iii) all fixtures, equipment, furniture and machinery, excluding, for all purposes, the Contributed Machinery and Equipment of LESSEE (collectively, the “Premises”).

NOW, THEREFORE, in consideration of the mutual promises and premises hereinafter contained, it is hereby mutually agreed as follows:

ARTICLE I

Definitions

1.1 All capitalized terms used in this Lease and not defined herein shall have the meaning ascribed to such terms in the Separation Agreement.

ARTICLE II

Property

2.1 Lease. LESSOR hereby leases to LESSEE the LESSEE’s share of the Premises, hereinafter referred to as the “LESSEE Premises,” and LESSEE leases, hires and takes from LESSOR the LESSEE Premises. LESSEE has inspected the Premises and accepts the same “As Is.” The LESSEE Premises consists of approximately 5,748 square feet of office, warehouse and pharmaceutical space and shall include the right to use and obligation to share (as applicable) any common areas.

ARTICLE III

Term

3.1 Term. The term of this Lease shall commence on the Effective Date and end on December 31, 2011 (the “Term”), unless earlier terminated in accordance with the provisions of this Lease.

3.2 Lease Extension Option.

(a) LESSEE shall have the right and option to renew and extend the Term of this Lease until December 31, 2012 if LESSEE has not obtained the necessary regulatory approvals from the European Medicines Evaluation Agency to manufacture the Product (as defined in the Manufacturing Agreement) in at least two facilities (not including the Grand Island facility) by June 30, 2011. In order to exercise this option, LESSEE shall provide at least three (3) months notice to LESSOR of its intention to renew and extend the Term.

(b) For any extension, the base rent shall be the base rent of the immediately preceding lease year plus three percent (3%).

3.3 Holding Over. If LESSEE retains possession of the Premises or any part thereof after the termination of this Lease or expiration of the Term, LESSEE shall pay to LESSOR a monthly Rent equal to 2.00 times the monthly Rent in effect as of the last month of the Term. This charge shall not limit LESSOR’s right to seek such other remedy as may be available to it at law or equity.

ARTICLE IV

Rent

4.1 Rent. During the Term, LESSEE covenants and agrees to pay LESSOR, as annual rent for the Premises, the aggregate amount of $38,799, which shall be paid monthly (i.e., $3,233.25) on the 1^st day of each month during the Term at the LESSOR’s address for notice hereunder or otherwise as LESSOR may designate (the “Rent”).

- 3 -

ARTICLE V

Services and Utilities

5.1 Services and Utilities. During the Term, LESSOR shall be solely responsible for and shall pay expenses for all utilities used or consumed at the Premises including but not limited to all water, gas, heat, light, power, telephone and other utilities and services supplied to the Premises together with any taxes thereon. If LESSEE desires to install any equipment which shall require additional utility facilities or utility facilities of a greater capacity than the facilities existing on the Effective Date, such installation shall be subject to LESSOR’s prior written approval (such approval not to be unreasonably withheld, conditioned, denied or delayed) of LESSEE’s plans and specifications therefor.

5.2 LESSOR Not Responsible For Interruption of Service. LESSOR shall in no way be liable or responsible for any loss, damage or expense that LESSEE may sustain or incur by reason of any change, failure, interference, disruption or defect in the supply or character of the utilities furnished to the Premises, or if the quantity or character of the utilities supplied to the Premises are no longer available or suitable for LESSEE’s requirements, and no such change, failure, defect, unavailability or unsuitability shall constitute an actual or constructive eviction in whole or in part, or entitle LESSEE to any abatement or diminution of rent or additional rent, or relieve LESSEE from any obligations under the Lease; provided, however, if any service failure arises from the gross negligence or willful misconduct of LESSOR, then (a) the Rent and any additional rent payable under this Lease shall abate in proportion to the fraction of the total rentable area of the Premises that is materially affected by such service failure and (b) LESSEE shall have the right to pursue any and all remedies available at law or in equity.

ARTICLE VI

Repairs and Maintenance

6.1 LESSEE’s Obligations.

(a) Except for Capital Repairs (as hereinafter defined), LESSEE shall be responsible for (i) all repairs (including replacements) necessary to maintain the Premises in substantially the same condition as exists on the Effective Date, normal wear and tear and damage by fire or other casualty and eminent domain excepted. LESSEE shall not be responsible for any maintenance, repairs or replacement in or affecting any portions of the Premises occupied by any tenant or occupant other than LESSEE. In the event that LESSEE has not performed such repairs and LESSOR elects to perform the repair, after written notice and a reasonable opportunity to cure, LESSEE shall reimburse LESSOR the repair costs within thirty (30) days following LESSEE’s receipt of LESSOR’s written demand and evidence of payment therefor.

(b) LESSEE shall also be responsible for making any repairs to the Property caused by any act, omission or negligence of LESSEE or its employees, agents, invitees, licensees, subtenants, or contractors and shall indemnify and save harmless LESSOR from any and all expenses, liens, claims, or damages to either persons or property arising out of, or resulting from the failure to

- 4 -

make such repairs; provided, however, LESSEE shall not be obligated to make any repairs to the Property if the need for such repairs is caused by LESSOR or its agents, contractors, employees, guests or invitees. LESSOR shall have the right to make any repairs that are the responsibility of LESSEE under this Section 6.1(b) at LESSEE’s sole cost and expense after written notice and reasonable opportunity to make the repair, and LESSEE shall reimburse LESSOR the repair costs within thirty (30) days following LESSEE’s receipt of LESSOR’s written demand and evidence of payment therefor.

(c) All repairs conducted by LESSEE shall be accomplished promptly with first class materials, in a good and workmanlike manner, in compliance with all applicable laws of all governmental authorities and in a style, character and quality conforming to the existing construction of the Premises.

6.2 LESSOR’s Obligations. For the purposes of this Lease, “Capital Repairs” shall mean (i) any maintenance, repairs or replacements to the roof, foundation and structural elements of the Premises, (ii) any maintenance, repairs or replacements to the Premises’ systems (which shall include the heating, ventilating, air-conditioning, plumbing, electrical, mechanical and other systems and equipment serving the Premises generally), the common areas or the exterior of the Premises and (iii) maintenance, repairs or replacements to the Premises required to comply with any laws applicable to the Premises (to the extent not relating to LESSEE’s use or occupancy of the Premises) enacted or promulgated after the date of this Lease, in each case, the cost of which is properly characterized as property, plant and equipment according to generally accepted accounting practices. LESSOR, at its expense (subject to reimbursement by LESSEE to the extent provided in Section 6.1 (b)), shall be responsible for all Capital Repairs necessary to keep the Premises in as good condition as exists as of the Effective Date or to comply with any laws applicable to the Premises (to the extent not relating to LESSEE’s use or occupancy of the Premises) enacted or promulgated after the Effective Date. LESSOR shall complete such repairs in a good and workmanlike manner consistent with normal and customary industry standards for buildings similar to the Premises and in compliance with all applicable laws.

ARTICLE VII

Alterations, and Additions

7.1 Alterations and Additions. LESSEE shall have the right, from time to time, without LESSOR’s consent, to make interior alterations, improvements and/or additions in and to the Premises that will have no effect on the roof, foundation or other structural elements of the Premises (the “Building Structure”) and will have no adverse effect on the heating, ventilating, air-conditioning, plumbing, electrical, mechanical and other systems and equipment serving the Premises generally (the “Building Systems”). LESSEE may make alterations, improvements and/or additions that affect the exterior of the Premises or may have a material adverse effect on the Building System only after first obtaining the prior written consent of LESSOR, which consent shall not be unreasonably withheld, conditioned, delayed or denied. All such approved additions, alterations or improvements shall be in accordance to plans and specifications prepared by a duly qualified architect or engineer who shall submit such plans and specifications to LESSOR for written approval, not to be unreasonably withheld, conditioned, delayed or denied. All alterations, improvements, and additions to the Premises shall be made in accordance with all applicable laws and shall at once when made or installed be deemed to have attached to

- 5 -

the freehold and to have become the property of LESSOR and shall remain for the benefit of LESSOR at the end of the Term or other earlier termination of this Lease. Any equipment installed by LESSEE during the Term shall at LESSEE’s election be removed at the expiration or termination of this Lease or shall remain at the Premises. In the event of making such alterations, improvements, and/or additions as herein provided, LESSEE shall indemnify and save harmless LESSOR from any and all expenses, liens, claims, or damages to either persons or Premises arising out of, or resulting from the undertaking or making of said alterations, additions, and improvements. Notwithstanding anything to the contrary set forth herein, LESSEE shall have the right, without LESSOR’s consent or approval, to make non-structural alterations of less than $50,000 in any instance.

ARTICLE VIII

Taxes

8.1 Payment of Taxes. LESSOR shall pay all real property taxes applicable to the Premises. LESSOR’s obligations under this Section 8.1 shall survive the expiration or termination of this Lease.

8.2 Definition of Real Property Tax. As used herein, the term “real property tax” shall include any form of fee or tax imposed by any authority having the direct or indirect power to tax or assess, including any city, county, state or federal government, any school, agricultural, lighting, drainage or other improvement district thereof, or any private owners association created by covenants, conditions and restrictions binding on the Premises, as against any legal or equitable interest of LESSOR in the Premises, or as against LESSOR’s business of leasing the Premises. The term “real property tax” shall also include any tax, fee, levy, assessment or charge, or any increase therein, imposed by reason of events occurring during the Term, including, but not limited to, a change in the ownership of the Premises. Notwithstanding the foregoing, “real property tax” shall not include: (i) all excess profits taxes, franchise taxes, succession taxes, estate taxes, capital stock taxes, inheritance taxes, gift taxes, mortgage taxes, federal and state income taxes or any other taxes imposed upon or measured by LESSOR’s gross income or profits unless the same is specifically imposed in lieu of real estate taxes or ad valorem taxes; (ii) penalties for late payments; (iii) special assessments; and (iv) transfer taxes imposed upon any transfer of the Premises or any interest therein.

8.3 Personal Property Taxes.

(a) LESSEE shall pay prior to delinquency all taxes assessed against and levied upon LESSEE’s trade fixtures, furnishings, Machinery and Equipment of LESSEE and all other personal property of LESSEE contained in the Premises or otherwise owned or operated by LESSEE at the Premises. When possible, LESSEE shall cause said trade fixtures, furnishings, Machinery and Equipment of LESSEE and all other personal property to be assessed and billed separately from the real property of LESSOR.

(b) If any of LESSEE’s personal property shall be assessed and billed with LESSOR’s real property, LESSEE shall pay LESSOR the taxes attributable to LESSEE within thirty (30) days after receipt of a written statement setting forth the taxes applicable to LESSEE’s property.

- 6 -

ARTICLE IX

Indemnification; Insurance

9.1 Indemnity. LESSEE shall indemnify, defend and hold harmless LESSOR (solely with respect to LESSOR’s position as the owner of the Premises and the landlord under this Lease) from and against any and all claims arising from LESSEE’s use of the Premises, or from the conduct of LESSEE’s business or from any activity, work or things done, permitted or suffered by LESSEE in or about the Premises or elsewhere, and shall further indemnify, defend and hold harmless LESSOR (solely with respect to LESSOR’s position as the owner of the Premises and the landlord under this Lease) from and against any and all claims arising from any breach or default in the performance of any obligation on LESSEE’s part to be performed under the terms of this Lease or arising from any negligence of LESSEE, or any of LESSEE’s agents, contractors or employees, and from and against all costs, attorneys’ fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon; provided, however, LESSEE shall not indemnify, defend or hold harmless LESSOR from and against any claim, liability, expense, lawsuit, cost, loss or other damage, including reasonable attorneys’ fees, which arise from or are caused by or in anyway connected to the negligence or willful misconduct of LESSOR, its employees, agents, contractors, guests or invitees. Subject to Section 9.2 below, LESSOR shall indemnify, defend and hold harmless LESSEE (solely with respect to LESSEE’s position as the tenant under this Lease) from and against any and all claims arising from LESSOR’s use of or entry onto the Premises, and shall further indemnify, defend and hold harmless LESSEE (solely with respect to LESSEE’s position as the tenant under this Lease) from and against any and all claims arising from any breach or default in the performance of any obligation on LESSOR’s part to be performed under the terms of this Lease or arising from any gross negligence or willful misconduct of LESSOR, or any of LESSOR’s agents, contractors or employees and from and against all costs, attorneys’ fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon; provided, however, LESSOR shall not indemnify, defend or hold harmless LESSEE from and against any claim, liability, expense, lawsuit, cost, loss or other damage, including reasonable attorneys’ fees, which arise from or are caused by or in anyway connected to the negligence or willful misconduct of LESSEE, its employees, tenants, agents, guests or invitees.

9.2 Exemption of LESSOR From Liability.

(a) Except to the extent caused by the gross negligence or willful misconduct of LESSOR, its employees, agents, guests or invitees, LESSEE hereby agrees that LESSOR and its agents shall not be liable for injury to LESSEE’s business or any loss of income therefrom or for damage to the goods, wares, merchandise or other property of LESSEE, LESSEE’s employees, invitees, customers or any other person in or about the Premises, nor shall LESSOR be liable for injury to the person of LESSEE, LESSEE’s employees, agents or contractors, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction, or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning, light fixtures or from any other cause whether said damage or injury results from conditions arising upon the

- 7 -

Premises or upon other portions of the building of which the Premises are a part, or from other sources or places, and regardless of whether the cause of such damage or injury or the means of repairing the same is inaccessible to LESSEE. LESSOR shall not be liable for any damages arising from any act or neglect of any other lessee, if any, of the building in which the Premises are located.

(b) No directors, officers, employees or agents of LESSOR or individual, member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be LESSOR or any successor in interest, shall be subject to personal liability with respect to any of the covenants or conditions of this Lease. LESSEE will not seek recourse against the directors, officers, employees or agents of LESSOR or an individual, member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be LESSOR or any successor-in-interest or any of their personal assets for such satisfaction. It is mutually agreed that this clause is and shall be considered an integral part of this Lease.

(c) No directors, officers, employees or agents of LESSEE or individual, member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be LESSEE or any successor in interest, shall be subject to personal liability with respect to any of the covenants or conditions of this Lease. LESSOR will not seek recourse against the directors, officers, employees or agents of LESSEE or an individual, member of a joint venture, tenancy in common, firm or partnership, general or limited, which may be LESSEE or any successor-in-interest or any of their personal assets for such satisfaction. It is mutually agreed that this clause is and shall be considered an integral part of this Lease.

(d) Remedies and limitations thereon set forth in this Lease shall only apply in this Lease.

9.3 Insurance.

(a) LESSOR shall obtain and maintain “all risk” property and casualty insurance on the Property, including the Premises. LESSEE shall pay the cost of the premiums for said insurance pertaining to the Premises or, if LESSOR consents, obtain Property & General Liability coverage of its own on the Premises, with LESSOR as loss payee on the Property and as additional named insured on the general liability policy. LESSEE shall carry and maintain at all times throughout the Term, at its expense, insurance with terms, coverage and companies satisfactory to LESSOR:

(i) commercial (comprehensive) liability insurance, with coverage against assumed or contractual liability under this Lease, with respect to liability arising out of ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto, to afford protection with respect to personal injury, loss of life and property damage, of not less than $2,000,000 per occurrence combined single limit subject to a $2,000,000 general aggregate;

- 8 -

(ii) “all risk” property insurance, including boiler and machinery comprehensive form, if applicable, covering damage to or loss of any of LESSEE’s personal property, fixtures, equipment and alterations, including electronic data processing equipment (and coverage for the full replacement cost thereof, including business interruption of LESSEE), together with, if the property of LESSEE’s invitees is to be kept in the Premises, warehouser’s legal liability or bailee customers insurance for the full replacement cost of the property belonging to invitees and located in the Premises; and

(iii) worker’s compensation insurance and employer’s liability insurance in amounts required by applicable law or statute covering all persons employed in connection with LESSEE.

(b) LESSEE’s Contractor Insurance. LESSEE shall require any contractor of LESSEE performing work on the Premises to carry and maintain, at no expense to LESSOR:

(i) worker’s compensation insurance in form and amounts required by law; and

(ii) public liability insurance insuring LESSEE and LESSOR as additional insured, against liability which may arise on account of any alteration, addition, improvement or construction, written on a claims occurrence basis with minimum limits of $1,000,000/occurrence (it being understood that this is public liability insurance and not product liability insurance).

(c) Insurance Companies. Insurance required to be maintained by LESSEE shall be written by companies licensed to do business in the state in which the Premises are located and having, at the time the initial policies are issued, a General Policyholders Rating of at least “A-/VII” (or such higher rating as may be required by a lender having a lien on the Premises) as set forth in the most current issue of “Best’s Insurance Guide.”

(d) Policy Requirements. Comprehensive commercial liability and “all risk” property insurance policies evidencing such insurance shall, with respect to comprehensive commercial liability policies, name LESSOR and/or its designee(s) as additional insured and, with respect to “all risk” property insurance policies, name LESSOR and/or its designee(s) as loss payee, shall be primary and noncontributory and shall contain a provision, by means of endorsement or otherwise, whereby the insurer agrees that such policy shall not be cancelled, materially changed or not renewed without at least thirty (30) days advance written notice to LESSOR (except in case of cancellation for non-payment of premium, in which case ten (10) days advance written notice shall be sufficient) at the address set forth herein, or to such other party or address as may be designated by LESSOR or its designee from time to time. Such commitment to provide prior notice of cancellation, modification or non-renewal shall be without qualifications. All liability insurance policies shall be written on a claims occurrence basis and have a separation of insureds endorsement.

(e) Certificates of Insurance. Prior to the Commencement Date and thereafter on the anniversary of the issuance of each policy LESSEE shall furnish to LESSOR certificates of insurance evidencing the coverage under each of the policies required by LESSOR herein. Said certificate shall include an acknowledgment of the commitment to provide LESSOR thirty (30) days’ prior written notice of cancellation, modification or non-renewal (except ten (10) days for non-payment).

- 9 -

(f) LESSEE’s Failure to Comply with Insurance Requirements. In the event that LESSEE fails to comply with LESSEE’S insurance requirements as stated herein, then, in addition to (and not in lieu of) all other remedies that LESSOR may have hereunder for a breach by LESSEE, LESSOR may, but shall not be obligated to, obtain such insurance at LESSOR’s sole option and keep the same in effect, and LESSEE shall pay LESSOR the premium cost thereof upon demand. It is agreed, however, that LESSOR is not responsible for any inadequacy of insurance protection purchase by LESSEE or by LESSOR on behalf of LESSEE.

(g) Mutual Waiver of Subrogation. Neither LESSOR nor LESSEE shall be liable to the other or to any insurance company (by way of subrogation or otherwise) providing coverage for any loss or damage to any building, structure or other tangible property, or any resulting loss of income, even though such loss or damage might have been occasioned by the negligence of the other contracting party, its agents or employees, provided and to the extent such loss or damage is covered by insurance, it being acknowledged and agreed that the amount of any insurance deductibles is expressly excluded from the waiver provisions herein set forth. Notwithstanding the foregoing, the cost of any damage not covered by insurance shall be borne by the responsible party.

(h) Notice of Fire. LESSEE shall give immediate notice to LESSOR in case of fire or accidents in the Premises or of defects therein or in any fixtures or equipment and both parties shall procure a waiver of right of subrogation against one another on the part of all insurance carriers in connection with all insurance policies covering losses arising out of destruction or damage to the Premises or its contents.

ARTICLE X

Compliance with Requirements

10.1 Compliance. LESSEE will use commercially reasonable efforts not to do any act or thing which constitutes a public or private nuisance. LESSOR will join in the application for any permit or authorization with respect to any Legal Requirements if such joinder is necessary. The term “Legal Requirements” shall mean all statutes, codes, ordinances, rules, regulations, orders, judgments or decrees of governments, authorities, agencies, officials and officers which now or at any time hereafter may be applicable to the Property.

ARTICLE XI

[Intentionally Omitted]

- 10 -

ARTICLE XII

Covenant Against Liens

12.1 Liens of LESSEE. If because of any act or omission of LESSEE, any mechanic’s lien or other lien, charge, or order for the payment of money shall be filed against any portion of the Premises, LESSEE shall, at its own cost and expense, cause the same to be discharged of record or bonded within ninety (90) days after written notice from LESSOR to LESSEE of the filing thereof.

12.2 Removal of Liens. If LESSEE shall fail to cause such liens to be discharged of record or bonded within the aforesaid ninety (90) day period or satisfy such liens within thirty (30) days after any judgment in favor of such lien holders from which no further appeal might be taken, then LESSOR shall have the right to cause the same to be discharged. All amounts paid by LESSOR to cause such liens to be discharged shall constitute additional rent payable by LESSEE to LESSOR.

ARTICLE XIII

Environmental Matters

13.1 Conduct of Operations. During the Term, LESSEE shall conduct its operations at the Premises in material compliance with applicable Environmental Laws.

13.2 Hazardous Materials. LESSEE shall not cause nor permit, nor allow any of LESSEE’s employees, agents, customers, visitors, invitees, licensees, contractors, assignees or sublessee’s (individually, a “LESSEE PARTY” and collectively, “LESSEE PARTIES”) to cause or permit, any Hazardous Materials to be brought upon, stored, manufactured, generated, blended, handled, recycled, treated, disposed or used on, under or about the Premises, except in material compliance with all applicable Environmental Laws. As used herein, “Hazardous Materials” means any chemical, substance, material, controlled substance, waste or combination thereof, whether solid, semi-solid, liquid or gaseous, which is hazardous to human health or safety or to the environment due to its radioactivity, ignitability, corrosivity, reactivity, explosivity, toxicity, carcinogenicity, mutagenicity, phytotoxicity, infectiousness or other harmful properties or effects, including, without limitation, petroleum and petroleum byproducts, asbestos, radon, polychlorinated biphenyls (PCBs), refrigerants regulated by the Environmental Protection Agency’s “Refrigerant Recycling Rule,” as amended from time to time, and all of those chemicals, substances, materials, controlled substances, wastes or combinations thereof which are now or become in the future listed, defined or regulated in any manner by any Environmental Law based upon, directly or indirectly, such properties or effects. As used herein, “Environmental Laws” means any and all federal, state or local laws, regulations, standards, decisions of courts, ordinances, rules, codes, orders, decrees, directives, guidelines, permits or permit conditions concerning the protection of public health and safety, worker health and safety or the environment, currently existing and as amended, enacted, issued or adopted in the future which are or become applicable to and enforceable upon LESSEE, or the Premises. LESSEE and LESSEE PARTIES shall comply in all material respects with all Environmental Laws and promptly notify LESSOR in writing of the material violation of any Environmental Law or any reportable spill and/or release of any Hazardous

- 11 -

Materials, in, on, under or about the Premises or the improvements thereon or the soil or groundwater thereunder. LESSOR shall have the right to enter upon and inspect the Premises and to conduct tests, monitoring and investigations, in each case after 24 hour prior notice to LESSEE or as is otherwise reasonably necessary in the operation and/or protection of the Premises, its components or persons therein; provided however, that LESSOR shall take reasonable commercial efforts to minimize any disturbance to LESSEE or any interruption of LESSEE’S business. If such tests indicate the presence of any environmental condition caused or exacerbated during the Term by LESSEE or any LESSEE PARTY or arising during LESSEE’s occupancy, LESSEE shall reimburse LESSOR for the cost of conducting such tests (except to the extent such environmental condition arises from or is caused or exacerbated by the gross negligence or willful misconduct of LESSOR, its employees, agents, contractors, guests or invitees). The phrase “environmental condition” shall mean any adverse condition relating to the release of any Hazardous Materials to the environment, including surface water, groundwater, drinking water supply, land, surface or subsurface strata or the ambient air. In the event of any such environmental condition, LESSEE shall promptly take any and all steps necessary to rectify the same to the satisfaction of the applicable agencies.

13.3 LESSEE’s Indemnification. LESSEE shall indemnify, defend and hold harmless LESSOR from and against any and all claims, judgments, causes of action, damages, penalties, fines, costs, liabilities, losses and expenses arising at any time during or after the Term from (a) LESSEE’s and/or any LESSEE PARTY’s breach of this Section 13 or (b) the presence, spill and/or release of Hazardous Materials brought onto the Premises by or for LESSEE and/or any LESSEE PARTY during the Term, in each case except to the extent arising from, caused by or in any way connected to the gross negligence or willful misconduct of LESSOR, its employees, agents, contractors, guests or invitees. This indemnity shall include, without limitation, the cost of any required or necessary repair, cleanup or detoxification, and the preparation and implementation of any closure, monitoring or other required plans, whether such action is required or necessary prior to or following the termination of this Lease. Neither the written consent by LESSOR to the presence of Hazardous Materials on, under or about the Premises, nor the strict compliance by LESSEE with all Environmental Laws, shall excuse LESSEE from LESSEE’s obligation of indemnification pursuant hereto. LESSEE’s obligations pursuant to the foregoing indemnity shall survive the expiration or termination of this Lease.

13.4 LESSOR’s Indemnification. LESSOR shall indemnify, defend and hold harmless LESSEE from and against any and all claims, judgments, causes of action, damages, penalties, fines, costs, liabilities, losses and expenses arising at any time during or after the Term from (a) any environmental condition or Hazardous Materials that come to exist on, under or about the Premises during the Term as a result of or in connection with the activities of LESSOR, its employees, agents, contractors, guests or invitees or (b) any environmental condition or Hazardous Materials which come to exist on, under or about the Premises after the Term, in each case except to the extent arising from, caused by or in any way connected to the negligence or willful misconduct of LESSEE, its employees, agents, contractors, guests or invitees. This indemnity shall include, without limitation, the cost of any required or necessary repair, cleanup or detoxification, and the preparation and implementation of any closure, monitoring or other required plans, whether such action is required or necessary prior to or following the termination of this Lease. Neither the written consent by LESSEE to the presence of Hazardous Materials on, under or about the Premises, nor the strict compliance by LESSOR with all Environmental Laws, shall excuse LESSOR from LESSOR’s obligation of indemnification pursuant hereto. LESSOR’s obligations pursuant to the foregoing indemnity shall survive the expiration or termination of this Lease.

- 12 -

13.5 Surrender of the Premises. Notwithstanding any other provision in this Lease, upon expiration or earlier termination of this Lease, LESSEE shall conduct an environmental site assessment (“ESA”) of the Premises with the objective of evaluating the potential for releases of Hazardous Materials on the Premises as a result of LESSEE’s operations on the Premises during the Term. The ESA shall be conducted, at the expense of LESSEE, by a third-party environmental consultant chosen by LESSEE and approved by LESSOR, which approval shall not be unreasonably withheld. If the ESA reveals evidence of a release of Hazardous Materials from LESSEE’s operations at the Premises during the Term, then LESSEE shall conduct remedial action to address such release as required by applicable Environmental Laws. LESSEE’s obligation to complete any such remedial action initiated under this Section 13.5 shall survive the termination or expiration of this Lease.

ARTICLE XIV

Surrender

14.1 Surrender. LESSEE shall deliver and surrender to LESSOR possession of the Premises upon expiration of this Lease or its earlier termination in substantially the same condition as exists on the Effective Date (except for normal wear and tear and, subject to the provisions of Article XV, damage by fire or other casualty, the elements and any cause beyond LESSEE’s reasonable control).

14.2 Surrender of LESSEE’s Machinery and Equipment & Trade Fixtures. LESSEE may, at its option, remove all equipment, fixtures and machinery related to its “nab” technology and all other assets of LESSEE at the Premises (including, without limitation, any inventory, records, raw materials, WIP, furnished goods, supplies, vehicles, office furniture, computers and other hardware and software) (collectively the “Retained Equipment”), whose title shall be retained by LESSEE on the expiration or earlier termination of this Lease. Within thirty (30) days from the expiration or earlier termination of this Lease, LESSEE shall remove the Retained Equipment from the Premises at no cost to LESSOR. Any damage to the Premises caused by the removal of the Retained Equipment shall be restored by LESSEE to the condition that existed prior to such removal. LESSEE’s obligation to observe or perform this covenant shall survive the expiration or termination of this Lease.

ARTICLE XV

Destruction Of Premises

15.1 Termination for Major Casualties. In the event that the Premises are damaged or destroyed by fire, windstorm or any other casualty (a “Casualty”) to such an extent that, in the commercially reasonable judgment of either party, (a) at least 75% of the rentable area of the Premises cannot be occupied and used by either party in the ordinary course of business or (b) any damage or destruction to the Premises cannot be repaired within one hundred eighty (180) days from the date of the Casualty (each such event, a “Material

- 13 -

Casualty”), or if insurance proceeds (excluding the amount of the deductible under the applicable insurance) shall be insufficient to restore such Casualty (unless such insufficiency is the result of either party’s failure to maintain the insurance required under this Lease), then either party shall have the right to terminate this Lease as of the date of such Casualty (notwithstanding any contrary provisions in the Lease) by furnishing written notice to the other party to that effect not more than thirty (30) days after the Casualty. If either party so terminates this Lease under this Section 15.1, the Rent and additional rent with respect thereto shall be prorated and paid or refunded, as appropriate, from the date of the Material Casualty.

15.2 Restoration of Damage. In the event of a Casualty that is not a Material Casualty, or if neither party elects to exercise its right to terminate this Lease as provided in Section 15.1 above in connection with a Material Casualty, then LESSOR, at its expense (subject to reimbursement from any proceeds of insurance arising from the applicable Casualty), shall repair and restore the Premises to a condition at least equivalent to the condition that prevailed immediately before such Casualty with reasonable diligence and continuity. If, during the period of such repair and restoration, LESSEE is unable to reasonably use all or any part of the Premises in the ordinary course of LESSEE’s business without material interference or impairment, then LESSEE shall receive a reduction in the Rent and additional rent proportionate to the fraction of the Premises unusable by LESSEE in the ordinary course of its business without material interference or impairment from the date of the applicable Casualty until LESSEE is again reasonably able to use the entire Premises without material interference or impairment. If LESSOR is obligated to repair and restore the Premises as aforesaid, LESSEE shall make available to LESSOR all insurance proceeds received on account of the applicable Casualty (other than any insurance proceeds attributable to LESSEE’s property), and LESSOR shall apply such proceeds towards the cost of such repair and restoration to the extent necessary to comply with this Section 15.2.

ARTICLE XVI

Condemnation

16.1 Condemnation of the Premises. In the event that title to all or any material part of the Premises shall be taken for any public or quasi-public use under any statute or right of eminent domain, or by private purchase in lieu thereof, either party may terminate this Lease on the date of transfer of such title.

16.2 Notice of Service of Process. Each party shall give the other immediate notice of the service on them or either of them of any legal process in connection with any such condemnation proceedings. Each party shall execute and deliver to the other all reasonable instruments that may be reasonably required to effectuate the provisions hereof.

- 14 -

ARTICLE XVII

Events of Default and Remedies

17.1 LESSEE Default. The following shall constitute a LESSEE Default under this Lease: (a) if LESSEE shall fail to pay the Rent, and/or any additional rent, expense or charge under this Lease within ten (10) days after receipt by LESSEE of written notice that they are due; or (b) if LESSEE shall neglect or fail to perform or observe, in any material respect, any other covenants, terms, provisions or conditions to be performed or observed by LESSEE under this Lease within thirty (30) days after written notice of said default is given by LESSOR. If the default included in Section 17.1(b) cannot reasonably be cured within thirty (30) days, LESSEE shall not be in default of this Lease if LESSEE commences to cure the default within such thirty (30) day period and diligently and in good faith continues to cure the default.

17.2 LESSOR’s Remedies. Upon the occurrence and during the continuance of any LESSEE Default specified in Section 17.1, LESSOR may, at its option, terminate this Lease, in which case:

(a) Neither LESSEE nor any person claiming through or under LESSEE shall be entitled to acquire or remain in possession of the Premises, and LESSOR shall have no further liability hereunder to LESSEE or any person claiming through or under LESSEE, and if LESSEE or any such person is in possession, LESSEE or any such person shall forthwith quit and surrender the Premises to LESSOR without further demand or notice, and LESSOR may lawfully enter the Premises, using such remedies as may be available under the law, and remove all persons and chattels therefrom and LESSOR shall not be liable for damages or otherwise by reason of re-entry or termination of this Lease or its terms;

(b) LESSOR shall have the right of eviction and the right to invoke any remedy allowed at law or in equity as if re-entry, unlawful detainer proceedings and other remedies were not herein provided for; and

(c) Notwithstanding anything contained herein to the contrary, the exercise of any remedy provided pursuant to this Lease or under law shall not deprive LESSOR of other actions against the LESSEE for possession or rent, and all such remedies are non-exclusive and can be exercised concurrently or separately as LESSOR desires.

ARTICLE XVIII

Certificates/Waivers

18.1 Certificates. Either party shall, without charge, at any time and from time to time hereafter, within ten (10) business days after written request of the other, certify by written instrument duly executed and acknowledged to any mortgagee or purchaser, or proposed mortgagee or proposed purchaser, or any other person specified in such request: (a) as to whether this Lease has been supplemented or amended, and if so, the substance and manner of such supplement or amendment; (b) as to the validity, force and effect of this Lease, in accordance with its terms as then provided; (c) as to the existence of any default thereunder; (d) as to the

- 15 -

existence of any offsets, counterclaims or defenses thereto on the part of such other party; (e) as to the commencement and expiration dates of the term of this Lease; and (f) as to any other matters as may reasonably be so requested. Any such certificate may be relied upon by the party requesting it and any other person to whom the same may be exhibited or delivered and the contents of such certificate shall be binding on the party executing the same.

18.2 LESSOR Waiver of Liens. LESSOR hereby expressly waives any landlord’s lien, whether contractual or statutory, to any of LESSEE’s Property. Additionally, from time to time, and in any event within thirty (30) days following a written request by LESSEE, LESSOR shall, unless LESSEE is then in default hereunder, execute and return to LESSEE a written waiver (on any form reasonably required) of LESSOR’s lien rights under applicable law with respect to any of LESSEE’s Property.

ARTICLE XIX

MISCELLANEOUS PROVISIONS

19.1 Assignment or Subleasing Prohibited. LESSEE is prohibited from subletting the Premises in whole or in part, or of transferring or in any way assigning or conveying this Lease in whole or in part to any person other than a subsidiary or an affiliate or parent corporation of LESSEE, without the prior written consent of LESSOR. If LESSEE sublets, transfers or in any way assigns or conveys this Lease, in whole or in part, to a subsidiary or an affiliate or parent corporation of LESSEE, LESSEE shall provide LESSOR with prior written notice of said action. LESSEE’s violation of this clause constitutes just cause for LESSOR to terminate and cancel the Lease.

19.2 Quiet Enjoyment. LESSEE, upon paying the Rent and all additional rent and other charges, and performing all the other terms of this Lease, shall quietly have and enjoy the Premises during the term of this Lease without hindrance or interference by anyone claiming by or through LESSOR.

19.3 Access. LESSOR reserves the right, in accordance herewith, to enter the Premises in order to inspect the same after 24 hour prior notice to LESSEE or as is otherwise reasonably necessary in the operation and/or protection of the Premises, its components or persons therein; provided however, that LESSOR shall take reasonable commercial efforts to minimize any disturbance to LESSEE or any interruption of LESSEE’s business.

19.4 Amendments. This Lease may not be amended, modified or terminated nor may any obligation hereunder be waived orally, and no such amendment, modification, termination or waiver will become effective for any purpose unless it is in writing and signed by the party against whom enforcement thereof is sought.

19.5 Waiver. Failure on the part of either party to complain of any action or non-action on the part of the other party, no matter how long the same may continue, shall never be deemed to be a waiver by such party of any of its rights hereunder. No waiver at any time of any of the provisions hereof by either party shall be construed as a waiver of any of the other provisions hereof, and either’s waiver at any time of any of the provisions hereof shall not be construed as a waiver at any subsequent time of the same provisions. The consent or approval by either party to or of any action by the other party requiring such consent or approval shall not be deemed to waive or render unnecessary said party’s consent or approval to or of any subsequent similar act.

- 16 -

19.6 Invalidity of Particular Provisions. If any term or provision of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.

19.7 Provisions Binding, Etc. Except as herein otherwise specifically provided, the terms hereof shall be binding upon and shall inure to the benefit of the successors and assigns, respectively, of LESSOR and LESSEE. Each term and each provision of this Lease to be performed by LESSEE shall be construed to be both a covenant and a condition. The reference contained to successors and assigns or LESSEE is not intended to constitute a consent to assignment by LESSEE, but has reference only to those instances in which LESSOR may later give written consent to a particular assignment as required by this Lease.

19.8 Governing Law. This Lease shall be governed exclusively by the provisions hereof and by the laws of the State of Delaware as the same may from time to time exist.

19.9 Notices. All notices, requests, consents and other communications hereunder shall be deemed given: (i) when delivered if delivered personally (including by courier); (ii) on the third day after mailing, if mailed, postage prepaid, by registered or certified mail (return receipt requested); (iii) on the day after mailing if sent by a nationally recognized overnight delivery service which maintains records of the time, place, and recipient of delivery; or (iv) upon receipt of a confirmed transmission, if sent by telex, telecopy or facsimile transmission, in each case to the parties at the following addresses or to other such addresses as may be furnished in writing by one party to the others:

If intended for LESSEE, addressed to it at:

ABRAXIS BIOSCIENCE, LLC

11755 Wilshire Boulevard

Suite 2000

Los Angeles, CA 90025

Fax: (310) 883-3138

Attention: General Counsel

with copies to:

ABRAXIS BIOSCIENCE, INC.

11755 Wilshire Boulevard

Suite 2000

Los Angeles, CA 90025

Fax: (310) 883-3138

Attention: General Counsel

- 17 -

If intended for LESSOR, addressed to it at:

APP PHARMACEUTICALS, LLC

1501 East Woodfield Road

Suite 300 East

Schaumburg, IL 60173-5837

Attention: General Counsel

with copies to:

APP PHARMACEUTICALS, INC.

1501 East Woodfield Road

Suite 300 East

Schaumburg, IL 60173-5837

Attention: General Counsel

19.10 Right to Cure Defaults. Either party may, but shall not be obligated to, cure at any time, after written notice and reasonable opportunity to cure, any default by the other party under this Lease; and whenever a party so elects, all costs and expenses incurred by such party in curing a default, including, without limitation, reasonable attorneys’ fees together with interest on the amount of costs and expenses so incurred at the rate of two percent (2%) over and above the prevailing prime rate per annum charged by JP Morgan Chase in New York, New York (the “Rate”) at the time, shall be paid by the defaulting party within ten (10) days from written demand and evidence of payment therefor, and as to LESSEE shall be recoverable as additional rent. Interest shall accrue at said rate from and after the due date of any payment of the Rent, additional rent or any payment by LESSEE or LESSOR described in this Lease.

19.11 Delivery of this Instrument. This instrument cannot be construed to be a proposal of either LESSOR to LESSEE, nor of LESSEE to LESSOR, and shall have no effect whatsoever between the parties herein named unless properly executed by both parties, it being understood that this instrument has been delivered for examination only, but without any purpose whatsoever of creating or confirming any contractual relationship between LESSOR and LESSEE; provided, however, that upon proper execution of this Lease by both parties, this Section 19.11 shall be null and void.

19.12 Headings. The headings throughout this Lease are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify or aid in the interpretation, construction or meaning of the provisions of this Lease.

19.13 Effect of Unavoidable Delays. The provisions of this section shall be applicable if there shall occur, during the Term, or prior to the commencement thereof any (i) strike(s), lockout(s) or labor dispute(s); or (ii) inability to obtain labor or materials, or reasonable substitutes therefor; or acts of God, governmental restrictions, regulations or controls, enemy or hostile governmental

- 18 -

action, civil commotion, fire or other casualty or other conditions similar to those enumerated in this item (ii) beyond the reasonable control of the party obligated to perform. If LESSOR or LESSEE shall, as the result of any of the above described events, fail punctually to perform any obligation on its part to be performed, under this Lease, then such failure shall be excused and not be a breach of this Lease by the party in question, but only to the extent occasioned by such event. If any right or option of either party to take any action under or with respect to this Lease is conditioned upon the same being exercised within any prescribed period of time or at or before a named date, then such prescribed period of time and such named date shall be deemed to be extended or delayed, as the case may be for a period equal to the period of the delay occasioned by any above-described event. Notwithstanding anything herein contained, however, the provisions of this section shall not be applicable to LESSEE’S obligation to pay rent or its obligations to pay any other sum, monies, costs, charges or expenses required to be paid by LESSEE hereunder, and to LESSOR’S obligations under the provisions of Article IV.

19.14 No Representation. Neither LESSOR, LESSOR nor their respective agents have made any representation, warranty or promise with respect to the Premises, except as herein expressly set forth.

19.15 Relationship of Parties. LESSOR and LESSEE shall not be considered or deemed to be joint ventures or partners and neither shall have the power to bind or obligate the other except as set forth herein.

19.16 Counterparts. This Lease may be simultaneously executed in counterparts, each of which when so executed and delivered, shall constitute an original, fully enforceable counterpart for all purposes. Any such counterpart may be executed by facsimile signature with only verbal confirmation, and when so executed and delivered shall be deemed an original and such counterpart(s) together shall constitute only one original.

19.17 Severability. The provisions of this Lease shall be deemed separable. Therefore, if any part of this Lease is rendered void, invalid or unenforceable, such rendering shall not affect the validity or enforceability of the remainder of this Lease.

19.18 Authority. Each party warrants that it has full power, authority and legal right to execute and deliver this Lease and to keep and observe all of the terms and provisions of this Lease on such party’s part to be observed and performed. Each party warrants that this Lease is its valid and enforceable obligation.

19.19 Mitigation of Damages. The parties shall use reasonable commercial efforts to mitigate any of its damages hereunder.

19.20 No Broker. Each of LESSOR and LESSEE represents and warrants to the other party that its has not negotiated with any broker in connection with this Lease and that this Lease was negotiated directly by LESSOR and LESSEE. Each party hereby agrees to indemnify the other against all claims, damages, costs and expenses incurred by the indemnified party as a result of the breach of the foregoing representation or warranty by the indemnifying party.

- 19 -

19.21 Incorporation. The recitals set forth above under “RECITALS” are incorporated herein by reference.

19.22 Damages. Neither party shall be responsible for consequential, indirect, special or punitive damages.

19.23 Confidentiality—LESSOR. As used in this Section 19.24, “Information” means all information, whether printed, written, verbal, electronic on computer disk, CAD, photographic or otherwise, relating to LESSOR, including, without limiting the generality of the foregoing, financial information and all disclosure of information which relate to LESSOR’s manufacturing practices.

(a) In the event LESSEE shall become receives any Information, LESSEE agrees to (i) immediately return to LESSOR any such Information, including, without limitation, any copies of the Information which may have been made, without retaining copies, summaries, extracts of information, analyses, reports or other documents that constitute Information and (ii) keep the knowledge of any Information in strict confidence and to not disclose, divulge or communicate, directly or indirectly, intentionally or inadvertently, Information to any person or entity. LESSEE shall not make any copies or reproduce the Information. Any Information obtained by LESSEE shall not confer any rights or interests in the Information to LESSEE or anyone else. All Information and any rights related thereto are and remain the exclusive and absolute property of LESSOR. This Lease does not constitute or create any duty or obligation on the part of LESSOR to provide any Information to LESSEE.

(b) If LESSEE or anyone else for whom LESSEE is liable breaches or attempts to breach the provisions of this Section 19.23, the injury to LESSOR may be irreparable and money damages may not be an adequate remedy. In such event, LESSOR shall be entitled, in addition to all remedies available at law or in equity, to obtain from any court of competent jurisdiction an injunction prohibiting LESSEE or such other person from any further breach or attempted breach of this Section 19.23.

19.24 Confidentiality—LESSEE. As used in this Section 19.24, “Information” means all information, whether printed, written, verbal, electronic on computer disk, CAD, photographic or otherwise, relating to LESSEE, including, without limiting the generality of the foregoing, financial information and all disclosure of information which relate to LESSEE’s manufacturing practices.

(a) In the event LESSOR shall receives any Information, LESSOR agrees to (i) immediately return to LESSEE any such Information, including, without limitation, any copies of the Information which may have been made, without retaining copies, summaries, extracts of information, analyses, reports or other documents that constitute Information and (ii) keep the knowledge of any Information in strict confidence and to not disclose, divulge or communicate, directly or indirectly, intentionally or inadvertently, Information to any person or entity. LESSOR shall not make any copies or reproduce the Information. Any Information obtained by LESSOR shall not confer any rights or interests in the Information to LESSOR or anyone else. All Information and any rights related thereto are and remain the exclusive and absolute property of LESSEE. This Lease does not constitute or create any duty or obligation on the part of LESSEE to provide any Information to LESSOR.

- 20 -

(b) If LESSOR or anyone else for whom LESSOR is liable breaches or attempts to breach the provisions of this Section 19.24, the injury to LESSEE may be irreparable and money damages may not be an adequate remedy. In such event, LESSEE shall be entitled, in addition to all remedies available at law or in equity, to obtain from any court of competent jurisdiction an injunction prohibiting LESSOR or such other person from any further breach or attempted breach of this Section 19.24.

19.25 Attorneys’ Fees. In any action or proceeding which either party brings against the other to enforce its rights hereunder, the non-prevailing party shall pay all costs incurred by the prevailing party, including reasonable attorneys’ fees, which amounts shall be a part of the judgment in said action or proceeding.

19.26 Entire Agreement. This Lease, including the Exhibits attached hereto, and the documents referred to herein, if any, constitute the entire agreement between LESSOR and LESSEE with respect to the leasing of the Premises, and shall not affect any prior or contemporaneous agreements, understandings, proposals and other representations between them.

- 21 -

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

APP PHARMACEUTICALS, LLC		ABRAXIS BIOSCIENCE, LLC
“LESSOR”		“LESSEE”
By:	/s/ Patrick Soon-Shiong	By:	/s/ Patrick Soon-Shiong
Name:	Patrick Soon-Shiong	Name:	Patrick Soon-Shiong
Title:	CEO	Title:	CEO

EX-10.24

Exhibit 10.24

CREDIT AGREEMENT

Dated as of November 13, 2007

among

APP PHARMACEUTICALS, INC.,

APP PHARMACEUTICALS, LLC,

as the U.S. Borrower,

ABRAXIS BIOSCIENCE MANUFACTURING, LLC,

(to be renamed APP PHARMACEUTICALS MANUFACTURING, LLC),

as the P.R. Borrower,

DEUTSCHE BANK AG NEW YORK BRANCH,

as Administrative Agent, Swing Line Lender and an L/C Issuer,

THE OTHER LENDERS PARTY HERETO,

and

DEUTSCHE BANK SECURITIES INC. and

WACHOVIA CAPITAL MARKETS, LLC,

as Joint Lead Arrangers and as Joint Bookrunners

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS		2
SECTION 1.01.	Defined Terms	2
SECTION 1.02.	Other Interpretive Provisions	51
SECTION 1.03.	Accounting Terms	51
SECTION 1.04.	Rounding	52
SECTION 1.05.	References to Agreements, Laws, Etc.	52
SECTION 1.06.	Times of Day	52
SECTION 1.07.	Timing of Payment of Performance	52
SECTION 1.08.	Currency Equivalents Generally	52
SECTION 1.09.	Change of Currency	53
ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS		53
SECTION 2.01.	The Loans	53
SECTION 2.02.	Borrowings, Conversions and Continuations of Loans	54
SECTION 2.03.	Letters of Credit	55
SECTION 2.04.	Swing Line Loans	64
SECTION 2.05.	Prepayments	67
SECTION 2.06.	Termination or Reduction of Commitments	71
SECTION 2.07.	Repayment of Loans	71
SECTION 2.08.	Interest	74
SECTION 2.09.	Fees	74
SECTION 2.10.	Computation of Interest and Fees	75
SECTION 2.11.	Evidence of Indebtedness	75
SECTION 2.12.	Payments Generally	76
SECTION 2.13.	Sharing of Payments	78
SECTION 2.14.	Incremental Credit Extensions	79
ARTICLE III TAXES, INCREASED COSTS PROTECTION AND ILLEGALITY		81
SECTION 3.01.	Taxes	81
SECTION 3.02.	Illegality	86
SECTION 3.03.	Inability to Determine Rates	86
SECTION 3.04.	Increased Cost and Reduced Return; Capital Adequacy;
	Reserves on Eurocurrency Rate Loans	86
SECTION 3.05.	Funding Losses	88
SECTION 3.06.	Matters Applicable to All Requests for Compensation	88
SECTION 3.07.	Replacement of Lenders under Certain Circumstances	89
SECTION 3.08.	Survival	90
ARTICLE IV CONDITIONS PRECEDENT TO CREDIT EXTENSIONS		90
SECTION 4.01.	Conditions of Initial Credit Extension	90

(i)

		Page
SECTION 4.02.	Conditions to All Credit Extensions	93
ARTICLE V REPRESENTATIONS AND WARRANTIES		94
SECTION 5.01.	Existence, Qualification and Power; Compliance with Laws	94
SECTION 5.02.	Authorization; No Contravention	94
SECTION 5.03.	Governmental Authorization; Other Consents	95
SECTION 5.04.	Binding Effect	95
SECTION 5.05.	Financial Statements; No Material Adverse Effect	95
SECTION 5.06.	Litigation	96
SECTION 5.07.	No Default	97
SECTION 5.08.	Ownership of Property; Liens	97
SECTION 5.09.	Environmental Compliance	97
SECTION 5.10.	Taxes	98
SECTION 5.11.	ERISA Compliance	98
SECTION 5.12.	Subsidiaries; Equity Interests	98
SECTION 5.13.	Margin Regulations; Investment Company Act	99
SECTION 5.14.	Disclosure	99
SECTION 5.15.	Intellectual Property; Licenses, Etc.	99
SECTION 5.16.	Solvency	100
SECTION 5.17.	Creation and Perfection of Security Interests	100
SECTION 5.18.	Labor Matters	100
ARTICLE VI AFFIRMATIVE COVENANTS		100
SECTION 6.01.	Financial Statements	100
SECTION 6.02.	Certificates; Other Information	101
SECTION 6.03.	Notices	103
SECTION 6.04.	Payment of Taxes	103
SECTION 6.05.	Preservation of Existence, Etc.	103
SECTION 6.06.	Maintenance of Properties	104
SECTION 6.07.	Maintenance of Insurance	104
SECTION 6.08.	Compliance with Laws	104
SECTION 6.09.	Books and Records	104
SECTION 6.10.	Inspection Rights	104
SECTION 6.11.	Covenant to Guarantee Obligations and Give Security	105
SECTION 6.12.	Compliance with Environmental Laws	107
SECTION 6.13.	Further Assurances and Post-Closing Conditions	107
SECTION 6.14.	Designation of Subsidiaries	108
SECTION 6.15.	Corporate Separateness	108
ARTICLE VII NEGATIVE COVENANTS		109
SECTION 7.01.	Liens	109
SECTION 7.02.	Investments	112

(ii)

		Page
SECTION 7.03.	Indebtedness	115
SECTION 7.04.	Fundamental Changes	118
SECTION 7.05.	Dispositions	119
SECTION 7.06.	Restricted Payments	121
SECTION 7.07.	Change in Nature of Business	123
SECTION 7.08.	Transactions with Affiliates	123
SECTION 7.09.	Burdensome Agreements	124
SECTION 7.10.	Use of Proceeds	124
SECTION 7.11.	Senior Secured Leverage Ratio	125
SECTION 7.12.	Accounting Changes	125
SECTION 7.13.	Prepayments, Etc. of Indebtedness	125
SECTION 7.14.	Equity Interests of the U.S. Borrower and Restricted Subsidiaries	126
SECTION 7.15.	Holding Company	126
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES		127
SECTION 8.01.	Events of Default	127
SECTION 8.02.	Remedies Upon Event of Default	129
SECTION 8.03.	Exclusion of Immaterial Subsidiaries	130
SECTION 8.04.	U.S. Borrower’s Right to Cure	130
ARTICLE IX ADMINISTRATIVE AGENT, OTHER AGENTS AND ARRANGERS		130
SECTION 9.01.	Appointment and Authorization of Agents and Arrangers	130
SECTION 9.02.	Delegation of Duties	131
SECTION 9.03.	Liability of Agents	132
SECTION 9.04.	Reliance by Agents	132
SECTION 9.05.	Notice of Default	133
SECTION 9.06.	Credit Decision; Disclosure of Information by Agents	133
SECTION 9.07.	Indemnification of Agents	133
SECTION 9.08.	Agents in their Individual Capacities	134
SECTION 9.09.	Successor Agents	134
SECTION 9.10.	Administrative Agent May File Proofs of Claim	135
SECTION 9.11.	Collateral and Guaranty Matters	136
SECTION 9.12.	Other Agents; Arrangers and Managers	136
SECTION 9.13.	Appointment of Supplemental Administrative Agents	137
ARTICLE X THE U.S. BORROWER GUARANTY		138
SECTION 10.01.	The U.S. Borrower Guaranty	138
SECTION 10.02.	Bankruptcy	138
SECTION 10.03.	Nature of Liability	138
SECTION 10.04.	Independent Obligation	139
SECTION 10.05.	Authorization	139
SECTION 10.06.	Reliance	140

(iii)

		Page
SECTION 10.07.	Subordination	140
SECTION 10.08.	Waiver	141
SECTION 10.09.	Payments	142
ARTICLE XI THE HOLDINGS GUARANTY		143
SECTION 11.01.	The Holdings Guaranty	143
SECTION 11.02.	Bankruptcy	143
SECTION 11.03.	Nature of Liability	143
SECTION 11.04.	Independent Obligation	144
SECTION 11.05.	Authorization	144
SECTION 11.06.	Reliance	145
SECTION 11.07.	Subordination	145
SECTION 11.08.	Waiver	146
SECTION 11.09.	Payments	147
ARTICLE XII MISCELLANEOUS		148
SECTION 12.01.	Amendments, Etc.	148
SECTION 12.02.	Notices and Other Communications; Facsimile Copies	150
SECTION 12.03.	No Waiver; Cumulative Remedies	151
SECTION 12.04.	Attorney Costs, Expenses and Taxes	151
SECTION 12.05.	Indemnification by the U.S. Borrower	151
SECTION 12.06.	Payments Set Aside	153
SECTION 12.07.	Successors and Assigns	153
SECTION 12.08.	Confidentiality	157
SECTION 12.09.	Setoff	158
SECTION 12.10.	Interest Rate Limitation	159
SECTION 12.11.	Counterparts	159
SECTION 12.12.	Integration	159
SECTION 12.13.	Survival of Representations and Warranties	159
SECTION 12.14.	Severability	160
SECTION 12.15.	GOVERNING LAW	160
SECTION 12.16.	WAIVER OF RIGHT TO TRIAL BY JURY	160
SECTION 12.17.	Binding Effect	161
SECTION 12.18.	Lender Action	161
SECTION 12.19.	USA PATRIOT Act	161

(iv)

SCHEDULES

1.01A	Mortgaged Properties
1.01B	Excluded Subsidiary
1.01C	Foreign Subsidiary
1.01D	Unrestricted Subsidiaries
2.01	Commitments
4.01	Certain Security Interests and Guarantees
5.05(a)(ii)-A	Derived Balance Sheets
5.05(a)(ii)-B	Derived Financial Statements
5.05(d)	Certain Liabilities
5.12	Subsidiaries and Other Equity Investments
7.01(b)	Existing Liens
7.02(f)	Existing Investments
7.03(b)	Existing Indebtedness
7.05(k)	Dispositions
7.08	Transactions with Affiliates
7.09	Existing Restrictions
12.02	Administrative Agent’s Office, Certain Addresses for Notices

EXHIBITS

Form of

A	Loan Notice
B	Swing Line Loan Notice
C-1	U.S. Tranche A Term Note
C-2	U.S. Tranche B Term Note
C-3	P.R. Term Note
C-4	Revolving Credit Note
C-5	Swing Line Note
D	Compliance Certificate
E	Assignment and Assumption
F-1	U.S. Subsidiary Guaranty
F-2	P.R. Subsidiary Guaranty
G-1	U.S. Security Agreement
G-2	P.R. Security Agreement
H	Solvency Certificate
I	Opinion Matters — Counsel to Loan Parties
J-1	U.S. Intellectual Property Security Agreement
J-2	P.R. Intellectual Property Security Agreement
K	Intercompany Subordination Agreement
L	Section 3.01(j) Certificate

(v)

CREDIT AGREEMENT

This CREDIT AGREEMENT (as amended, restated, supplemented and/or otherwise modified from time to time, this “Agreement”) is entered into as of November 13, 2007, among APP PHARMACEUTICALS, INC., a Delaware corporation (together with any successor thereto, “Holdings”), APP PHARMACEUTICALS, LLC, a Delaware limited liability company (together with any successor thereto, the “U.S. Borrower”), ABRAXIS BIOSCIENCE MANUFACTURING, LLC (to be renamed APP PHARMACEUTICALS MANUFACTURING, LLC, following the Spin-off) a Puerto Rico limited liability company (together with any successor thereto, the “P.R. Borrower” and, together with the U.S. Borrower, the “Borrowers”), DEUTSCHE BANK AG NEW YORK BRANCH, as Administrative Agent, Swing Line Lender and an L/C Issuer, each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), and DEUTSCHE BANK SECURITIES INC. and WACHOVIA CAPITAL MARKETS, LLC, as Joint Lead Arrangers and Joint Bookrunners.

PRELIMINARY STATEMENTS

Pursuant to the Separation Agreement (as this and other capitalized terms used in these preliminary statements are defined in Section 1.01 below), Abraxis BioScience, Inc., a Delaware corporation (“ABBI”), intends to consummate transactions resulting in (i) the establishment of Holdings as a holding company owned by ABBI, (ii) a spinoff (the “Spin-off”) by Holdings of all or substantially all of the “Abraxis BioScience” business (representing the combined operations known as Abraxis Oncology and Abraxis Research) (the “ABB Business”) of ABBI and its subsidiaries, and (iii) Holdings holding, after the Spin-off, directly through the U.S. Borrower and its Subsidiaries, all or substantially all of the “Abraxis Pharmaceutical Products” business (representing the hospital based operations) (the “APP Business”) of ABBI and its Subsidiaries.

The Borrowers have requested that simultaneously with the consummation of the Spin-off, the Lenders extend credit to the Borrowers in the form of (i) tranche “A” term loans to the U.S. Borrower in an aggregate principal amount of $565,000,000, (ii) tranche “B” term loans to the U.S. Borrower in an aggregate principal amount of $400,000,000, (iii) term loans to the P.R. Borrower in an aggregate principal amount of $35,000,000 and (iv) a revolving credit facility to the U.S. Borrower in an aggregate principal amount of $150,000,000.

The proceeds of the Term Loans will be used (i) to capitalize the ABB Business, (ii) to finance the Refinancing, (iii) to pay Transaction Expenses, and (iv) for the working capital and general corporate purposes of the U.S. Borrower and its Subsidiaries. The proceeds of Revolving Credit Loans made after the Closing Date will be used for working capital, capital expenditures and other general corporate purposes of the U.S. Borrower and its Subsidiaries, including the financing of Permitted Acquisitions. Swing Line Loans made and Letters of Credit issued after the Closing Date will be used for general corporate purposes of the U.S. Borrower and its Subsidiaries. Notwithstanding the preceding sentences of this paragraph, no proceeds of Revolving Credit Loans or Swing Line Loans will be used for the purposes described in clauses (i) through (iii) of the first sentence of this paragraph.

The applicable Lenders have indicated their willingness to lend, and the L/C Issuers have indicated their willingness to issue Letters of Credit, in each case, on the terms and subject to the conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I

Definitions and Accounting Terms

SECTION 1.01. Defined Terms.

As used in this Agreement, the following terms shall have the meanings set forth below:

“ABB Business” has the meaning specified in the preliminary statements to this Agreement.

“ABBI” has the meaning specified in the preliminary statements to this Agreement.

“Abraxis LLC” means Abraxis BioScience LLC, a Delaware limited liability company.

“Acquired EBITDA” means, with respect to any Acquired Entity or Business or any Converted Restricted Subsidiary for any period, the amount for such period of Consolidated EBITDA of such Acquired Entity or Business or Converted Restricted Subsidiary (determined as if references to Holdings, the U.S. Borrower and the Restricted Subsidiaries in the definition of Consolidated EBITDA (and in the component financial definitions used therein) were references to such Acquired Entity or Business or Converted Restricted Subsidiary and its Subsidiaries), all as determined on a consolidated basis for such Acquired Entity or Business or Converted Restricted Subsidiary.

“Acquired Entity or Business” has the meaning set forth in the definition of the term “Consolidated EBITDA”.

“Act” has the meaning set forth in Section 12.19.

“Additional Lender” has the meaning set forth in Section 2.14(a).

“Administrative Agent” means DBNY, in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent. Unless the context otherwise requires, the term “Administrative Agent” as used herein and in the other Loan Documents shall include the Collateral Agent.

-2-

“Administrative Agent’s Office” means the Administrative Agent’s address and account as set forth on Schedule 12.02, or such other address or account as the Administrative Agent may from time to time notify the Borrowers and the Lenders in writing.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Agent-Related Persons” means the Agents, together with their respective Affiliates, and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates.

“Agents” means, collectively, the Administrative Agent, the Collateral Agent, the Arrangers and the Supplemental Administrative Agents (if any).

“Aggregate Commitments” means, at any time, the Commitments of all the Lenders at such time.

“Agreement” has the meaning specified in the introductory paragraph to this Agreement.

“APP Business” has the meaning set forth in the preliminary statements to this Agreement.

“Applicable Increased Term Loan Rate” shall mean, at any time, with respect to any Incremental Term Loans made available pursuant to a given Incremental Amendment, the amount determined by the Administrative Agent (and notified to the Lenders) to which the Applicable Rate then in effect for each Type and Tranche of Term Loan theretofore incurred must be increased, if at all, such that the Applicable Rate for each such Type and Tranche of such then outstanding Term Loans is 0.50% per annum lower than the effective interest margin for each Type of such Incremental Term Loans then being incurred. It is understood and agreed that each determination of the “Applicable Increased Term Loan Margin” shall be made by the Administrative Agent taking into account the relevant factors outlined in the second proviso appearing in fourth sentence of Section 2.14(a) and shall be conclusive and binding on the U.S. Borrower and all Lenders absent manifest error.

“Applicable Rate” means a percentage per annum equal to, with respect to (w) U.S. Tranche B Term Loans maintained as (A) Eurocurrency Rate Loans, 2.50% (or, on and after the date of the most recent Incremental Facility Closing Date in respect of any Incremental Term Loans bearing interest utilizing the Applicable Increased Term Loan Rate, the Applicable Increased Term Loan Rate for such Incremental Term Loans) and (B) Base Rate Loans, 1.50% (or, on and after the date of the most recent Incremental Facility Closing Date in respect of any

-3-

Incremental Term Loans bearing interest utilizing the Applicable Increased Term Loan Rate, the Applicable Increased Term Loan Rate for such Incremental Term Loans), (x) U.S. Tranche A Term Loans, P.R. Term Loans, Revolving Credit Loans and Letter of Credit fees, (i) until delivery of financial statements for the first full fiscal quarter ending after the Closing Date pursuant to Section 6.01, (A) for U.S. Tranche A Term Loans and P.R. Term Loans maintained as Eurocurrency Rate Loans, 2.25% (or, on and after the date of the most recent Incremental Facility Closing Date in respect of any Incremental Term Loans bearing interest utilizing the Applicable Increased Term Loan Rate, the Applicable Increased Term Loan Rate for such Incremental Term Loans), (B) for U.S. Tranche A Term Loans and P.R. Term Loans maintained as Base Rate Loans, 1.25% (or, on and after the date of the most recent Incremental Facility Closing Date in respect of any Incremental Term Loans bearing interest utilizing the Applicable Increased Term Loan Rate, the Applicable Increased Term Loan Rate for such Incremental Term Loans), (C) for Revolving Credit Loans maintained as Eurocurrency Rate Loans, 2.35%, (D) for Revolving Credit Loans maintained as Base Rate Loans, 1.35% and (E) for Letter of Credit fees, 2.225% and (ii) thereafter, the percentages per annum set forth in the table below applicable to the respective Type of Revolving Credit Loans or Letter of Credit fees, as the case may be, based upon the Total Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(b):

Pricing Level	Total Leverage Ratio	Applicable Rate for U.S. Tranche A Term Loans and P.R. Term Loans maintained as Eurocurrency Rate Loans		Applicable Rate for U.S. Tranche A Term Loans and P.R. Term Loans maintained as Base Rate Loans		Applicable Rate for Revolving Credit Loans maintained as Eurocurrency Rate Loans		Applicable Rate for Revolving Credit Loans maintained as Base Rate Loans		Applicable Rate for Letter of Credit Fees
1	Less than 2.00:1.00	1.75	%	0.75	%	1.85	%	0.85	%	1.725	%
2	Greater than or equal to 2.00:1.00, but less than 3.00:1.00	2.00	%	1.00	%	2.10	%	1.10	%	1.975	%
3	Greater than or equal to 3.00:1.00	2.25	%	1.25	%	2.35	%	1.35	%	2.225	%

(y) unused Revolving Credit Commitments, 0.375% and (z) any Type of Incremental Term Loan of a given Tranche that is not a U.S. Tranche A Term Loan or a U.S. Tranche B Term Loan, that percentage per annum set forth in, or calculated in accordance with, Section 2.14 and the respective Incremental Amendment (or, on and after the date of the most recent Incremental Facility Closing Date in respect of any Incremental Term Loans bearing interest utilizing the Applicable Increased Term Loan Rate, the Applicable Increased Term Loan Rate for such Incremental Term Loans).

Any increase or decrease in the Applicable Rate resulting from a change in the Total Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b); provided that at the option of the

-4-

Administrative Agent or the Required Lenders, the highest Pricing Level shall apply (x) as of the first Business Day after the date on which a Compliance Certificate was required to have been delivered but was not delivered, and shall continue to so apply to and including the date on which such Compliance Certificate is so delivered (and thereafter the Pricing Level otherwise determined in accordance with this definition shall apply) and (y) as of the first Business Day after an Event of Default under Section 8.01(a) shall have occurred and be continuing, and shall continue to so apply to but excluding the date on which such Event of Default is cured or waived (and thereafter the Pricing Level otherwise determined in accordance with this definition shall apply).

Notwithstanding anything to the contrary contained above in the definition or elsewhere in this Agreement, if it is subsequently determined that the Total Leverage Ratio set forth in any Compliance Certificate delivered to the Administrative Agent is inaccurate for any reason and the result thereof is that the Lenders received interest or fees for any period based on an Applicable Rate that is less than that which would have been applicable had the Total Leverage Ratio been accurately determined, then, for all purposes of this Agreement, the “Applicable Rate” for any day occurring within the period covered by such Compliance Certificate shall retroactively be deemed to be the relevant percentage as based upon the accurately determined Total Leverage Ratio for such period, and any shortfall in the interest or fees theretofore paid by any Borrower for the relevant period pursuant to Sections 2.08 and 2.09 as a result of the miscalculation of the Total Leverage Ratio shall be deemed to be (and shall be) due and payable as of (i) the date on which the Administrative Agent notified the U.S. Borrower of such inaccuracy or (ii) if such inaccuracy was caused by willful misconduct or gross negligence by the U.S. Borrower, at the time the interest or fees for such period were required to be paid pursuant to Section 2.08 or 2.09 (and shall remain due and payable until paid in full, together with all amounts owing under Section 2.08, in accordance with the terms of this Agreement).

“Appropriate Lender” means, at any time, (a) with respect to Loans of any Class, the Lenders of such Class, (b) with respect to Letters of Credit, (i) the relevant L/C Issuers and (ii) with respect to any Letters of Credit issued pursuant to Section 2.03(a), the Revolving Credit Lenders and (c) with respect to the Swing Line Facility, (i) the Swing Line Lender and (ii) if any Swing Line Loans are outstanding pursuant to Section 2.04(a), the Revolving Credit Lenders.

“Approved Bank” has the meaning specified in clause (d) of the definition of “Cash Equivalents”.

“Approved Fund” means any Fund that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender.

“Arrangers” means DBSI and WCM each in its capacity as a joint lead arranger and a joint bookrunner under this Agreement.

“Assignees” has the meaning specified in Section 12.07(b).

-5-

“Assignment and Assumption” means an Assignment and Assumption substantially in the form of Exhibit E.

“Attorney Costs” means and includes all reasonable fees, expenses and disbursements of any law firm or other external legal counsel.

“Attributable Indebtedness” means, on any date, in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP.

“Audited Financial Statements” means the audited consolidated balance sheets of ABBI and its Subsidiaries as of each of December 31, 2006, 2005 and 2004, and the related audited consolidated statements of income, stockholders’ equity and cash flows for ABBI and its Subsidiaries for the fiscal years ended December 31, 2006, 2005 and 2004, respectively.

“Auto-Renewal Letter of Credit” has the meaning specified in Section 2.03(b)(iii).

“Available Amount” means, on any date (the “Reference Date”) an amount equal at such time to (a) the sum of, without duplication:

(i) $5,000,000;

(ii) an amount (which amount as calculated pursuant to this clause (i) shall not be less than zero) equal to the cumulative amount of Excess Cash Flow for all full fiscal years completed after the Closing Date (commencing with the fiscal year ending December 31, 2008) and prior to the Reference Date and Not Otherwise Applied;

(iii) the amount of any contributions of common equity to, or Permitted Equity Issuances by Holdings (in each case which are contributed as common equity to the U.S. Borrower) during the period from and including the Business Day immediately following the Closing Date through and including the Reference Date and Not Otherwise Applied; and

(iv) in the event any Unrestricted Subsidiary has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into any Borrower or any Restricted Subsidiary, the Fair Market Value of the Investments of the Borrower or any Subsidiary in such Unrestricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable), but in each case only to the extent such Investments were made pursuant to Section 7.02(n);

minus (b) the sum of:

(i) the aggregate amount of any Investments made by Holdings, the U.S. Borrower or any Restricted Subsidiary pursuant to Section 7.02(n) after the Closing Date and on or prior to the Reference Date;

-6-

(ii) the aggregate amount of prepayments, repayments, redemptions, purchases, defeasances or other satisfactions made by Holdings, the U.S. Borrower or any Restricted Subsidiary pursuant to Section 7.13(a)(iv) after the Closing Date and on or prior to the Reference Date; and

(iii) the aggregate amount of Restricted Payments made by Holdings or the Borrowers pursuant to Section 7.06(h) after the Closing Date and on or prior to the Reference Date.

“Available Amount Leverage Condition” means, with respect to the utilization of the Available Amount pursuant to Section 7.02(n), 7.13(a)(iv) or 7.06(i), that the Total Leverage Ratio calculated on a Pro Forma Basis shall be less than or equal to 4.50:1.00.

“Base Rate” means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by the Administrative Agent (or its designated Affiliate) as its “prime rate.” The “prime rate” is a rate set by the Administrative Agent (or such Affiliate) based upon various factors including the Administrative Agent’s (or such Affiliate’s) costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by the Administrative Agent (or such Affiliate) shall take effect at the opening of business on the day specified in the public announcement of such change.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

“Borrowers” has the meaning specified in the introductory paragraph to this Agreement.

“Borrowing” means a Revolving Credit Borrowing, a Swing Line Borrowing, a U.S. Term Borrowing or a P.R. Term Borrowing, as the context may require.

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in the State of New York, and if such day relates to any interest rate settings as to a Eurocurrency Rate Loan, any fundings, disbursements, settlements and payments in respect of any such Eurocurrency Rate Loan, or any other dealings to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means any such day on which dealings in deposits in Dollars are conducted by and between banks in the London interbank eurodollar market.

“Capital Expenditures” means, for any period, the aggregate of (a) all expenditures (whether paid in cash or accrued as liabilities) by the U.S. Borrower and the Restricted Subsidiaries during such period that, in conformity with GAAP, are or are required to be included as additions during such period to property, plant or equipment reflected in the consolidated balance sheet of the U.S. Borrower and the Restricted Subsidiaries, (b) all Capitalized Software Expenditures for such period and (c) all obligations under Capitalized Leases incurred by the U.S. Borrower and the Restricted Subsidiaries and recorded on the balance sheet in accordance with GAAP during such period; provided that the term “Capital Expenditures” shall not include (i) expenditures made in connection with the replacement,

-7-

substitution, restoration or repair of assets to the extent financed with (x) insurance proceeds paid on account of the loss of or damage to the assets being replaced, restored or repaired or (y) awards of compensation arising from the taking by eminent domain or condemnation of the assets being replaced, (ii) the purchase price of equipment that is purchased simultaneously with the trade-in of existing equipment to the extent that the gross amount of such purchase price is reduced by the credit granted by the seller of such equipment for the equipment being traded in at such time, (iii) the purchase of plant, property or equipment or software to the extent financed with the proceeds of Dispositions that are not required to be applied to prepay Term Loans pursuant to Section 2.05(b), (iv) expenditures that constitute any part of Consolidated Lease Expense, (v) expenditures that are accounted for as capital expenditures by the U.S. Borrower or any Restricted Subsidiary and that actually are paid for by a Person other than U.S. Borrower or any Restricted Subsidiary and for which neither the U.S. Borrower nor any Restricted Subsidiary has provided or is required to provide or incur, directly or indirectly, any consideration or obligation to such Person or any other Person (whether before, during or after such period), (vi) the book value of any asset owned by the U.S. Borrower or any Restricted Subsidiary prior to or during such period to the extent that such book value is included as a capital expenditure during such period as a result of such Person reusing or beginning to reuse such asset during such period without a corresponding expenditure actually having been made in such period, provided that (x) any expenditure necessary in order to permit such asset to be reused shall be included as a Capital Expenditure during the period in which such expenditure actually is made and (y) such book value shall have been included in Capital Expenditures when such asset was originally acquired, or (vii) expenditures that constitute Permitted Acquisitions.

“Capitalized Leases” means, as applied to any Person, all leases of property that have been or should be, in accordance with GAAP, recorded as capitalized leases on a balance sheet (excluding the footnotes thereto) of such Person; provided that for all purposes hereunder the amount of obligations under any Capitalized Lease shall be the amount thereof accounted for as a liability on a balance sheet (excluding the footnotes thereto) of such Person in accordance with GAAP.

“Capitalized Software Expenditures” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by the U.S. Borrower and the Restricted Subsidiaries during such period in respect of purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of the U.S. Borrower and the Restricted Subsidiaries.

“Cash Collateral” has the meaning specified in Section 2.03(g).

“Cash Collateral Account” means a blocked account at DBNY (or another commercial bank selected in compliance with Section 9.09) in the name of the Administrative Agent and under the sole dominion and control of the Administrative Agent, and otherwise established in a manner reasonably satisfactory to the Administrative Agent.

“Cash Collateralize” has the meaning specified in Section 2.03(g).

-8-

“Cash Equivalents” means any of the following types of Investments, to the extent owned by the U.S. Borrower or any Restricted Subsidiary:

(a) Dollars, Canadian Dollars, Euros, Pounds Sterling or, in the case of any Foreign Subsidiary, such local currencies held by it from time to time in the ordinary course of business;

(b) readily marketable obligations issued or directly and fully guaranteed or insured by the United States government having average maturities of not more than 12 months from the date of acquisition thereof; provided that the full faith and credit of the United States is pledged in support thereof;

(c) readily marketable obligations issued or directly and fully guaranteed by any agency or instrumentality of the United States or any corporation operating pursuant to a federal charter, including but not limited to Freddie Mac, Federal Home Loan Bank, Fannie Mae, Federal Farm Credit Bank, and the Tennessee Valley Authority having average maturity of not more than 12 months from the date of acquisition thereof;

(d) time deposits with, or insured certificates of deposit or bankers’ acceptances of, any commercial bank that (i) is a Lender or (ii) (A) is organized under the Laws of the United States, any state thereof, the District of Columbia or any member nation of the Organization for Economic Cooperation and Development or is the principal banking Subsidiary of a bank holding company organized under the Laws of the United States, any state thereof, the District of Columbia or any member nation of the Organization for Economic Cooperation and Development, and is a member of the Federal Reserve System, and (B) has combined capital and surplus of at least $500,000,000 (any such bank in the foregoing clauses (i) or (ii) being an “Approved Bank”), in each case with maximum maturities of not more than 12 months from the date of acquisition thereof and a weighted average maturity of not more than 9 months from the date of the acquisition thereof;

(e) commercial paper and variable or fixed rate notes issued by an Approved Bank (or by the parent company thereof) or any variable or fixed rate note issued by, or guaranteed by, a Person rated A-2 (or the equivalent thereof) or better by S&P, P-2 (or the equivalent thereof) or better by Moody’s or F-2 (or the equivalent thereof) or better by Fitch (or, if at any time none of S&P, Moody’s or Fitch shall be providing a short term rating on such obligations, then an equivalent rating from any of these or any other nationally recognized rating service), in each case with maximum maturities of not more than 12 months from the date of acquisition thereof, and a weighted average maturity of not more than 9 months from the date of the acquisition thereof;

(f) repurchase obligations for underlying securities of the types described in (b), (c), (d) and (e) above entered into with any Approved Bank or recognized securities dealer having capital and surplus in excess of $500,000,000;

(g) securities with maximum maturities of not more than 12 months from the date of acquisition and a weighted average maturity of not more than 9 months from the

-9-

date of the acquisition thereof issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government having an investment grade rating from either S&P, Moody’s or Fitch (or, if at any time none of S&P, Moody’s or Fitch shall be rating such obligations, then an equivalent rating from any of these or any other nationally recognized rating service);

(h) marketable short-term money market and similar securities with average maturities or resets of 12 months or less from the date of acquisition having a rating of at least A-2, P-2 or F-2 from either S&P, Moody’s or Fitch, respectively, (or, if at any time none of S&P, Moody’s or Fitch shall be providing a short term rating on such obligations, then an equivalent rating from any of these or any other nationally recognized rating service);

(i) Investments, classified in accordance with GAAP as current assets of the U.S. Borrower or any Restricted Subsidiary, in money market investment programs which are registered under the Investment Company Act of 1940 or which are administered by financial institutions having capital of at least $500,000,000, and, in either case, the portfolios of which are limited such that substantially all of such investments are of the character, quality and maturity described in clauses (a) through (h) of this definition;

(j) auction rate securities which carry a “AAA” rating by S&P, Moody’s or Fitch and whose reset dates are no longer than 90 days from date of acquisition or prior reset; and

(k) in the case of a Foreign Subsidiary, substantially similar investments of the type described above denominated in foreign currencies and from similarly capitalized and rated foreign banks in the jurisdiction in which such Foreign Subsidiary is organized.

“Cash Management Bank” means any Person that is a Lender or an Affiliate of a Lender at the time it provides any Cash Management Services and such Person’s successors and permitted assigns.

“Cash Management Obligations” means obligations owed by Holdings, the U.S. Borrower or any Restricted Subsidiary to any Cash Management Bank in connection with, or in respect of, any Cash Management Services.

“Cash Management Services” means treasury, depository and cash management services and any automated clearing house fund transfer services.

“Casualty Event” means any event that gives rise to the receipt by Holdings, the U.S. Borrower or any Restricted Subsidiary of any insurance proceeds or condemnation awards in respect of any assets or property to replace such assets or property.

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as subsequently amended.

-10-

“CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the U.S. Environmental Protection Agency.

“Change of Control” means the earliest to occur of (a) the Permitted Holders ceasing to have the power, directly or indirectly, to vote or direct the voting of securities having a majority of the ordinary voting power for the election of directors of Holdings; (b) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person and its Subsidiaries, and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), excluding the Permitted Holders, shall become the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under such Act), directly or indirectly, of more than forty-five percent (45%) of the shares outstanding of Holdings; (c) Continuing Directors shall cease to constitute a majority of the board of directors of Holdings; (d) any “Change of Control” (or any comparable term) in any document pertaining to any Third Party Financing with an aggregate outstanding principal amount in excess of the Threshold Amount, except to the extent that such “Change of Control” (or comparable term) does not constitute a default or event of default under any such document and at the time of the occurrence of such event and at all times thereafter the U.S. Borrower or its respective Restricted Subsidiary would be able to redeem, prepay and/or otherwise satisfy 100% of the principal amount of all outstanding Indebtedness under or evidenced by such document, plus all accrued and unpaid interest, premium and fees with respect thereto, in compliance with the provisions of Section 7.13(a); (e) the U.S. Borrower ceasing to be a directly or indirectly wholly owned Subsidiary of Holdings; or (f) the P.R. Borrower ceasing to be directly or indirectly wholly owned Subsidiary of the U.S. Borrower.

“Class” (a) when used with respect to Lenders, refers to whether such Lenders are Revolving Credit Lenders, U.S. Tranche A Term Lenders, U.S. Tranche B Term Lenders or P.R. Term Lenders, (b) when used with respect to Commitments, refers to whether such Commitments are Revolving Credit Commitments, U.S. Tranche A Term Commitments, U.S. Tranche B Term Commitments or P.R. Term Commitments and (c) when used with respect to Loans or a Borrowing, refers to whether such Loans, or the Loans comprising such Borrowing, are Revolving Credit Loans, U.S. Tranche A Term Loans, U.S. Tranche B Term Loans or P.R. Term Loans.

“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 4.01.

“Closing Date Material Adverse Effect” means any effect, change, circumstance or development that, individually or in the aggregate with other such effects, changes, circumstances or developments is both material and adverse to the business, financial condition operations, results of operations, properties, assets or liabilities constituting the APP Business taken as a whole, other than any effect, change, circumstance or development resulting from an Excluded Matter.

“Code” means the U.S. Internal Revenue Code of 1986, as amended, and rules and regulations related thereto.

-11-

“Collateral” means all the “Collateral” as defined in any Collateral Document and shall include the Mortgaged Properties.

“Collateral Agent” means DBNY, in its capacity as collateral agent under any of the Loan Documents, or any successor collateral agent.

“Collateral and Guarantee Requirement” means, at any time, the requirement that, subject to any applicable limitations set forth herein or in any Collateral Document:

(a) the Administrative Agent shall have received each Collateral Document required to be delivered on the Closing Date pursuant to Section 4.01(a)(iii), 6.11 or 6.13 at such time, duly executed by each Loan Party thereto;

(b)(i) all Obligations shall have been unconditionally guaranteed by Holdings, the U.S. Borrower (in the case of Obligations under clauses (x) (to the extent incurred by the P.R. Borrower), (y) and (z) of the first sentence of the definition thereof) and each Restricted Subsidiary that is a Domestic Subsidiary and not an Excluded Subsidiary and (ii) all Obligations of the P.R. Borrower shall have been unconditionally guaranteed by each Restricted Subsidiary that is a Subsidiary of the P.R. Borrower and not an Excluded Subsidiary (other than an Excluded Subsidiary of the type described in clause (d) of the definition thereof);

(c) the Obligations and the Guarantees shall have been secured by a first-priority security interest in (i) all the Equity Interests of the U.S. Borrower, (ii) all of the Equity Interests of each Subsidiary directly owned by the U.S. Borrower (including the P.R. Borrower) or any Guarantor (other than the Equity Interests of any Unrestricted Subsidiary); provided that pledges of Equity Interests of each Foreign Subsidiary (except to the extent securing (directly or indirectly) the Obligations of the P.R. Borrower) shall be limited to 65% of the issued and outstanding Equity Interests of such Foreign Subsidiary at any time and (iii) 65% of the issued and outstanding Equity Interests of any Foreign Subsidiary the Equity Interests of which have been transferred to any domestic subsidiary directly or indirectly owned by the U.S. Borrower substantially all the assets of which consist of securities of one or more Foreign Subsidiaries, Indebtedness issued by such Foreign Subsidiaries (or Subsidiaries thereof), and other assets relating to an ownership interest in any such securities, Indebtedness or Subsidiaries;

(d) except to the extent otherwise permitted hereunder or under any Collateral Document, the Obligations and the Guarantees shall have been secured by a security interest in, and mortgages on, substantially all tangible and intangible assets of Holdings, the U.S. Borrower, each other Guarantor and, in the case of the Obligations of the P.R. Borrower, the P.R. Borrower (including (in each case) accounts (other than bank deposit accounts and securities accounts), inventory, equipment, investment property, contract rights, intellectual property, other general intangibles, owned (but not leased) real property and proceeds of the foregoing), in each case, with the priority required by the Collateral Documents; provided that security interests in real property shall be limited to the Mortgaged Properties;

-12-

(e) none of the Collateral shall be subject to any Liens other than Liens permitted by Section 7.01; and

(f) the Collateral Agent shall have received (i) counterparts of a Mortgage with respect to each owned property located in the United States or in a state or territory thereof (including Puerto Rico) described on Schedule 1.01A hereto or required to be delivered pursuant to Section 6.11 (the “Mortgaged Properties”) duly executed and delivered by the record owner of such property, (ii) a policy or policies of title insurance issued by a nationally recognized title insurance company insuring the Lien of each such Mortgage as a valid first priority Lien (subject to prior Liens permitted by Section 7.01) on the property described therein, free of any other Liens except as expressly permitted by Section 7.01, together with such endorsements, coinsurance and reinsurance as the Administrative Agent may reasonably request, (iii) such existing surveys, existing abstracts, existing appraisals, customary legal opinions and other customary documents as the Administrative Agent may reasonably request with respect to any such Mortgaged Property and (iv) flood certificates covering each Mortgaged Property in form and substance acceptable to the Collateral Agent, certified to the Collateral Agent in its capacity as such and certifying whether or not each such Mortgaged Property is located in a flood hazard zone by reference to the applicable FEMA map.

The foregoing definition shall not require the creation or perfection of pledges of or security interests in, or the obtaining of title insurance or surveys with respect to, particular assets if and for so long as, in the reasonable judgment of the Collateral Agent (confirmed in writing by notice to the U.S. Borrower), the cost of creating or perfecting such pledges or security interests in such assets or obtaining title insurance or surveys in respect of such assets shall be excessive in view of the benefits to be obtained by the Lenders therefrom. The Collateral Agent may grant extensions of time for the perfection of security interests in or the obtaining of title insurance with respect to particular assets (including extensions beyond the Closing Date for the perfection of security interests in the assets of the Loan Parties on such date) where it reasonably determines, in consultation with the U.S. Borrower, that perfection cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required by this Agreement or the Collateral Documents.

Notwithstanding the foregoing provisions of this definition or anything in this Agreement or any other Loan Document to the contrary, Liens required to be granted from time to time pursuant to the Collateral and Guarantee Requirement shall be subject to exceptions and limitations set forth in the Collateral Documents as in effect on the Closing Date and, to the extent appropriate in the applicable jurisdiction, as agreed between the Collateral Agent and the U.S. Borrower.

“Collateral Documents” means, collectively, the Security Agreements, the Intellectual Property Security Agreements, the Mortgages, each of the mortgages, collateral assignments, Security Agreement Supplements, security agreements, pledge agreements or other similar agreements delivered to the Collateral Agent and the Lenders pursuant to Section 6.11 or Section 6.13 and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Collateral Agent for the benefit of the Secured Parties, an L/C Issuer for its benefit or the Administrative Agent for the benefit of the L/C Issuer and any Lenders.

-13-

“Commitment” means a U.S. Term Commitment, a P.R. Term Commitment or a Revolving Credit Commitment, as the context may require.

“Compensation Period” has the meaning specified in Section 2.12(c)(ii).

“Compliance Certificate” means a certificate substantially in the form of Exhibit D.

“Consolidated EBITDA” means, for any period, the Consolidated Net Income for such period, plus:

(a) without duplication and to the extent already deducted (and not added back) in arriving at such Consolidated Net Income, the sum of the following amounts for such period:

(i) total interest expense and, to the extent not reflected in such total interest expense, any losses on hedging obligations or other derivative instruments entered into for the purpose of hedging interest rate risk, net of interest income and gains on such hedging obligations, and costs of surety bonds in connection with financing activities,

(ii) provision for taxes based on income, profits or capital of the U.S. Borrower and the Restricted Subsidiaries, including state, franchise and similar taxes and foreign withholding taxes paid or accrued during such period,

(iii) depreciation and amortization (including amortization of Capitalized Software Expenditures and amortization of deferred financing fees),

(iv) Non-Cash Charges,

(v) (x) extraordinary, unusual or non-recurring expenses or losses and (y) restructuring costs, integration costs, stock option and other equity-based compensation expenses, operational changes (including, to the extent applicable, from the Transactions), transaction fees and expenses and management fees and expenses, including, without limitation, any one time expense relating to enhanced business function or other transaction costs, including those associated with becoming a standalone entity or a public company, (it being understood that such adjustments and additions pursuant to this clause (v) may be incremental to (though not duplicative of) any Pro Forma Adjustments included in Consolidated EBITDA for such period as a result of the application of clause (C) of the proviso following clause (b) below),

(vi) any deductions attributable to minority interests,

-14-

(vii) any costs or expenses (excluding Non-Cash Charges) incurred by Holdings, any Borrower or a Restricted Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of Holdings or the U.S. Borrower or net cash proceeds of an issuance of Equity Interests of Holdings or the U.S. Borrower (in each case, other than Disqualified Equity Interests),

(viii) losses on asset sales (other than ordinary course asset sales),

(ix) to the extent (1) covered by insurance under which the insurer has been properly notified and has not denied coverage in writing, expenses with respect to liability or casualty events or business interruption, and (2) actually reimbursed in cash, expenses incurred to the extent covered by indemnification provisions in any agreement in connection with a Permitted Acquisition,

(x) any non-cash increase in expenses (a) resulting from the revaluation of inventory (including any impact of changes to inventory valuation policy methods including changes in capitalization of variances) and any other one time non-cash charges resulting due to any change in accounting policy, (b) due to purchase accounting associated with the Transaction or (c) resulting from any amortization relating to product rights or asset purchases,

(xi) letter of credit fees and commitment fees, and

(xii) research and development expenses relating to the build-out of new facilities in Puerto Rico and Grand Island, New York and costs incurred to transfer production to or start-up new facilities in Puerto Rico and New York, including costs incurred to ready such facilities for use and costs, such as unfavorable manufacturing variances, incurred prior to achieving planned production levels, provided that the aggregate amount of all such expenses and costs added back pursuant to this clause (xiii) shall not exceed $25,000,000, $17,500,000 and $15,000,000 during Holdings’ fiscal years ending December 31, 2007, 2008 and 2009, respectively, less

(b) without duplication and to the extent included in arriving at such Consolidated Net Income, the sum of the following amounts for such period:

(i) extraordinary and unusual or non-recurring cash gains,

(ii) non-cash gains (excluding any non-cash gain to the extent it represents the reversal of an accrual or reserve for a potential cash item that reduced Consolidated Net Income in any prior period),

(iii) gains on asset sales (other than asset sales in the ordinary course of business),

-15-

(iv) any net after-tax income from the early extinguishment of Indebtedness or hedging obligations or other derivative instruments, and

(v) all one-time gains from investments recorded using the equity method,

in each case, as determined on a consolidated basis for Holdings, the Borrowers and the Restricted Subsidiaries in accordance with GAAP; provided that, to the extent included in Consolidated Net Income,

(A) there shall be excluded in determining Consolidated EBITDA currency translation gains and losses related to currency remeasurements of Indebtedness (including the net loss or gain resulting from Swap Contracts for currency exchange risk),

(B) there shall be excluded in determining Consolidated EBITDA for any period any adjustments resulting from the application of Statement of Financial Accounting Standards No. 133,

(C) there shall be included in determining Consolidated EBITDA for any period, without duplication, (i) the Acquired EBITDA of any Person, property, business or asset acquired by any Borrower or any Restricted Subsidiary during such period but not the Acquired EBITDA of any related Person, property, business or assets to the extent not so acquired), to the extent not subsequently sold, transferred or otherwise disposed by any Borrower or such Restricted Subsidiary (each such Person, property, business or asset acquired and not subsequently so disposed of, an “Acquired Entity or Business”), and the Acquired EBITDA of any Unrestricted Subsidiary that is converted into a Restricted Subsidiary (each, a “Converted Restricted Subsidiary”), in each case, based on the actual Acquired EBITDA of such Acquired Entity or Business or Converted Restricted Subsidiary for such period (including the portion thereof occurring prior to such acquisition or conversion) and (ii) for the purposes of the definition of the term “Permitted Acquisition” and Sections 7.02(i)(D), 7.02(n), 7.03(g), 7.04, 7.06(h) and 7.13(a), an adjustment in respect of each Acquired Entity or Business or Converted Restricted Subsidiary equal to the amount of the Pro Forma Adjustment with respect to such Acquired Entity or Business or Converted Restricted Subsidiary for such period (including the portion thereof occurring prior to such acquisition) as specified in a certificate executed by a Responsible Officer and delivered to the Administrative Agent (for further delivery to the Lenders), and

(D) for purposes of determining the Total Leverage Ratio the Senior Secured Leverage Ratio or Consolidated EBITDA, there shall be excluded in determining Consolidated EBITDA for any period the Disposed EBITDA of any Person, property, business or asset sold, transferred or otherwise disposed of, closed or classified as discontinued operations by Holdings or any Restricted Subsidiary during such period (each such Person, property, business or asset so

-16-

sold, transferred or disposed of or so classified as discontinued operations, a “Sold Entity or Business”), based on the actual Disposed EBITDA of such Sold Entity or Business for such period (including the portion thereof occurring prior to such sale, transfer, disposition or classification).

For the purpose of the definition of Consolidated EBITDA, “Non-Cash Charges” means (a) non-cash losses on asset sales, disposals or abandonments, (b) any non-cash impairment charge or asset write-off related to intangible assets, long-lived assets, and investments in debt and equity securities pursuant to GAAP, (c) all non-cash losses from investments recorded using the equity method, (d) non-cash stock-based awards compensation expense, (e) non-cash expenses relating to the vesting of warrants and (f) other non-cash charges (provided that if any non-cash charges referred to in this clause (f) represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated EBITDA to such extent, and excluding amortization of a prepaid cash item that was paid in a prior period).

For purpose of any Test Period that requires utilizing a number for Consolidated EBITDA, for the first three (3) fiscal quarters of 2007, Consolidated EBITDA for all purposes under this Agreement shall be $52,693,000 for the first fiscal quarter of 2007, $65,892,000 for the second fiscal quarter of 2007 and $53,015,000 for the third fiscal quarter of 2007.

“Consolidated Lease Expense” means, for any period, all rental expenses of Holdings and the Restricted Subsidiaries during such period under operating leases for real or personal property (including in connection with sale-leaseback transactions permitted by Section 7.05(f)), excluding real estate taxes, personal property taxes, insurance costs and common area maintenance charges and net of sublease income, other than (a) obligations under vehicle leases entered into in the ordinary course of business, (b) all such rental expenses associated with assets acquired pursuant to a Permitted Acquisition to the extent such rental expenses relate to operating leases in effect at the time of (and immediately prior to) such acquisition and related to periods prior to such acquisition and (c) all obligations under Capitalized Leases, all as determined on a consolidated basis in accordance with GAAP.

“Consolidated Net Income” means, for any period, the net income (loss) of Holdings and its Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, excluding, without duplication, (a) extraordinary items for such period, (b) the cumulative effect of a change in accounting principles during such period to the extent included in Consolidated Net Income, (c) in the case of any period that includes a period ending prior to or during the fiscal quarter ending June 30, 2008, Transaction Expenses, (d) accruals, payments and expenses (including rationalization, legal, tax, structuring and other costs and expenses) incurred during such period in connection with any acquisition, investment, asset disposition, issuance of debt or issuance of equity securities, (e) any income (loss) for such period attributable to the early extinguishment of Indebtedness, Swap Contracts or other derivative instruments and (f) accruals and reserves that are established within twelve months after the Closing Date that are so required to be established as a result of the Transaction in accordance with GAAP. There shall be excluded from Consolidated Net Income for any period the purchase accounting effects of adjustments to property and equipment, software and other intangible assets and deferred revenue in component amounts required or permitted by GAAP

-17-

and related authoritative pronouncements (including the effects of such adjustments pushed down to Holdings, the U.S. Borrower and the Restricted Subsidiaries), as a result of the Transaction, any acquisition consummated prior to the Closing Date, any Permitted Acquisitions, or the amortization or write-off of any amounts thereof.

“Consolidated Total Assets” means, as of any date of determination, the total amount of all assets of Holdings and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP as of such date.

“Consolidated Total Debt” means, as of any date of determination, (a) the aggregate principal amount of indebtedness of Holdings and the Restricted Subsidiaries outstanding on such date, determined on a consolidated basis in accordance with GAAP (but excluding the effects of any discounting of indebtedness resulting from the application of purchase accounting in connection with the Transaction or any Permitted Acquisition), consisting of indebtedness for borrowed money, obligations in respect of Capitalized Leases and debt obligations evidenced by promissory notes or similar instruments, minus (b) the aggregate amount of Unrestricted cash and Cash Equivalents.

“Consolidated Working Capital” means, at any date, the excess of (a) the sum of all amounts (other than cash and Cash Equivalents) that would, in conformity with GAAP, be set forth opposite the caption “total current assets” (or any like caption) on a consolidated balance sheet of Holdings and the Restricted Subsidiaries at such date over (b) the sum of all amounts that would, in conformity with GAAP, be set forth opposite the caption “total current liabilities” (or any like caption) on a consolidated balance sheet of the U.S. Borrower and the Restricted Subsidiaries on such date, including any deferred revenue classified as long-term on any such consolidated balance sheet, but excluding, without duplication, (i) the current portion of any Funded Debt, (ii) all Indebtedness consisting of Loans and L/C Obligations to the extent otherwise included therein, (iii) the current portion of interest and (iv) the current portion of current and deferred income taxes.

“Continuing Directors” means the directors of Holdings on the Closing Date, as elected or appointed after giving effect to the Spin-off and the other transactions contemplated hereby, and each other director, if, in each case, such other directors’ nomination for election to the board of directors of Holdings is recommended by a majority of the then Continuing Directors or such other director receives the vote of the Permitted Holders in his or her election by the stockholders of Holdings.

“Contract Consideration” has the meaning set forth in the definition of “Excess Cash Flow”.

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Control” has the meaning specified in the definition of “Affiliate”.

“Converted Restricted Subsidiary” has the meaning specified in the definition of “Consolidated EBITDA”.

-18-

“Credit Agreement Party” means each of Holdings, the U.S. Borrower and the P.R. Borrower.

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.

“DBNY” means Deutsche Bank AG New York Branch, in its individual capacity and any successor thereto by merger, consolidation or otherwise.

“DBSI” means Deutsche Bank Securities Inc., in its individual capacity and any successor thereto by merger, consolidation or otherwise.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

“Default Rate” means an interest rate equal to (a) the Base Rate plus (b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2.0% per annum; provided that with respect to a Eurocurrency Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2.0% per annum, in each case, to the fullest extent permitted by applicable Laws.

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of the Term Loans, Revolving Credit Loans, participations in L/C Obligations or participations in Swing Line Loans required to be funded by it hereunder within one (1) Business Day of the date required to be funded by it hereunder, unless the subject of a good faith dispute or subsequently cured (or, for purposes of Sections 2.03(a)(ii)(F) and 2.04(a) only, on the date required to be funded by it hereunder), (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one (1) Business Day of the date when due, unless the subject of a good faith dispute or subsequently cured (or, for purposes of Sections 2.03(a)(ii)(F) and 2.04(a) only, on the date when due), (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding or (d) has notified the Borrowers and/or the Administrative Agent in writing of any of the foregoing (including any written notification of its intent not to comply with its obligations under Article 2).

“Derived Balance Sheet” has the meaning set forth in Section 5.05(a)(ii).

“Derived Financial Statements” has the meaning set forth in Section 5.05(a)(ii).

“Disposed EBITDA” means, with respect to any Sold Entity or Business for any period, the amount for such period of Consolidated EBITDA (and the component financial definitions used therein) of such Sold Entity or Business (determined as if references to the U.S. Borrower and the Restricted Subsidiaries in the definition of Consolidated EBITDA were references to such Sold Entity or Business and its Subsidiaries), all as determined on a consolidated basis for such Sold Entity or Business.

-19-

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction and any sale of Equity Interests) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith; provided that “Disposition” and “Dispose” shall not be deemed to include any issuance by Holdings of any of its Equity Interests to another Person.

“Disqualified Equity Interests” means any Equity Interest which, by its terms (or by the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale, so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (b) is redeemable at the option of the holder thereof, in whole or in part (other than solely for Qualified Equity Interests and other than as a result of a change of control or asset sale, so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (c) provides for the scheduled payments of dividends in cash, or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is ninety-one (91) days after the Maturity Date of the Term Loans; provided that if such Equity Interests are issued to a plan for the benefit of employees of Holdings, the U.S. Borrower or its Subsidiaries or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Equity Interests solely because it may be required to be repurchased by Holdings, the U.S. Borrower or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

“Disqualified Institution” means any (i) bank, financial institution or other Person designated by the U.S. Borrower to the Administrative Agent in writing prior to the date hereof, (ii) business competitor of the U.S. Borrower (it being understood and agreed that such reference to “business competitor” shall not include Affiliates (other than Subsidiaries) of such business competitor entities if such Affiliates are not direct business competitors and engage in investing in loans or extensions of credit similar to the Loans), (iii) an Affiliate of any Lender that is engaged as a principal primarily in private equity, mezzanine finance (unless the relevant mezzanine finance Affiliate agrees to keep any such information confidential in accordance with the provisions of Section 12.08, in which case, such Affiliate shall be deemed not be a Disqualified Institution for the purposes hereof) or venture capital or (iv) any institution (x) engaged primarily in private equity investments which does not engage in investing in loans or extensions of credit similar to the Loans or (y) engaged primarily in venture capital investments.

“Dollar” and “$” mean lawful money of the United States.

-20-

“Domestic Restricted Subsidiary” means any Restricted Subsidiary that is organized under the laws of the United States, any state thereof or the District of Columbia, except any Restricted Subsidiary substantially all the assets of which consist of securities of one or more Foreign Subsidiaries, Indebtedness issued by such Foreign Subsidiaries (or Subsidiaries thereof), and other assets relating to an ownership interest in any such securities, Indebtedness or Subsidiaries.

“Domestic Subsidiary” means any Subsidiary that is organized under the Laws of the United States, any state thereof or the District of Columbia, except any domestic Subsidiary substantially all the assets of which consist of securities of one or more Foreign Subsidiaries, Indebtedness issued by such Foreign Subsidiaries (or Subsidiaries thereof), and other assets relating to an ownership interest in any such securities, Indebtedness or Subsidiaries.

“Eligible Assignee” means any Assignee permitted by and consented to in accordance with Section 12.07(b).

“Employee Matters Agreement” means the Employee Matters Agreement, dated as of November 13, 2007, by and among Holdings, the U.S. Borrower, Abraxis, LLC and New Abraxis, Inc., a Delaware corporation to be renamed Abraxis BioScience, Inc, as such Employee Matters Agreement is in effect on the Closing Date.

“Environmental Laws” means any and all applicable Federal, state, Commonwealth of Puerto Rico, local, and foreign statutes, Laws, treaties, conventions, regulations, ordinances, codes, rules, judgments, legally-binding governmental policies, orders, decrees, Environmental Permits, or principles of common law, now or hereafter in effect, or any agreement or consent decree entered into with any Governmental Authority and any judicial or administrative interpretation thereof, relating to the environment, natural resources, Hazardous Materials or human health and safety (to the extent related to exposure to Hazardous Materials), applicable to any Loan Party or any of its Subsidiaries or their respective operations or assets or any Mortgaged Properties owned, leased or operated by any Loan Party or any of its Subsidiaries.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental investigations, corrective actions or remediation, fines, penalties or indemnities), of the U.S. Borrower, the P.R. Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Environmental Permit” means any permit, approval, identification number, license, consent or other authorization required under any Environmental Law.

“Equity Interests” means, with respect to any Person, all of the shares, interests, rights, participations or other equivalents (however designated) of capital stock of (or other

-21-

ownership or profit interests or units in) such Person and all of the warrants, options or other rights for the purchase, acquisition or exchange from such Person of any of the foregoing (including through convertible securities).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time and the regulations promulgated and the rulings issued thereunder.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that is under common control with any Loan Party within the meaning of Section 414 of the Code or Section 4001 of ERISA.

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by any Loan Party or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by any Loan Party or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party or any ERISA Affiliate; (g) the failure of any Pension Plan to satisfy the minimum funding standard required for any plan year or part thereof under Section 412 of the Code or Section 302 of ERISA or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 of the Code or Section 303 or 304 of ERISA; or (h) the existence of an Unfunded Current Liability with respect to a Pension Plan.

“Eurocurrency Rate” means (a) the offered quotation to first-class banks in the New York interbank Eurodollar market by the Administrative Agent for Dollar deposits of amounts in immediately available funds comparable to the outstanding principal amount of the Eurocurrency Rate Loan of the Administrative Agent (in its capacity as a Lender) (or, if the Administrative Agent is not a Lender with respect thereto, taking the average principal amount of the Eurocurrency Rate Loan then being made by the various Lenders pursuant thereto)) with maturities comparable to the Interest Period applicable to such Eurocurrency Rate Loan commencing two Business Days thereafter as of 10:00 A.M. (New York City time) on the applicable date of determination, divided (and rounded upward to the nearest 1/16 of 1%) by (b) a percentage equal to 100% minus the then stated maximum rate of all reserve requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves required by applicable law) applicable to any member bank of the Federal Reserve System in respect of Eurocurrency funding or liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D).

“Eurocurrency Rate Loan” means a Loan that bears interest at a rate based on the Eurocurrency Rate.

-22-

“Event of Default” has the meaning specified in Section 8.01.

“Excess Cash Flow” means, for any period, an amount equal to the excess of:

(a) the sum, without duplication, of:

(i) Consolidated Net Income for such period,

(ii) an amount equal to the amount of all non-cash charges during such period, to the extent deducted in arriving at such Consolidated Net Income,

(iii) decreases in Consolidated Working Capital and long-term account receivables for such period (other than any such decreases arising from acquisitions by the U.S. Borrower and the Restricted Subsidiaries completed during such period), and

(iv) an amount equal to the aggregate net non-cash loss on Dispositions by the U.S. Borrower and the Restricted Subsidiaries during such period (other than Dispositions in the ordinary course of business) to the extent deducted in arriving at such Consolidated Net Income; over

(b) the sum, without duplication, of:

(i) an amount equal to the amount of all non-cash credits included in arriving at such Consolidated Net Income and cash charges included in clauses (a) through (f) of the definition of Consolidated Net Income,

(ii)(A) without duplication of amounts deducted pursuant to clause (xi) below in prior fiscal years, the amount of Capital Expenditures made in cash or accrued during such period, except to the extent that such Capital Expenditures were financed with the proceeds of Indebtedness or equity issuances by Holdings or any of its Restricted Subsidiaries, and (B) the aggregate amount of expenditures made by Holdings and its Restricted Subsidiaries during such period for acquired or developed rights in pharmaceutical products, except to the extent such expenditures (1) already reduced Consolidated Net Income for such period, (2) such expenditures were financed with the proceeds of Indebtedness or equity issuances by Holdings or any of its Restricted Subsidiaries or (3) such expenditures exceed $20,000,000 in any such period,

(iii) the aggregate amount of all principal payments of long term Indebtedness of the U.S. Borrower and the Restricted Subsidiaries (including (A) the principal component of payments in respect of Capitalized Leases and (B) the amount of any mandatory prepayment of Term Loan pursuant to Sections 2.07(a), (b) or (c) but excluding (X) all other prepayments of Term Loans and (Y) all prepayments of Revolving Credit Loans and Swing Line Loans) made during such period, except to the extent financed with the proceeds of other Indebtedness of the U.S. Borrower or the Restricted Subsidiaries,

-23-

(iv) an amount equal to the aggregate net non-cash gain on Dispositions by the U.S. Borrower and the Restricted Subsidiaries during such period (other than Dispositions in the ordinary course of business) to the extent included in arriving at such Consolidated Net Income,

(v) increases in Consolidated Working Capital and long-term account receivables for such period (other than any such increases arising from acquisitions by the U.S. Borrower and the Restricted Subsidiaries during such period),

(vi) cash payments by the U.S. Borrower and the Restricted Subsidiaries during such period in respect of long-term liabilities of the U.S. Borrower and the Restricted Subsidiaries other than Indebtedness,

(vii) without duplication of amounts deducted pursuant to clause (xi) below in prior fiscal years, the amount of Investments and acquisitions made during such period pursuant to Section 7.02 (other than Section 7.02(a) and Investments in the U.S. Borrower or any Restricted Subsidiary) to the extent that such Investments and acquisitions were financed with internally generated cash flow of the U.S. Borrower and the Restricted Subsidiaries,

(viii) the amount of Restricted Payments paid during such period pursuant to Section 7.06(f) or (g) to the extent such Restricted Payments were financed with internally generated cash flow of the U.S. Borrower and the Restricted Subsidiaries,

(ix) the aggregate amount of expenditures actually made by the U.S. Borrower and the Restricted Subsidiaries in cash during such period (including expenditures for the payment of financing fees) to the extent that such expenditures are not expensed during such period,

(x) the aggregate amount of any premium, make-whole or penalty payments actually paid in cash by the U.S. Borrower and the Restricted Subsidiaries during such period that are required to be made in connection with any prepayment of Indebtedness,

(xi) without duplication of amounts deducted from Excess Cash Flow in prior periods, the aggregate consideration required to be paid in cash by the U.S. Borrower or any of the Restricted Subsidiaries pursuant to binding contracts (the “Contract Consideration”) entered into prior to or during such period relating to Permitted Acquisitions or Capital Expenditures to be consummated or made during the period of four consecutive fiscal quarters of the U.S. Borrower following the end of such period, provided that to the extent the aggregate amount of internally generated cash actually utilized to finance such Permitted Acquisitions or Capital Expenditures during such period of four consecutive fiscal quarters is less than the Contract Consideration, the amount of such shortfall shall be added to the calculation of Excess Cash Flow at the end of such period of four consecutive fiscal quarters, and

-24-

(xii) the amount of cash taxes paid in such period to the extent they exceed the amount of tax expense deducted in determining Consolidated Net Income for such period.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Matter” means any effect, change, circumstance or development: (i) resulting from or attributable to the announcement of the Transaction, in each case including any actual or threatened termination, cancellation or limitation of, or any modification or change in, any business relationship of the APP Business (including any relationship with any supplier, employee, customer or group of suppliers, employees and customers, or performance) resulting from or attributable to any of the foregoing in this clause (i), (ii) relating to, or resulting from changes to, state, national or international political, social, general business or economic conditions (except to the extent that the APP Business, taken as a whole, is disproportionately affected thereby in any material respect as compared to other companies and businesses operating in the generic pharmaceutical industry), (iii) any failure in and of itself of the APP Business to meet any estimate or expectation with respect to revenue, earnings, earnings before interest, taxes, depreciation and amortization, results of operations, cash flow or other measures of financial or operating performance, in and of itself (it being understood that the facts giving rise to such failure that are not otherwise excluded hereunder in determining whether a Closing Date Material Adverse Effect has occurred or is reasonably expected to occur may be taken into account), (iv) relating, or resulting from changes to, any of the industries in which the APP Business operates (except to the extent that the APP Business, taken as a whole, is disproportionately affected thereby in any material respect as compared to other companies and businesses operating in the generic pharmaceutical industry), (v) relating to, or resulting from, the commencement, occurrence or continuation of any war, armed hostilities or acts of terrorism involving or affecting the United States or any other jurisdiction in which the APP Business operates (except to the extent that the APP Business, taken as a whole, is disproportionately affected thereby in any material respect as compared to other companies and businesses operating in the generic pharmaceutical industry), (vi) relating to, or resulting from changes to, financial, banking, commodities or securities markets generally (including any disruption thereof and any decline in the price of any security market index or commodity), (vii) relating to changes after the date hereof in GAAP or the accounting rules and regulations of the SEC or any successor thereto (or interpretations thereof) or (viii) relating to changes in law or regulations (or interpretations thereof) (but only to the extent that the APP Business, taken as a whole, is not disproportionately affected thereby in any material respect as compared to other companies and businesses operating in the generic pharmaceutical industry).

“Excluded Subsidiary” means (a) any Subsidiary that is not a wholly-owned Subsidiary, (b) each Subsidiary listed on Schedule 1.01B hereto, (c) any Subsidiary that is prohibited by applicable Law from guaranteeing the Obligations, (d) any Domestic Subsidiary that is a Subsidiary of a Foreign Subsidiary, (e) any captive insurance subsidiary (i.e., any Subsidiary that does not engage in any business or own any significant assets or have any significant liabilities other than providing insurance (except reinsurance in respect of insurance from a third-party insurance company) to, and collecting related premiums from, Holdings and its Subsidiaries with respect to those categories of risk that are not covered by Holdings and its Subsidiaries’ third party insurance risk coverage and which are not generally available at

-25-

commercially reasonable rates as determined in good faith by Holdings), (f) any Subsidiary that is a not-for-profit organization under applicable laws, (g) any Subsidiary that the U.S. Borrower has designated in writing to the Administrative Agent as a special purpose entity but for only so long as such Subsidiary is not a Material Subsidiary and (h) any other Subsidiary with respect to which, in the reasonable judgment of the Administrative Agent (confirmed in writing by notice to the U.S. Borrower), the cost or other consequences (including any adverse tax consequences) of providing a Guarantee shall be excessive in view of the benefits to be obtained by the Lenders therefrom.

“Facility” means the U.S. Tranche A Term Loans, the U.S. Tranche B Term Loans, the P.R. Term Loans, the Revolving Credit Facility, the Swing Line Sublimit or the Letter of Credit Sublimit, as the context may require.

“Fair Market Value” means, with respect to any asset or liability, the fair market value of such asset or liability as determined by the U.S. Borrower in good faith; provided that if the fair market value is equal to or exceeds 5% of the Consolidated Total Assets, such determination shall be made by the Board of Directors of the U.S. Borrower.

“Federal Funds Rate” means, for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal Funds brokers of recognized standing selected by the Administrative Agent.

“Financial Covenant” means the covenant set forth in Section 7.11.

“Fitch” means Fitch Ratings, Ltd. and any successor thereto.

“Foreign Casualty Event” has the meaning specified in Section 2.05(b)(viii).

“Foreign Disposition” has the meaning specified in Section 2.05(b)(viii).

“Foreign Lender” has the meaning specified in Section 3.01(j).

“Foreign Subsidiary” means any direct or indirect Restricted Subsidiary of the U.S. Borrower which (a) is not a Domestic Subsidiary or (b) is set forth on Schedule 1.01C.

“FRB” means the Board of Governors of the Federal Reserve System of the United States or any successor thereto.

“Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course.

-26-

“Funded Debt” means all indebtedness of the U.S. Borrower and the Restricted Subsidiaries for borrowed money that matures more than one year from the date of its creation or matures within one year from such date that is renewable or extendable, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including Indebtedness in respect of the Loans.

“GAAP” means generally accepted accounting principles in the United States of America, as in effect from time to time; provided, however, that if the U.S. Borrower notifies the Administrative Agent that the U.S. Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the U.S. Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

“Governmental Authority” means any nation or government, any state or other political subdivision thereof and any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Granting Lender” has the meaning specified in Section 12.07(h).

“Guarantee” means, as to any Person, without duplication, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other monetary obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other monetary obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance of such Indebtedness or other monetary obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other monetary obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided that the term “Guarantee” shall not include endorsements for collection or deposit, in either case in the ordinary course of business, or customary and reasonable indemnity obligations in effect on the Closing Date or entered into in connection with any acquisition or disposition of assets permitted under this Agreement (other than such obligations with respect to Indebtedness). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

-27-

“Guarantee Supplements” has the meaning provided in the respective Subsidiary Guaranty.

“Guaranteed Creditors” shall mean and include each of the Agents, the Lenders, each L/C Issuer and each Person (other than any Loan Party or any of its Subsidiaries) party to a Secured Hedge Agreement or Cash Management Services to the extent that such Person constitutes a Secured Creditor under the Security Agreements.

“Guarantors” means, collectively, Holdings, the U.S. Borrower, each U.S. Subsidiary Guarantor and each P.R. Subsidiary Guarantor, in each case in such Person’s capacity as a Guarantor under the respective Guaranty to which it is a party.

“Guaranty” means, collectively, the Holdings Guaranty, the U.S. Borrower Guaranty and each Subsidiary Guaranty.

“Hazardous Materials” means (i) all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes, materials, chemicals, constituents or pollutants; (ii) any chemicals, materials or substances defined as or included in a definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous substances,” “restricted hazardous waste,” “toxic substances,” “toxic pollutants,” “contaminants,” or “pollutants” or words of similar import under any applicable Environmental Law (iii) all petroleum or petroleum distillates and any petroleum product, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes; and (iv) any chemical, material or substance the use of, exposure to, or Release of which is prohibited, limited or regulated pursuant to any Environmental Law.

“Hedge Bank” means any Person that is a Lender or an Affiliate of a Lender at the time it enters into a Secured Hedge Agreement, in its capacity as a party thereto, and such Person’s successors and permitted assigns.

“Holdings” has the meaning specified in the introductory paragraph to this Agreement.

“Holdings Guaranteed Obligations” shall mean the principal and interest on each Note and each Loan made under this Agreement, all reimbursement obligations and unpaid drawings with respect to each Letter of Credit issued for the account of the U.S. Borrower, together with all the other obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities (including, without limitation, indemnities, fees and interest thereon) of the Borrowers to each Lender, each Agent, each L/C Issuer and the Collateral Agent now existing or hereafter incurred under, arising out of or in connection with this Agreement or any other Loan Document and the due performance and compliance by each Borrower with all the terms, conditions and agreements contained in the Loan Documents to which it is a party.

“Holdings Guaranty” has the meaning provided in Section 11.01.

-28-

“Honor Date” has the meaning specified in Section 2.03(c)(i).

“Incremental Amendment” has the meaning set forth in Section 2.14(a).

“Incremental Facility Closing Date” has the meaning set forth in Section 2.14(a).

“Incremental Term Loans” has the meaning set forth in Section 2.14(a).

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a) all indebtedness of such Person for borrowed money and all indebtedness of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b) the maximum amount (after giving effect to any prior drawings or reductions which may have been reimbursed) of all letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds, performance bonds and similar instruments issued or created by or for the account of such Person;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of property or services (other than any earn-out obligation until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements and mortgage, industrial revenue bond, industrial development bond and similar financings), whether or not such indebtedness shall have been assumed by such Person;

(f) all Attributable Indebtedness;

(g) all obligations of such Person in respect of Disqualified Equity Interests; and

(h) all Guarantees of such Person in respect of any of the foregoing;

provided that Indebtedness shall not include trade payables and accrued expenses arising in the ordinary course of business and consistent with past practices.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, except to the extent such Person’s liability for such Indebtedness is otherwise limited

-29-

and only to the extent such Indebtedness would be included in the calculation of Consolidated Total Debt. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of Indebtedness of any Person for purposes of clause (e) above shall be deemed to be equal to the lesser of (i) the aggregate unpaid amount of such Indebtedness and (ii) the Fair Market Value of the property encumbered thereby.

“Indemnified Liabilities” has the meaning set forth in Section 12.05.

“Indemnitees” has the meaning set forth in Section 12.05.

“Information” has the meaning specified in Section 12.08.

“Intellectual Property Security Agreement” means a U.S. Intellectual Property Security Agreement, a P.R. Intellectual Property Security Agreement or both, as the case may be.

“Intercompany Subordination Agreement” means the Intercompany Subordination Agreement, substantially in the form attached as Exhibit K.

“Interest Payment Date” means, (a) as to any Eurocurrency Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date of the Facility under which such Loan was made; provided that if any Interest Period for a Eurocurrency Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the last Business Day of each March, June, September and December and the Maturity Date of the Facility under which such Loan was made.

“Interest Period” means, as to each Eurocurrency Rate Loan, the period commencing on the date such Eurocurrency Rate Loan is disbursed or converted to or continued as a Eurocurrency Rate Loan and ending on the date one, two, three or six months thereafter, or to the extent agreed to by each Lender of such Eurocurrency Rate Loan, nine or twelve months, as selected by the U.S. Borrower or the P.R. Borrower, as applicable, in its Loan Notice; provided that:

(a) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

(b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(c) no Interest Period shall extend beyond the Maturity Date of the Facility under which such Loan was made.

-30-

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests or debt or other securities of another Person (including by merger, consolidation, amalgamation or otherwise), (b) a loan, advance or capital contribution to, Guarantee or assumption of Indebtedness of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person or (c) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such Person. For purposes of covenant compliance, the amount of any Investment shall be (i) except as otherwise set forth in clause (ii) of this definition, the amount actually invested (in the case of any non-cash asset invested, taking the Fair Market Value thereof at the time the investment is made), without adjustment for subsequent increases or decreases in the value of such Investment and (ii) in the case of any Investment deemed to be made in an Unrestricted Subsidiary pursuant to Section 6.14, as determined in accordance with the last sentence of Section 6.14.

“IP Collateral” means all “Intellectual Property Collateral” referred to in the Collateral Documents and all of the other IP Rights that are or are required by the terms hereof or of the Collateral Documents to be subject to Liens in favor of the Collateral Agent for the benefit of the Secured Parties.

“IP Rights” has the meaning set forth in Section 5.15.

“IRS” means the United States Internal Revenue Service.

“Laws” means, collectively, all international, foreign, Federal, state, Commonwealth of Puerto Rico and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“L/C Advance” means, with respect to each Revolving Credit Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Pro Rata Share.

“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Revolving Credit Borrowing.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof.

“L/C Issuer” means DBNY and any other Lender, and, in each case, any Affiliate thereof that becomes an L/C Issuer in accordance with Section 2.03(k) or 12.07(j), in each case, in its capacity as an issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.

-31-

“L/C Obligations” means, as at any date of determination, the aggregate undrawn amount of all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings.

“Lender” has the meaning specified in the introductory paragraph to this Agreement and, as the context requires, includes an L/C Issuer and the Swing Line Lender, and their respective successors and assigns as permitted hereunder, each of which is referred to herein as a “Lender”.

“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify in writing to the Borrowers and the Administrative Agent.

“Letter of Credit” means any letter of credit issued hereunder. A Letter of Credit may be a commercial letter of credit or a standby letter of credit.

“Letter of Credit Application” means an application and agreement for the issuance or extension of, or amendment to, a Letter of Credit in the form from time to time in use by the relevant L/C Issuer.

“Letter of Credit Expiration Date” means the day that is five (5) Business Days prior to the scheduled Maturity Date then in effect for the Revolving Credit Facility (or, if such day is not a Business Day, the next preceding Business Day).

“Letter of Credit Sublimit” means an amount equal to the lesser of (a) $20,000,000 and (b) the aggregate amount of the Revolving Credit Commitments. The Letter of Credit Sublimit is part of, and not in addition to, the Revolving Credit Facility.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any Capitalized Lease having substantially the same economic effect as any of the foregoing).

“Loan” means an extension of credit by a Lender to a Borrower under Article 2 in the form of a Term Loan, a Revolving Credit Loan or a Swing Line Loan.

“Loan Documents” means, collectively, (i) this Agreement, (ii) the Notes, (iii) the Guaranties, (iv) the Collateral Documents, (v) the Intercompany Subordination Agreement, (vi) each Letter of Credit Application and (vii) that certain Letter Agreement among ABBI, the Credit Agreement Parties, the Lead Arrangers and the Lenders party hereto on the Closing Date.

“Loan Notice” means a notice pursuant to Section 2.02(a) of (a) a U.S. Tranche A Term Borrowing, (b) a U.S. Tranche B Term Borrowing, (c) a P.R. Term Borrowing, (d) a Revolving Credit Borrowing, (e) a conversion of Loans from one Type to the other, or (f) a continuation of Eurocurrency Rate Loans, which, if in writing, shall be substantially in the form of Exhibit A.

-32-

“Loan Parties” means, collectively, each Borrower and each Guarantor.

“Manufacturing Agreement” means the Manufacturing Agreement, to be dated as of the date hereof, to be entered into between New Abraxis, Inc. and the U.S. Borrower, as such Manufacturing Agreement is in effect on the Closing Date.

“Master Agreement” has the meaning specified in the definition of “Swap Contract”.

“Material Adverse Effect” means (a) a material adverse effect on the business, operations, assets, liabilities or financial condition of Holdings and its Subsidiaries, taken as a whole, (b) a material adverse effect on the ability of the Loan Parties (taken as a whole) to perform their payment obligations under the Loan Documents to which they are a party or (c) a material adverse effect on the rights and remedies of the Lenders under any Loan Document.

“Material Subsidiary” means, at any date of determination, (i) the P.R. Borrower and (ii) each other Restricted Subsidiary of the U.S. Borrower (a) whose total assets at the last day of the Test Period ending on the last day of the most recent fiscal period for which financial statements have been delivered pursuant to Section 6.01 were equal to or greater than 2.5% of the Consolidated Total Assets of Holdings and the Restricted Subsidiaries at such date or (b) whose gross revenues for such Test Period were equal to or greater than 5% of the consolidated gross revenues of the U.S. Borrower and the Restricted Subsidiaries for such period, in each case determined in accordance with GAAP.

“Maturity Date” means (a) with respect to the Revolving Credit Facility, the Swing Line Facility and the Credit Extensions under each such Facility, November 13, 2012 and (b) with respect to the Term Loans, November 13, 2013.

“Maximum Rate” has the meaning specified in Section 12.10.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Mortgage” means, collectively, the deeds of trust, trust deeds, hypothecs and mortgages made by the Loan Parties in favor or for the benefit of the Collateral Agent on behalf of the Secured Parties, in each case, in form and substance reasonably satisfactory to the Collateral Agent (taking account of relevant local Law matters), and any other mortgages executed and delivered pursuant to Section 6.11.

“Mortgage Policies” has the meaning specified in Section 6.13(b)(ii).

“Mortgaged Properties” has the meaning specified in paragraph (f) of the definition of “Collateral and Guarantee Requirement”.

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

-33-

“Net Cash Proceeds” means:

(a) with respect to the Disposition of any asset by Holdings, the U.S. Borrower or any Restricted Subsidiary or any Casualty Event, the excess, if any, of (i) the sum of cash and Cash Equivalents received in connection with such Disposition or Casualty Event (including any cash or Cash Equivalents received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received and, with respect to any Casualty Event, any insurance proceeds or condemnation awards in respect of such Casualty Event actually received by or paid to or for the account of Holdings, the U.S. Borrower or any Restricted Subsidiary) over (ii) the sum of (A) the principal amount, premium or penalty, if any, interest and other amounts on any Indebtedness that is secured by the asset subject to such Disposition or Casualty Event and that is required to be repaid (and is timely repaid) in connection with such Disposition or Casualty Event (other than Indebtedness under the Loan Documents), (B) the out-of-pocket expenses (including Attorney Costs, investment banking fees, survey costs, title insurance premiums, and related search and recording charges, transfer taxes, deed or mortgage recording taxes, other customary expenses and brokerage, consultant and other customary fees) actually incurred by Holdings, the U.S. Borrower or such Restricted Subsidiary in connection with such Disposition or Casualty Event, (C) taxes paid or reasonably estimated to be actually payable in connection therewith, and (D) any reserve for adjustment in respect of (x) the sale price of such asset or assets established in accordance with GAAP and (y) any liabilities associated with such asset or assets and retained by Holdings, the U.S. Borrower or any Restricted Subsidiary after such sale or other disposition thereof, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction and it being understood that “Net Cash Proceeds” shall include any cash or Cash Equivalents (i) received upon the Disposition of any non-cash consideration received by Holdings, the U.S. Borrower or any Restricted Subsidiary in any such Disposition and (ii) upon the reversal (without the satisfaction of any applicable liabilities in cash in a corresponding amount) of any reserve described in clause (D) above or, if such liabilities have not been satisfied in cash and such reserve is not reversed within three hundred and sixty-five (365) days after such Disposition or Casualty Event, the amount of such reserve; provided that (x) no net cash proceeds calculated in accordance with the foregoing realized in a single transaction or series of related transactions shall constitute Net Cash Proceeds unless such net cash proceeds shall exceed $5,000,000 and (y) no such net cash proceeds shall constitute Net Cash Proceeds under this clause (a) in any fiscal year until the aggregate amount of all such net cash proceeds in such fiscal year shall exceed $10,000,000 (and thereafter only net cash proceeds in excess of such amount shall constitute Net Cash Proceeds under this clause (a)); and

(b) with respect to the incurrence or issuance of any Indebtedness or Equity Interests by Holdings, the U.S. Borrower or any Restricted Subsidiary, the excess, if any, of (i) the sum of the cash actually received in connection with such incurrence or

-34-

issuance over (ii) the investment banking fees, underwriting discounts, commissions, costs and other out-of-pocket expenses and other customary expenses (including Attorney Costs), incurred by Holdings, the U.S. Borrower or such Restricted Subsidiary in connection with such incurrence or issuance.

“Non-Cash Charges” has the meaning set forth in the definition of the term “Consolidated EBITDA”.

“Non-Consenting Lenders” has the meaning specified in Section 3.07(d).

“Nonrenewal Notice Date” has the meaning specified in Section 2.03(b)(iii).

“Not Otherwise Applied” means, with reference to any amount of Net Cash Proceeds of any transaction or event or of Excess Cash Flow, that such amount (a) was not required to be applied to prepay the Loans pursuant to Section 2.05(b), and (b) was not previously applied in determining the permissibility of a transaction under the Loan Documents where such permissibility was (or may have been) contingent on receipt of such amount or utilization of such amount for a specified purpose. The U.S. Borrower shall promptly notify the Administrative Agent of any application of such amount as contemplated by clause (b) above.

“Note” means a U.S. Term Note, a P.R. Term Note, a Revolving Credit Note or the Swing Line Note, as the context may require.

“NPL” means the National Priorities List under CERCLA.

“Obligations” means all (x) advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party and its Subsidiaries arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising, (y) obligations of any Loan Party and its Subsidiaries arising under any Secured Hedge Agreement and (z) Cash Management Obligations, in the case of each of clauses (x), (y) and (z), including interest and fees that accrue after the commencement by or against any Loan Party or Subsidiary of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding. Without limiting the generality of the foregoing, the Obligations of the Loan Parties under the Loan Documents (and of their Subsidiaries to the extent they have obligations under the Loan Documents) include (a) the obligation (including guarantee obligations) to pay principal, interest, Letter of Credit commissions, reimbursement obligations, charges, expenses, fees, Attorney Costs, indemnities and other amounts payable by any Loan Party or its Subsidiaries under any Loan Document and (b) the obligation of any Loan Party or any of its Subsidiaries to reimburse any amount in respect of any of the foregoing that any Lender, in its sole discretion, may elect to pay or advance on behalf of such Loan Party or such Subsidiary. Notwithstanding the foregoing, any release of Collateral or Guarantors effected in the manner permitted by this Agreement shall not require the consent of holders of obligations under Secured Hedge Agreements or the holders of the Cash Management Obligations.

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive

-35-

documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating or limited liability company agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and, if applicable, any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

“Other Taxes” has the meaning specified in Section 3.01(b).

“Outstanding Amount” means (a) with respect to the Term Loans, Revolving Credit Loans and Swing Line Loans on any date, the outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Term Loans, Revolving Credit Loans (including any refinancing of any L/C Borrowing with a Revolving Credit Borrowing) and Swing Line Loans, as the case may be, occurring on such date; and (b) with respect to any L/C Obligations on any date, the outstanding amount thereof on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes thereto as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit (including any refinancing of any L/C Borrowing with a Revolving Credit Borrowing) or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date.

“Participant” has the meaning specified in Section 12.07(e).

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Section 412 of the Code or Section 302 or Title IV of ERISA and is sponsored or maintained by any Loan Party or any ERISA Affiliate or to which any Loan Party or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five (5) plan years.

“Permitted Acquisition” has the meaning specified in Section 7.02(i).

“Permitted Equity Issuance” means any sale or issuance of any Qualified Equity Interests of Holdings to the extent permitted hereunder.

“Permitted Holder” means (i) Dr. Patrick Soon-Shiong, his spouse or his lineal descendants (including by adoption and stepchildren) and (ii) any trust, partnership, limited liability company or corporation or other entity, in each case to the extent not an operating company, of which a 50% or more controlling interest is held by beneficiaries, partners or owners who are any of the persons described in clause (i) above or any combination of such persons; provided that (x) any such person described in clause (i) above that is either the sole trustee with respect to any such trust or has the right to both remove and appoint at least a majority of trustees with respect to any such trust (or such greater number of trustees necessary

-36-

to direct or cause the direction of the management and policies of such trust), shall be deemed to hold a 50% or more controlling interest in such trust and (y) any such person described in clause (i) above that is either the sole general partner, sole member, sole managing member or sole director, as the case may be, with respect to any such partnership, limited liability company or corporation, as the case may be, or has the right to both remove and appoint (1) in the case of any such limited liability company, at least a majority of the managing members or members, of such limited liability company (or such greater number of managing members or members necessary to direct or cause the direction of the management and policies of such limited liability company) or (2) in the case of any corporation or other entity, at least a majority of the individuals governing such corporation or other entity (or such greater number of individuals necessary to direct or cause the direction of the management and policies of such corporation or other entity) shall be deemed to hold a 50% or more controlling interest in such partnership, limited liability company, corporation or other entity, as the case may be.

“Permitted Refinancing” means, with respect to any Person, any modification, replacement, refinancing, refunding, renewal or extension of any Indebtedness of such Person; provided that (a) the principal amount (or accreted value, if applicable) thereof does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so modified, replaced, refinanced, refunded, renewed or extended except by an amount equal to unpaid accrued interest and premium thereon plus other reasonable amounts paid, and fees and expenses reasonably incurred in connection with such modification, replacement, refinancing, refunding, renewal or extension plus the amount of any existing commitments unutilized thereunder, (b) other than with respect to a Permitted Refinancing in respect of Indebtedness permitted pursuant to Section 7.03(e), such modification, replacement, refinancing, refunding, renewal or extension has a final maturity date equal to or later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being modified, replaced, refinanced, refunded, renewed or extended, (c) other than with respect to a Permitted Refinancing in respect of Indebtedness permitted pursuant to Section 7.03(e), at the time thereof, no Event of Default shall have occurred and be continuing, and (d), (i) to the extent the Indebtedness being modified, replaced, refinanced, refunded, renewed or extended is subordinated in right of payment to the Obligations, such modification, replacement, refinancing, refunding, renewal or extension is subordinated in right of payment to the Obligations on terms at least as favorable to the Lenders as those contained in the documentation governing the Indebtedness being modified, replaced, refinanced, refunded, renewed or extended, (ii) the terms and conditions (including, if applicable, as to collateral but excluding as to subordination, interest rate and redemption premium) of any such modified, replaced, refinanced, refunded, renewed or extended Indebtedness, taken as a whole, are not materially less favorable to the Loan Parties or the Lenders than the terms and conditions of the Indebtedness being modified, replaced, refinanced, refunded, renewed or extended; provided that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the U.S. Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the U.S. Borrower within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees), and (iii)

-37-

such modification, replacement, refinancing, refunding, renewal or extension is incurred only by the Person (or Persons) who is the obligor of the Indebtedness being modified, refinanced, refunded, renewed or extended.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Pfizer Lease” means the lease agreement, dated February 14, 2007 between P.R. Borrower and Pfizer Pharmaceuticals, LLC, as such lease agreement is in effect on the Closing Date.

“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by any Loan Party or, with respect to any such plan that is subject to Section 412 of the Code or Section 302 or Title IV of ERISA, any ERISA Affiliate.

“Pledged Debt” has the meaning specified in the respective Security Agreement.

“Pledged Equity” has the meaning specified in the respective Security Agreement.

“Post-Acquisition Period” means, with respect to any Permitted Acquisition or conversion of an Unrestricted Subsidiary to a Converted Restricted Subsidiary, the period beginning on the date such Permitted Acquisition or conversion of an Unrestricted Subsidiary to a Converted Restricted Subsidiary is consummated and ending on the last day of the fourth full consecutive fiscal quarter immediately following the date on which such Permitted Acquisition or conversion of an Unrestricted Subsidiary to a Converted Restricted Subsidiary is consummated.

“Principal L/C Issuer” means DBNY and any other L/C Issuer that has issued Letters of Credit having an aggregate Outstanding Amount in excess of $500,000.

“Pro Forma Adjustment” means, for any Test Period that includes all or any part of a fiscal quarter included in any Post-Acquisition Period, with respect to the Acquired EBITDA of the applicable Acquired Entity or Business or Converted Restricted Subsidiary or the Consolidated EBITDA of the U.S. Borrower, the pro forma increase or decrease in such Acquired EBITDA or such Consolidated EBITDA, as the case may be, certified by the U.S. Borrower to the Administrative Agent and the Lenders as having been determined in good faith to be reasonably anticipated to be realizable by the U.S. Borrower as a result of (a) actions taken during such Post-Acquisition Period for the purposes of realizing reasonably identifiable cost savings and synergies, (b) operational changes occurring during such Post-Acquisition Period or (c) any additional costs incurred during such Post-Acquisition Period in each case in connection with the combination of the operations of such Acquired Entity or Business or such Converted Restricted Subsidiary with the operations of the U.S. Borrower and the Restricted Subsidiaries; provided that, (i) so long as such actions are taken (or a plan for the realization of such cost savings and synergies is established) during such Post-Acquisition Period or such costs are incurred during such Post-Acquisition Period, as applicable, it may be assumed, for purposes of projecting such pro forma increase or decrease to such Acquired EBITDA or such Consolidated EBITDA, as the case may be, that such cost savings related to such actions will be realizable

-38-

during such Test Period, or such additional costs, as applicable, will be incurred during such Test Period and (ii) any such pro forma increase or decrease to such Acquired EBITDA or such Consolidated EBITDA, as the case may be, shall be without duplication for cost savings or additional costs already included in such Acquired EBITDA or such Consolidated EBITDA, as the case may be, for such Test Period.

“Pro Forma Basis”, “Pro Forma Compliance” and “Pro Forma Effect” mean, with respect to compliance with any test or covenant hereunder, that (A) to the extent applicable, the Pro Forma Adjustment shall have been made and (B) all Specified Transactions and the following transactions in connection therewith shall be deemed to have occurred as of the first day of the applicable period of measurement in such test or covenant: (a) income statement items (whether positive or negative) attributable to the property or Person subject to such Specified Transaction, (i) in the case of a Disposition of all or substantially all Equity Interests in any Subsidiary of the U.S. Borrower or any division, product line, or facility used for operations of the U.S. Borrower or any of its Subsidiaries, shall be excluded, and (ii) in the case of a Permitted Acquisition, conversion of an Unrestricted Subsidiary to a Converted Restricted Subsidiary, or Investment described in the definition of “Specified Transaction”, shall be included, (b) any retirement or repayment of Indebtedness, and (c) any Indebtedness incurred or assumed by the U.S. Borrower or any of the Restricted Subsidiaries in connection therewith and if such Indebtedness has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination; provided that, without limiting the application of the Pro Forma Adjustment pursuant to (A) above, the foregoing pro forma adjustments may be applied to any such test or covenant solely to the extent that such adjustments are consistent with the definition of Consolidated EBITDA and give effect to events (including operating expense reductions) that are (i) (x) directly attributable to such transaction, (y) expected to have a continuing impact on the U.S. Borrower and the Restricted Subsidiaries and (z) factually supportable or (ii) otherwise consistent with the definition of Pro Forma Adjustment; provided further that no pro forma adjustments shall apply to the consummation of the Transaction except as expressly contemplated in the definitions of “Consolidated EBITDA”.

“Pro Rata Share” means, with respect to each Lender at any time a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Commitment of such Lender under the applicable Facility or Facilities at such time and the denominator of which is the aggregate amount of the Commitments of all Lenders under the applicable Facility or Facilities at such time; provided that if such Commitment has been terminated, then the Pro Rata Share of each Lender shall be determined based on the Pro Rata Share of such Lender immediately prior to such termination and after giving effect to any subsequent assignments made pursuant to the terms hereof.

“Projections” shall have the meaning set forth in Section 6.01(c).

“P.R.” or “Puerto Rico” means the Commonwealth of Puerto Rico.

“P.R. Borrower” has the meaning specified in the introductory paragraph to this Agreement.

-39-

“P.R. Guaranteed Creditors” shall mean and include each of the Agents, the Lenders and each Person (other than any Loan Party or any of its Subsidiaries) party to a Secured Hedge Agreement or Cash Management Services to the extent that such Person constitutes a Secured Creditor under the P.R. Security Agreement.

“P.R. Intellectual Property Security Agreement” means the P.R. Intellectual Property Security Agreement, substantially in the form attached as Exhibit J-2.

“P.R. Loan Parties” means, collectively, the P.R. Borrower and each P.R. Subsidiary Guarantor.

“P.R. Security Agreement” means, collectively, the P.R. Security Agreement executed by the P.R. Loan Parties, substantially in the form of Exhibit G-2, together with each other security agreement supplement executed and delivered pursuant to Section 6.11.

“P.R. Subsidiary Guarantor” means, collectively, the Subsidiaries of the P.R. Borrower that are Guarantors.

“P.R. Subsidiary Guaranty” means, collectively, (a) the P.R. Subsidiary Guaranty made by the P.R. Subsidiary Guarantors in favor of the Administrative Agent on behalf of the Secured Parties, substantially in the form of Exhibit F-2 and (b) each other guaranty and guaranty supplement delivered by a P.R. Subsidiary Guarantor pursuant to Section 6.11.

“P.R. Term Borrowing” means a borrowing consisting of simultaneous P.R. Term Loans of the same Type and, in the case of Eurocurrency Rate Loans, having the same Interest Period made by each of the P.R. Term Lenders pursuant to Section 2.01.

“P.R. Term Commitment” means, as to each P.R. Term Lender, its obligation to make a P.R. Term Loan to the P.R. Borrower pursuant to Section 2.01(a)(iii) in an aggregate principal amount not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “P.R. Term Commitment” or in the Assignment and Assumption pursuant to which such P.R. Term Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement. The initial aggregate amount of the P.R. Term Commitments is $35,000,000.

“P.R. Term Lender” means, at any time, any Lender that has a P.R. Term Commitment or a P.R. Term Loan at such time.

“P.R. Term Loan” means a Loan made pursuant to Section 2.01(a)(iii).

“P.R. Term Note” means a promissory note of the P.R. Borrower payable to any P.R. Term Lender or its registered assigns, in substantially the form of Exhibit C-3 hereto, evidencing the aggregate Indebtedness of the P.R. Borrower to such P.R. Term Lender resulting from the P.R. Term Loans made by such P.R. Term Lender.

“Qualified Equity Interests” means any Equity Interests that are not Disqualified Equity Interests.

-40-

“Reference Date” has the meaning specified in the definition of “Available Amount”.

“Refinanced Term Loans” has the meaning specified in Section 12.01.

“Refinancing” means the repayment of all outstanding loans and the termination of all commitments under the Credit Agreement dated as of April 18, 2006 (as amended, supplemented and otherwise modified from time to time) by ABBI, the lenders party thereto and Fifth Third Bank, as administrative agent.

“Register” has the meaning set forth in Section 12.07(d).

“Regulation D” shall mean Regulation D of the FRB as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.

“Related Parties” has the meaning specified in Section 12.08.

“Release” means actively or passively dumping, disposing, discharging, injecting, spilling, pumping, leaking, leaching, emitting, escaping, emptying, pouring, seeping, migrating or the like, into or upon any land or water or air, or otherwise entering into the environment.

“Replacement Term Loans” has the meaning specified in Section 12.01.

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA or the regulations issued thereunder, other than events for which the thirty (30) day notice period has been waived under subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Term Loans or Revolving Credit Loans, a Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.

“Required Lenders” means, as of any date of determination, Lenders having more than 50% of the sum of the (a) Total Outstandings (with the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Lender for purposes of this definition), (b) aggregate unused Term Commitments and (c) aggregate unused Revolving Credit Commitments; provided that the unused Term Commitment and unused Revolving Credit Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

“Responsible Officer” means the chief executive officer, president, vice president, chief financial officer, treasurer or assistant treasurer or other similar officer of a Credit Agreement Party and, as to any document delivered on the Closing Date, any secretary or assistant secretary of a Credit Agreement Party. Any document delivered hereunder that is signed by a Responsible Officer of a Credit Agreement Party shall be conclusively presumed to have been authorized by all necessary corporate, limited liability company, partnership and/or other action on the part of such Credit Agreement Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Credit Agreement Party.

-41-

“Restoration Certification” means, with respect to any Casualty Event, a certification made by a Responsible Officer of the U.S. Borrower or a Restricted Subsidiary, as applicable, to the Administrative Agent prior to the end of the eighteen (18) month period following the receipt of insurance or condemnation proceeds after such Casualty Event certifying (a) that the U.S. Borrower or such Restricted Subsidiary intends to use the Net Cash Proceeds received in connection with such Casualty Event to repair, restore or replace the property or assets in respect of which such Casualty Event occurred, (b) the approximate costs of completion of such repair, restoration or replacement and (c) the approximate time period for completion of such repair, restoration or replacement.

“Restricted” shall mean, when referring to cash or Cash Equivalents of Holdings or any of its Subsidiaries, that such cash or Cash Equivalents appears (or would be required to appear) under GAAP as “restricted” on a consolidated balance sheet of Holdings or of any such Subsidiary (unless such appearance is related to Loan Documents or Liens created thereunder).

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interest of Holdings, the U.S. Borrower or any Restricted Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such Equity Interest, or on account of any return of capital to Holdings, the U.S. Borrower’s or any Restricted Subsidiary’s stockholders, partners or members (or the equivalent Persons thereof).

“Restricted Subsidiary” means any Subsidiary of Holdings (including each Borrower) other than an Unrestricted Subsidiary.

“Returns” has the meaning set forth in Section 5.10.

“Revolving Commitment Increase” has the meaning set forth in Section 2.14(a).

“Revolving Commitment Increase Lender” has the meaning set forth in Section 2.14(a).

“Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type and, in the case of Eurocurrency Rate Loans, having the same Interest Period made by each of the Revolving Credit Lenders pursuant to Section 2.01(b).

“Revolving Credit Commitment” means, as to each Revolving Credit Lender, its obligation to (a) make Revolving Credit Loans to the U.S. Borrower pursuant to Section 2.01(b), (b) purchase participations in L/C Obligations in respect of Letters of Credit and (c) purchase participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth, and opposite such Lender’s name on Schedule 2.01 under the caption “Revolving Credit Commitment” or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such

-42-

amount may be adjusted from time to time in accordance with this Agreement, including, if applicable, pursuant to Section 2.14. The aggregate Revolving Credit Commitments of all Revolving Credit Lenders shall be $150,000,000 on the Closing Date, as such amount may be adjusted from time to time in accordance with the terms of this Agreement.

“Revolving Credit Exposure” means, at any time, as to each Revolving Credit Lender, the sum of the outstanding principal amount of such Revolving Credit Lender’s Revolving Credit Loans at such time and its Pro Rata Share of the sum of the L/C Obligations and the Swing Line Obligations at such time.

“Revolving Credit Facility” means, at any time, the aggregate amount of the Revolving Credit Lenders’ Revolving Credit Commitments at such time.

“Revolving Credit Lender” means, at any time, any Lender that has a Revolving Credit Commitment at such time.

“Revolving Credit Loan” has the meaning specified in Section 2.01(b).

“Revolving Credit Note” means a promissory note of the U.S. Borrower payable to any Revolving Credit Lender or its registered assigns, in substantially the form of Exhibit C-4 hereto, evidencing the aggregate Indebtedness of the U.S. Borrower to such Revolving Credit Lender resulting from the Revolving Credit Loans made by such Revolving Credit Lender.

“Revolving Credit Percentage” of any Revolving Credit Lender at any time shall be that percentage which is equal to a fraction (expressed as a percentage) the numerator of which is the Revolving Credit Commitment of such Revolving Credit Lender at such time and the denominator of which is the aggregate Revolving Credit Commitments of all Lenders at such time, provided that if any such determination is to be made after the Revolving Credit Commitments have terminated, the determination of such percentages shall be made immediately before giving effect to such termination.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.

“Same Day Funds” means, with respect to disbursements and payments, immediately available funds in Dollars.

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

“Section 3.01(j)(i) Certificate” has the meaning specified in Section 3.01(j)(i).

“Secured Hedge Agreement” means any Swap Contract permitted under Article 7 that is entered into by and between any Loan Party and any Hedge Bank.

“Secured Obligations” has the meaning specified in the respective Security Agreement.

-43-

“Secured Parties” shall have the meaning specified in the respective Collateral Documents.

“Securities Act” means the Securities Act of 1933, as amended.

“Security Agreement” means the U.S. Security Agreement, the P.R. Security Agreement or both, as applicable.

“Security Agreement Supplement” has the meaning specified in the respective Security Agreement.

“Senior Secured Leverage Ratio” means, with respect to any Test Period, the ratio of (a) Consolidated Total Debt as of the last day of such Test Period that is secured by a Lien on any property or assets owned by Holdings or any of its Subsidiaries other than any portion of such Consolidated Total Debt that is (i) expressly subordinated in right of payment to the Obligations pursuant to subordination provisions reasonably satisfactory to the Administrative Agent or (ii) secured by Liens on the Collateral (but not on any other assets or properties of Holdings or any of its Subsidiaries) that are expressly subordinated to the Liens created pursuant to the Collateral Documents pursuant to intercreditor agreements reasonably satisfactory to the Administrative Agent to (b) Consolidated EBITDA for such Test Period.

“Separation Agreement” means the Separation and Distribution Agreement, dated as of November 13, 2007, by and among Holdings, the U.S. Borrower, New Abraxis, Inc., a Delaware corporation (to be renamed Abraxis BioScience, Inc.) and Abraxis LLC.

“Separation Documents” means the Separation Agreement, all exhibits, schedules and annexes thereto and the transition services agreement, the Manufacturing Agreement, dual officer agreement, the tax allocation agreement, the warehouse services agreement, the Employee Matters Agreement, and certain leases and other material agreements related thereto.

“Separation Lease Agreements” means (i) the Lease Agreement dated as of November 13, 2007, by and between Abraxis LLC, as Lessor, and the U.S. Borrower, as Lessee for the premises located at 2020 Ruby Street, Melrose Park, Illinois, (ii) the Lease Agreement, dated as of November 13, 2007, by and between the U.S. Borrower, as Lessor and Abraxis LLC as Lessee for the premises located at 3159 Staley Road, Grand Island, New York, (iii) the Lease Agreement, dated as of November 13, 2007, by and between Abraxis LLC as Lessor, and the U.S. Borrower as Lessee for the warehouse facilities located at 2045 N. Cornell Avenue, Melrose Park, Illinois and (iv) the Lease Agreement, dated as of November 13, 2007, by and between Abraxis LLC as Lessor, and the U.S. Borrower, as Lessee, for the research and development facility located at 2045 N. Cornell Avenue, Melrose Park, Illinois, in such case as each Lease Agreement is in effect on the Closing Date.

“Sold Entity or Business” has the meaning set forth in the definition of the term “Consolidated EBITDA”.

“Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than

-44-

the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“SPC” has the meaning specified in Section 12.07(h).

“Specified Transaction” means any Investment, Disposition, incurrence or repayment of Indebtedness, Restricted Payment, Subsidiary designation, Incremental Term Loan, Revolving Commitment Increase or other event that by the terms of this Agreement requires “Pro Forma Compliance” with a test or covenant hereunder or requires such test or covenant to be calculated on a “Pro Forma Basis”.

“Spin-off” shall have the meaning provided in the Separation Agreement (as in effect on the Closing Date).

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the U.S. Borrower.

“Subsidiary Guaranty” means the U.S. Subsidiary Guaranty, the P.R. Subsidiary Guaranty or both, as applicable.

“Subsidiary Guarantor” means a U.S. Subsidiary Guarantor, a P.R. Subsidiary Guarantor or both, as applicable.

“Supermajority Lenders” of any Tranche means those Lenders that would constitute the Required Lenders under, and as defined in, this Agreement if (x) all outstanding Obligations of the other Tranches under this Agreement were repaid in full and all Commitments with respect thereto were terminated and (y) the reference to “50%” contained therein were changed to “66 ²/3%.”

“Supplemental Administrative Agent” has the meaning specified in Section 9.13 and “Supplemental Administrative Agents” shall have the corresponding meaning.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options,

-45-

forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contract has been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contract, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include, with the consent of the U.S. Borrower, a Lender or any Affiliate of a Lender).

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.04.

“Swing Line Facility” means the revolving credit facility made available to the U.S. Borrower by the Swing Line Lender pursuant to Section 2.04.

“Swing Line Lender” means DBNY, in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.

“Swing Line Loan” has the meaning specified in Section 2.04(a).

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b), which, if in writing, shall be substantially in the form of Exhibit B.

“Swing Line Note” means the promissory note of the U.S. Borrower payable to the Swing Line Lender or its registered assigns, in substantially the form of Exhibit C-5 hereto, evidencing the aggregate Indebtedness of the U.S. Borrower to the Swing Line Lender resulting from Swing Line Loans made by the Swing Line Lender.

“Swing Line Obligations” means, as at any date of determination, the aggregate principal amount of all Swing Line Loans outstanding.

-46-

“Swing Line Sublimit” means an amount equal to the lesser of (a) $40,000,000 and (b) the aggregate amount of the Revolving Credit Commitments. The Swing Line Sublimit is part of, and not in addition to, the Revolving Credit Commitments.

“Taxes” has the meaning specified in Section 3.01(a).

“Term Commitment” means a U.S. Term Commitment, a P.R. Term Commitment or both, as the context may require.

“Term Loan” means a U.S. Term Loan, a P.R. Term Note or both, as the context may require.

“Term Note” means a U.S. Term Note, a P.R. Term Note or both, as the context may require.

“Test Period” means, for any determination under this Agreement, the four consecutive fiscal quarters of the U.S. Borrower then last ended.

“Third Party Financing” has the meaning specified in Section 7.13.

“Third Party Financing Documentation” means any documentation governing any Third Party Financing.

“Threshold Amount” means $40,000,000.

“TL Repayment Percentage” of any Tranche of Term Loans at any time shall be a fraction (expressed as a percentage) (x) the numerator of which is the aggregate principal amount of outstanding Term Loans of such Tranche and (y) the denominator of which is the sum of the aggregate principal amount of all outstanding Term Loans at such time.

“Total Leverage Ratio” means, with respect to any Test Period, the ratio of (a) Consolidated Total Debt as of the last day of such Test Period to (b) Consolidated EBITDA for such Test Period.

“Total Outstandings” means, at any time, the sum of (i) the aggregate Outstanding Amount of all Loans at such time plus (ii) the aggregate Outstanding Amount of all L/C Obligations at such time.

“Tranche” means a category of Commitments or Credit Extensions thereunder. For purposes hereof, each of the following comprises a separate Tranche: (a) the unused Revolving Commitments, the outstanding Revolving Credit Loans, the outstanding Swing Line Loans and L/C Obligations in respect of Letters of Credit, (b) the outstanding U.S. Tranche A Term Loans, (c) the U.S. Tranche B Term Loans and (d) the outstanding P.R. Term Loans.

“Transaction” means, collectively, (a) the Spin-off, (b) the funding of the Term Loans and Revolving Credit Loans (if any) on the Closing Date, (c) the Refinancing, (d) the consummation of any other transactions in connection with the foregoing (including, without limitation, the transactions consummated pursuant to the Separation Documents, as same are in effect on the date hereof), and (e) the payment of the fees and expenses incurred in connection with any of the foregoing.

-47-

“Transaction Expenses” means any fees or expenses incurred or paid by Holdings, the U.S. Borrower or any Restricted Subsidiary in connection with the Transaction, this Agreement and the other Loan Documents and the transactions contemplated hereby and thereby.

“Type” means, with respect to a Loan its character as a Base Rate Loan or a Eurocurrency Rate Loan.

“Unaudited Financial Statements” has the meaning set forth in Section 4.01(e).

“Unfunded Current Liability” of any Pension Plan means the amount, if any, by which the value of the accumulated plan benefits under the Pension Plan determined on a plan termination basis in accordance with actuarial assumptions at such time consistent with those prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds the fair market value of all plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions).

“Uniform Commercial Code” means the Uniform Commercial Code as the same may from time to time be in effect in the State of New York or the Uniform Commercial Code (or similar code or statute) of another jurisdiction (including, without limitation, Puerto Rico), to the extent it may be required to apply to any item or items of Collateral.

“United States” and “U.S.” mean the United States of America.

“Unreimbursed Amount” has the meaning set forth in Section 2.03(c)(i).

“Unrestricted” means, when referring to cash or Cash Equivalents of Holdings or any of its Subsidiaries, that such cash or Cash Equivalents are not Restricted.

“Unrestricted Subsidiary” means (i) each Subsidiary of the U.S. Borrower listed on Schedule 1.01D and (ii) any Subsidiary of the U.S. Borrower designated by the board of directors of Holdings or the U.S. Borrower as an Unrestricted Subsidiary pursuant to Section 6.14 subsequent to the date hereof.

“U.S. Borrower” has the meaning specified in the introductory paragraph to this Agreement.

“U.S. Borrower Guaranteed Obligations” means the principal and interest on each P.R. Term Note and each P.R. Term Loan made under this Agreement, together with all the other obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities (including, without limitation, indemnities, fees and interest thereon) of the P.R. Borrower to each Lender, each Agent, each L/C Issuer and the Collateral Agent now existing or hereafter incurred under, arising out of or in connection with this Agreement or any other Loan Document and the due performance and compliance by the P.R. Borrower with all the terms, conditions and agreements contained in the Loan Documents to which it is a party.

-48-

“U.S. Borrower Guaranty” has the meaning provided in Section 10.01.

“U.S. Intellectual Property Security Agreement” means the U.S. Intellectual Property Security Agreement, substantially in the form attached as Exhibit J-1.

“U.S. Lender” has the meaning set forth in Section 3.01(k).

“U.S. Loan Parties” means, collectively, Holdings, the U.S. Borrower and each U.S. Subsidiary Guarantor.

“U.S. Security Agreement” means, collectively, the U.S. Security Agreement executed by the U.S. Loan Parties, substantially in the form of Exhibit G-1, together with each other security agreement supplement executed and delivered pursuant to Section 6.11.

“U.S. Subsidiary Guarantor” means, collectively, the Subsidiaries of the U.S. Borrower that are Guarantors.

“U.S. Subsidiary Guaranty” means, collectively, (a) the U.S. Subsidiary Guaranty made by the U.S. Subsidiary Guarantors in favor of the Administrative Agent on behalf of the Secured Parties, substantially in the form of Exhibit F-1 and (b) each other guaranty and guaranty supplement delivered by the U.S. Subsidiary Guarantors pursuant to Section 6.11.

“U.S. Term Borrowing” means a U.S. Tranche A Term Borrowing, a U.S. Tranche B Term Borrowing or both, as the context may require.

“U.S. Term Commitment” means a U.S. Tranche A Term Commitment, a U.S. Tranche B Term Commitment or both, as the context may require.

“U.S. Term Lender” means a U.S. Tranche A Term Lender, a U.S. Tranche B Term Lender or both, as the context may require.

“U.S. Term Loan” means a U.S. Tranche A Term Loan, a U.S. Tranche B Term Loan or both, as the context may require.

“U.S. Term Note” means a U.S. Tranche A Term Note, a U.S. Tranche B Term Note or both, as the context may require.

“U.S. Tranche A Term Borrowing” means a borrowing consisting of simultaneous U.S. Tranche A Term Loans of the same Type and, in the case of Eurocurrency Rate Loans, having the same Interest Period made by each of the U.S. Tranche A Term Lenders pursuant to Section 2.01(a)(i).

“U.S. Tranche A Term Commitment” means, as to each U.S. Tranche A Term Lender, its obligation to make a U.S. Tranche A Term Loan to the U.S. Borrower pursuant to Section 2.01(a)(i) in an aggregate principal amount not to exceed the amount set forth opposite

-49-

such Lender’s name on Schedule 2.01 under the caption “U.S. Tranche A Term Commitment” or in the Assignment and Assumption pursuant to which such U.S. Tranche A Term Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement. The initial aggregate amount of the U.S. Tranche A Term Commitments is $565,000,000.

“U.S. Tranche A Term Lender” means, at any time, any Lender that has a U.S. Tranche A Term Commitment or a U.S. Tranche A Term Loan at such time.

“U.S. Tranche A Term Loan” means a Loan made pursuant to Section 2.01(a)(i).

“U.S. Tranche A Term Note” means a promissory note of the U.S. Borrower payable to any U.S. Tranche A Term Lender or its registered assigns, in substantially the form of Exhibit C-1 hereto, evidencing the aggregate Indebtedness of the U.S. Borrower to such U.S. Tranche A Term Lender resulting from the U.S. Tranche A Term Loans made by such U.S. Tranche A Term Lender.

“U.S. Tranche B Term Borrowing” means a borrowing consisting of simultaneous U.S. Tranche B Term Loans of the same Type and, in the case of Eurocurrency Rate Loans, having the same Interest Period made by each of the U.S. Tranche B Term Lenders pursuant to Section 2.01(a)(ii).

“U.S. Tranche B Term Commitment” means, as to each U.S. Tranche B Term Lender, its obligation to make a U.S. Tranche B Term Loan to the U.S. Borrower pursuant to Section 2.01(a)(ii) in an aggregate principal amount not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “U.S. Tranche B Term Commitment” or in the Assignment and Assumption pursuant to which such U.S. Tranche B Term Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement. The initial aggregate amount of the U.S. Tranche B Term Commitments is $400,000,000.

“U.S. Tranche B Term Lender” means, at any time, any Lender that has a U.S. Tranche B Term Commitment or a U.S. Tranche B Term Loan at such time.

“U.S. Tranche B Term Loan” means a Loan made pursuant to Section 2.01(a)(ii).

“U.S. Tranche B Term Note” means a promissory note of the U.S. Borrower payable to any U.S. Tranche B Term Lender or its registered assigns, in substantially the form of Exhibit C-2 hereto, evidencing the aggregate Indebtedness of the U.S. Borrower to such U.S. Tranche B Term Lender resulting from the U.S. Tranche B Term Loans made by such U.S. Tranche B Term Lender.

“Waivable Repayment” has the meaning set forth in Section 2.05(b)(ix).

“WCM” means Wachovia Capital Markets, LLC, in its individual capacity and any successor thereto by merger, consolidation or otherwise.

-50-

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (i) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (ii) the then outstanding principal amount of such Indebtedness.

“wholly owned” means, with respect to a Subsidiary of a Person, a Subsidiary of such Person all of the outstanding Equity Interests of which (other than (x) director’s qualifying shares and (y) shares issued to foreign nationals to the extent required by applicable Law) are owned by such Person and/or by one or more wholly owned Subsidiaries of such Person.

SECTION 1.02. Other Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

(a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

(b) (i) The words “herein”, “hereto”, “hereof” and “hereunder” and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision hereof or thereof.

(ii) Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears.

(iii) The term “including” is by way of example and not limitation.

(iv) The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

(c) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”; and the word “through” means “to and including”.

(d) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

SECTION 1.03. Accounting Terms. (a) All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.

-51-

(b) Notwithstanding anything to the contrary herein, for purposes of determining compliance with any test or covenant contained in this Agreement with respect to any period during which any Specified Transaction occurs, the Total Leverage Ratio and Senior Secured Leverage Ratio shall be calculated with respect to such period and such Specified Transaction on a Pro Forma Basis.

SECTION 1.04. Rounding. Any financial ratios required to be satisfied by the U.S. Borrower in order for a specific action to be permitted under this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

SECTION 1.05. References to Agreements, Laws, Etc. Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, amendment and restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, amendment and restatements, extensions, supplements and other modifications are permitted by any Loan Document; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.

SECTION 1.06. Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

SECTION 1.07. Timing of Payment of Performance. When the payment of any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment (other than as described in the definition of Interest Period) or performance shall extend to the immediately succeeding Business Day.

SECTION 1.08. Currency Equivalents Generally. Any amount specified in this Agreement (other than in Articles 2, 9 and 10) or any of the other Loan Documents to be in Dollars shall also include the equivalent of such amount in any currency other than Dollars, such equivalent amount to be determined at the rate of exchange quoted by the Reuters World Currency Page for the applicable currency at 11:00 a.m. (London time) on such day (or, in the event such rate does not appear on any Reuters World Currency Page, by reference to such other publicly available service for displaying exchange rates as may be agreed upon by the Administrative Agent and the U.S. Borrower, or, in the absence of such agreement, such rate shall instead be the arithmetic average of the spot rates of exchange of the Administrative Agent in the market where its foreign currency exchange operations in respect of such currency are then being conducted, at or about 10:00 a.m. (New York City time) on such date for the purchase of Dollars for delivery two Business Days later). Notwithstanding the foregoing, for purposes of determining compliance with Sections 7.01, 7.02 and 7.03 with respect to any amount of Indebtedness or Investment in a currency other than Dollars, no Default shall be deemed to have occurred solely as a result of changes in rates of exchange occurring after the time such Indebtedness or Investment is incurred; provided that, for the avoidance of doubt, the foregoing provisions of this Section 1.08 shall otherwise apply to such Sections, including with respect to determining whether any Indebtedness or Investment may be incurred at any time under such Sections.

-52-

SECTION 1.09. Change of Currency. Each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify with the Borrowers’ consent to appropriately reflect a change in currency of any country and any relevant market conventions or practices relating to such change in currency.

ARTICLE II

The Commitments and Credit Extensions

SECTION 2.01. The Loans. (a) The Term Borrowings. (i) Subject to the terms and conditions set forth herein, each U.S. Tranche A Term Lender severally agrees to make to the U.S. Borrower a single loan denominated in Dollars in a principal amount equal to such U.S. Tranche A Term Lender’s U.S. Tranche A Term Commitment on the Closing Date. Amounts borrowed under this Section 2.01(a)(i) and repaid or prepaid may not be reborrowed. U.S. Tranche A Term Loans may be Base Rate Loans or Eurocurrency Rate Loans, as further provided herein.

(ii) Subject to the terms and conditions set forth herein, each U.S. Tranche B Term Lender severally agrees to make to the U.S. Borrower a single loan denominated in Dollars in a principal amount equal to such U.S. Tranche B Term Lender’s U.S. Tranche B Term Commitment on the Closing Date. Amounts borrowed under this Section 2.01(a)(ii) and repaid or prepaid may not be reborrowed. U.S. Tranche B Term Loans may be Base Rate Loans or Eurocurrency Rate Loans, as further provided herein.

(iii) Subject to the terms and conditions set forth herein, each P.R. Term Lender severally agrees to make to the P.R. Borrower a single loan denominated in Dollars in a principal amount equal to such P.R. Term Lender’s P.R. Term Commitment on the Closing Date. Amounts borrowed under this Section 2.01(a)(iii) and repaid or prepaid may not be reborrowed. P.R. Term Loans may be Base Rate Loans or Eurocurrency Rate Loans, as further provided herein.

(b) The Revolving Credit Borrowings. Subject to the terms and conditions set forth herein, each Revolving Credit Lender severally agrees to make loans denominated in Dollars to the U.S. Borrower (each such loan, a “Revolving Credit Loan”) from time to time, on any Business Day during the period from the Closing Date until the Maturity Date with respect to the Revolving Credit Facility, in an aggregate principal amount not to exceed at any time outstanding the amount of such Lender’s Revolving Credit Commitment; provided that after giving effect to any Revolving Credit Borrowing, the aggregate Outstanding Amount of the Revolving Credit Loans of any Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus such Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Revolving Credit Commitment. Within the limits of each Lender’s Revolving Credit Commitment, and subject to the other terms and conditions hereof, the U.S. Borrower may borrow under this Section 2.01(b), prepay under Section 2.05, and reborrow under this Section 2.01(b). Revolving Credit Loans may be Base Rate Loans or Eurocurrency Rate Loans, as further provided herein.

-53-

SECTION 2.02. Borrowings, Conversions and Continuations of Loans. (a) Each U.S. Tranche A Term Borrowing, each U.S. Tranche B Term Borrowing, each P.R. Term Borrowing, each Revolving Credit Borrowing, each conversion of U.S. Tranche A Term Loans, U.S. Tranche B Term Loans, P.R. Term Loans or Revolving Credit Loans from one Type to the other, and each continuation of Eurocurrency Rate Loans as such shall be made upon the applicable Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than 1:30 p.m. (New York City time) (i) three (3) Business Days prior to the requested date of any Borrowing or continuation of Eurocurrency Rate Loans or any conversion of Base Rate Loans to Eurocurrency Rate Loans, and (ii) one (1) Business Day before the requested date of any Borrowing of Base Rate Loans or conversion of any Eurocurrency Rate Loans to Base Rate Loans. Each telephonic notice by a Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Loan Notice, appropriately completed and signed by a Responsible Officer of such Borrower. Each Borrowing of, conversion to or continuation of Eurocurrency Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple thereof. Except as provided in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $1,000,000 or a multiple of $500,000 in excess thereof. Each Loan Notice (whether telephonic or written) shall specify (i) (x) if made by the U.S. Borrower, whether the U.S. Borrower is requesting a U.S. Tranche A Term Borrowing, a U.S. Tranche B Term Borrowing, a Revolving Credit Borrowing, a conversion of U.S. Tranche A Term Loans, U.S. Tranche B Term Loans or Revolving Credit Loans from one Type to the other, or a continuation of Eurocurrency Rate Loans made to the U.S. Borrower, and (y) if made by the P.R. Borrower, whether the P.R. Borrower is requesting a P.R. Term Borrowing or a conversion of P.R. Term Loans from one Type to the other, or a continuation of Eurocurrency Rate Loans made to the P.R. Borrower, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing U.S. Tranche A Term Loans, U.S. Tranche B Term Loans, P.R. Term Loans or Revolving Credit Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the applicable Borrower fails to specify a Type of Loan in a Loan Notice or fails to give a timely notice requesting a conversion or continuation, then the applicable Term Loans or Revolving Credit Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurocurrency Rate Loans. If a Borrower requests a Borrowing of, conversion to, or continuation of Eurocurrency Rate Loans in any such Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one (1) month.

(b) Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Pro Rata Share of the applicable Class of Loans, and if no timely notice of a conversion or continuation is provided by a Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans or continuation described in Section 2.02(a). In the case of each Borrowing, each Appropriate

-54-

Lender shall make the amount of its Loan available to the Administrative Agent in Same Day Funds at the Administrative Agent’s Office not later than 1:30 p.m. on the Business Day specified in the applicable Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Credit Extension, Section 4.01), the Administrative Agent shall make all funds so received available to the applicable Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of such Borrower on the books of the Administrative Agent with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided the Administrative Agent by such Borrower; provided that if, on the date the Loan Notice with respect to such Borrowing is given by the U.S. Borrower, there are Swing Line Loans or L/C Borrowings outstanding, then the proceeds of such Borrowing shall be applied, first, to the payment in full of any such L/C Borrowings, second, to the payment in full of any such Swing Line Loans, and third, to the U.S. Borrower as provided above.

(c) Except as otherwise provided herein, a Eurocurrency Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurocurrency Rate Loan unless the applicable Borrower pays the amount due, if any, under Section 3.05 in connection therewith. During the existence of an Event of Default, the Administrative Agent or the Required Lenders may require that no Loans may be converted to or continued as Eurocurrency Rate Loans.

(d) The Administrative Agent shall promptly notify the applicable Borrower and Lenders of the interest rate applicable to any Interest Period for Eurocurrency Rate Loans upon determination of such interest rate. The determination of the Eurocurrency Rate by the Administrative Agent shall be conclusive in the absence of manifest error. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the applicable Borrower and Lenders of any change in the Administrative Agent’s prime rate used in determining the Base Rate promptly following the public announcement of such change. All computations of interest hereunder shall be made in accordance with Section 2.8 and Section 2.10 hereunder.

(e) After giving effect to all U.S. Tranche A Term Borrowings, all U.S. Tranche B Term Borrowings, all P.R. Term Borrowings, all Revolving Credit Borrowings, all conversions of U.S. Tranche A Term Loans, U.S. Tranche B Term Loans, P.R. Term Loans or Revolving Credit Loans from one Type to the other, and all continuations of U.S. Tranche A Term Loans, U.S. Tranche B Term Loans, P.R. Term Loans or Revolving Credit Loans as the same Type, at no time shall there be more than fifteen (15) Interest Periods in effect.

(f) The failure of any Lender to make the Loan to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Loan on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Loan to be made by such other Lender on the date of any Borrowing.

SECTION 2.03. Letters of Credit. (a) The Letter of Credit Commitment. (i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the other Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit, on a sight basis, denominated in Dollars and for the

-55-

account of the U.S. Borrower (provided that any Letter of Credit may be for the benefit of any Restricted Subsidiary of the U.S. Borrower) and to amend, renew or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (2) to honor drafts under the Letters of Credit and (B) the Revolving Credit Lenders severally agree to participate in Letters of Credit issued pursuant to this Section 2.03; provided that no L/C Issuer shall be obligated to make any L/C Credit Extension with respect to any Letter of Credit, and no Lender shall be obligated to participate in any Letter of Credit if as of the date of such L/C Credit Extension (x) the Revolving Credit Exposure of any Lender would exceed such Lender’s Revolving Credit Commitment or (y) the Outstanding Amount of the L/C Obligations would exceed the Letter of Credit Sublimit. Within the foregoing limits, and subject to the terms and conditions hereof, the U.S. Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the U.S. Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.

(ii) An L/C Issuer shall be under no obligation to issue any Letter of Credit if:

(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or direct that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date (for which such L/C Issuer is not otherwise compensated hereunder);

(B) subject to Section 2.03(b)(iii), the expiry date of such requested Letter of Credit would occur (i) in the case of standby Letters of Credit, more than twelve months after the date of issuance or last renewal thereof and (ii) in the case of a commercial Letter of Credit, more than 180 days after the date of issuance or last renewal thereof, unless, in each case, the relevant L/C Issuer has approved such expiry date;

(C) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless the relevant L/C Issuer has approved such expiry date;

(D) the issuance of such Letter of Credit would violate any Laws binding upon such L/C Issuer;

(E) any Revolving Credit Lender is a Defaulting Lender at such time, unless such L/C Issuer has entered into arrangements reasonably satisfactory to it and the U.S. Borrower to eliminate such L/C Issuer’s risk with respect to the participation in Letters of Credit by such Defaulting Lender, including by cash collateralizing such Defaulting Lender’s Pro Rata Share of the L/C Obligations; or

-56-

(F) the expiry date of such requested Letter of Credit would occur after the Maturity Date with respect to the Revolving Credit Facility, unless all the Revolving Credit Lenders have approved such expiry date or unless the Revolving Credit Lenders cease to hold a participation in, and to be obligated in any manner to reimburse or otherwise indemnify the relevant L/C Issuer for any amounts drawn under, such Letter of Credit and the relevant L/C Issuer has approved such expiry date.

(iii) An L/C Issuer shall be under no obligation to amend or extend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Renewal Letters of Credit. (i) Each Letter of Credit shall be issued, extended or amended, as the case may be, upon the request of the U.S. Borrower delivered to an L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the U.S. Borrower. Such Letter of Credit Application must be received by the relevant L/C Issuer and the Administrative Agent not later than 1:30 p.m. at least two (2) Business Days prior to the proposed issuance date or date of amendment or extension, as the case may be or, in each case, such later date and time as the relevant L/C Issuer may agree in a particular instance in its sole discretion. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the relevant L/C Issuer: (a) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (b) the amount thereof; (c) the expiry date thereof; (d) the name and address of the beneficiary thereof; (e) the documents to be presented by such beneficiary in case of any drawing thereunder; (f) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder, and (g) such other matters as the relevant L/C Issuer may reasonably request. In the case of a request for an amendment or extension of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the relevant L/C Issuer (1) the Letter of Credit to be amended or extended; (2) the proposed date of amendment or extension thereof (which shall be a Business Day); (3) the nature of the proposed amendment or the length of extension and (4) such other matters as the relevant L/C Issuer may reasonably request.

(ii) Promptly after receipt of any Letter of Credit Application, the relevant L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the U.S. Borrower and, if not, such L/C Issuer will provide the Administrative Agent with a copy thereof. Upon receipt by the relevant L/C Issuer of confirmation from the Administrative Agent that the requested issuance, amendment or extension is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, such L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the U.S. Borrower or enter into the applicable amendment or extension, as the case may be.

-57-

Immediately upon the issuance of each Letter of Credit, each Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the relevant L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Lender’s Pro Rata Share multiplied by the amount of such Letter of Credit.

(iii) If the U.S. Borrower so requests in any applicable Letter of Credit Application, the relevant L/C Issuer shall agree to issue a Letter of Credit that has automatic renewal provisions (each, an “Auto-Renewal Letter of Credit”); provided that any such Auto-Renewal Letter of Credit must permit the relevant L/C Issuer to prevent any such renewal at least once in each twelve month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Nonrenewal Notice Date”) in each such twelve month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the relevant L/C Issuer, the U.S. Borrower shall not be required to make a specific request to the relevant L/C Issuer for any such renewal. Once an Auto-Renewal Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the relevant L/C Issuer to permit the renewal of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided that the relevant L/C Issuer shall not permit any such renewal if (A) the relevant L/C Issuer has determined that it would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms hereof (by reason of the provisions of Section 2.03(a)(ii) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is five (5) Business Days before the Nonrenewal Notice Date from the Administrative Agent, any Revolving Credit Lender or the U.S. Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied.

(iv) Promptly after its delivery of any Letter of Credit or any amendment or extension to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the relevant L/C Issuer will also deliver to the U.S. Borrower and the Administrative Agent a true and complete copy of such Letter of Credit, amendment or extension.

(c) Drawings and Reimbursements; Funding of Participations. (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the relevant L/C Issuer shall notify promptly the U.S. Borrower and the Administrative Agent thereof. Not later than 11:00 a.m. on the Business Day immediately following any payment by an L/C Issuer under a Letter of Credit (each such date, an “Honor Date”), the U.S. Borrower shall reimburse such L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing, with interest on the amount so paid or disbursed by such L/C Issuer, to the extent not reimbursed on the date of such payment or disbursement. If the U.S. Borrower fails to so reimburse such L/C Issuer by such time, the Administrative Agent shall promptly notify each Appropriate Lender of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such Appropriate Lender’s Pro Rata Share thereof. In such event, the U.S. Borrower shall be deemed to have requested a Revolving Credit Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in

-58-

Section 2.02 for the principal amount of Base Rate Loans but subject to the amount of the unutilized portion of the Revolving Credit Commitments of the Appropriate Lenders and the conditions set forth in Section 4.02 (other than the delivery of a Loan Notice). Any notice given by an L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

(ii) Each Appropriate Lender (including any Lender acting as an L/C Issuer) shall upon any notice pursuant to Section 2.03(c)(i) make funds available to the Administrative Agent for the account of the relevant L/C Issuer, in Dollars, at the Administrative Agent’s Office for payments in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Appropriate Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the U.S. Borrower in such amount. The Administrative Agent shall remit the funds so received to the relevant L/C Issuer.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Revolving Credit Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the U.S. Borrower shall be deemed to have incurred from the relevant L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Appropriate Lender’s payment to the Administrative Agent for the account of the relevant L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03.

(iv) Until each Appropriate Lender funds its Revolving Credit Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the relevant L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Pro Rata Share of such amount shall be solely for the account of the relevant L/C Issuer.

(v) Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or L/C Advances to reimburse an L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the relevant L/C Issuer, the U.S. Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided that each Revolving Credit Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.02 (other than delivery by the U.S. Borrower of a Loan Notice). No making of an L/C Advance shall relieve or otherwise impair the obligation of the U.S. Borrower to reimburse the relevant L/C Issuer for the amount of any payment made by such L/C Issuer under any Letter of Credit, together with interest as provided herein.

-59-

(vi) If any Revolving Credit Lender fails to make available to the Administrative Agent for the account of the relevant L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), such L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to such L/C Issuer at a rate per annum equal to the Federal Funds Rate for the first three days and equal to the rate applicable to Revolving Credit Loans that are maintained as Base Rate Loans for each day thereafter. A certificate of the relevant L/C Issuer submitted to any Revolving Credit Lender (through the Administrative Agent) with respect to any amounts owing under this Section 2.03(c)(vi) shall be conclusive absent manifest error.

(d) Repayment of Participations. (i) If, at any time after an L/C Issuer has made a payment under any Letter of Credit and has received from any Revolving Credit Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c), the Administrative Agent receives for the account of such L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the U.S. Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Pro Rata Share thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s L/C Advance was outstanding) in the same funds as those received by the Administrative Agent.

(ii) If any payment received by the Administrative Agent for the account of an L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in Section 12.06 (including pursuant to any settlement entered into by such L/C Issuer in its discretion), each Appropriate Lender shall pay to the Administrative Agent for the account of such L/C Issuer its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate for the first three days and equal to the rate applicable to Revolving Credit Loans that are maintained as Base Rate Loans for each day thereafter.

(e) Obligations Absolute. The obligation of the U.S. Borrower to reimburse the relevant L/C Issuer for each drawing under each Letter of Credit issued by it and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;

(ii) the existence of any claim, counterclaim, setoff, defense or other right that any Loan Party may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the relevant L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

-60-

(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

(iv) any payment by the relevant L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the relevant L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law;

(v) any exchange, release or nonperfection of any Collateral, or any release or amendment or waiver of or consent to departure from any Guaranty or any other guarantee, for all or any of the Obligations any Loan Party in respect of such Letter of Credit; or

(vi) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Loan Party;

provided that the foregoing shall not excuse any L/C Issuer from liability to the U.S. Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are waived by the U.S. Borrower to the extent permitted by applicable Law) suffered by the U.S. Borrower that are caused by such L/C Issuer’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction by final and nonappealable judgment) when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.

(f) Role of L/C Issuers. Each Lender and the U.S. Borrower agree that, in paying any drawing under a Letter of Credit, the relevant L/C Issuer shall not have any responsibility to obtain any document (other than any draft, demand, certificate or other document expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuers, any Agent-Related Person nor any of the respective correspondents, participants or assignees of any L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct (as determined by a court of competent jurisdiction by final and nonappealable judgment); or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Letter of Credit Application. The U.S. Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided that this assumption is not intended to, and shall not, preclude the U.S. Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the L/C Issuers, any Agent-Related Person, nor any of the respective

-61-

correspondents, participants or assignees of any L/C Issuer, shall be liable or responsible for any of the matters described in clauses (i) through (vi) of Section 2.03(e); provided that anything in such clauses to the contrary notwithstanding, the U.S. Borrower may have a claim against an L/C Issuer, and such L/C Issuer may be liable to the U.S. Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the U.S. Borrower which the U.S. Borrower proves were caused by such L/C Issuer’s bad faith, willful misconduct, fraud or gross negligence or such L/C Issuer’s bad faith or willful or grossly negligent failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit (in each case, as are determined by a court of competent jurisdiction by final and nonappealable judgment). In furtherance and not in limitation of the foregoing, each L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and no L/C Issuer shall be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

(g) Cash Collateral. (i) If an L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing and the conditions set forth in Section 4.02 to a Revolving Credit Borrowing cannot then be met, (ii) if, as of the Letter of Credit Expiration Date, any Letter of Credit may for any reason remain outstanding and partially or wholly undrawn, (iii) if any Event of Default occurs and is continuing and the Administrative Agent or the Required Lenders, as applicable, require the U.S. Borrower to Cash Collateralize the L/C Obligations pursuant to Section 8.02(c) or (iv) an Event of Default set forth under Section 8.01(f) occurs and is continuing, then the U.S. Borrower shall Cash Collateralize the then Outstanding Amount of all L/C Obligations (in an amount equal to such Outstanding Amount determined as of the date of such L/C Borrowing, the Letter of Credit Expiration Date, the date such determination to require Cash Collateral is made or the date of such Event of Default under Section 8.1(f), as the case may be), and shall do so not later than 2:00 P.M., New York City time, on (x) in the case of the immediately preceding clauses (i) through (iii), (1) the Business Day that the U.S. Borrower receives notice thereof, if such notice is received on such day prior to 12:00 Noon, New York City time, or (2) if clause (1) above does not apply, the Business Day immediately following the day that the U.S. Borrower receives such notice and (y) in the case of the immediately preceding clause (iv), the Business Day on which an Event of Default set forth under Section 8.01(f) occurs or, if such day is not a Business Day, the Business Day immediately succeeding such day. For purposes hereof, “Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the relevant L/C Issuer and the Appropriate Lenders, as collateral for the L/C Obligations, cash or deposit account balances (“Cash Collateral”) pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and the relevant L/C Issuer (which documents are hereby consented to by the Lenders). Derivatives of such term have corresponding meanings. The U.S. Borrower hereby grants to the Administrative Agent, for the benefit of the L/C Issuers and the Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked accounts at the Administrative Agent and may be invested in readily available Cash Equivalents. If at any time the Administrative Agent determines that any funds held as Cash Collateral are subject to any right or claim of any Person other than the Administrative Agent (on

-62-

behalf of the Secured Parties) or that the total amount of such funds is less than the aggregate Outstanding Amount of all L/C Obligations, the U.S. Borrower will, forthwith upon demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited and held in the deposit accounts at the Administrative Agent as aforesaid, an amount equal to the excess of (a) such aggregate Outstanding Amount over (b) the total amount of funds, if any, then held as Cash Collateral that the Administrative Agent reasonably determines to be free and clear of any such right and claim. Upon the drawing of any Letter of Credit for which funds are on deposit as Cash Collateral, such funds shall be applied, to the extent permitted under applicable Law, to reimburse the relevant L/C Issuer. To the extent the amount of any Cash Collateral exceeds the then Outstanding Amount of such L/C Obligations and so long as no Event of Default has occurred and is continuing, the excess shall be refunded to the U.S. Borrower.

(h) Letter of Credit Fees. The U.S. Borrower shall pay to the Administrative Agent for the account of each Revolving Credit Lender in accordance with its Pro Rata Share a Letter of Credit fee for each Letter of Credit issued pursuant to this Agreement equal to the Applicable Rate times the daily maximum amount then available to be drawn under such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of Credit, if such maximum amount increases periodically pursuant to the terms of such Letter of Credit). Such letter of credit fees shall be computed on a quarterly basis in arrears. Such letter of credit fees shall be due and payable in Dollars on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. If there is any change in the Applicable Rate during any quarter, the daily maximum amount of each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.

(i) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuers. The U.S. Borrower shall pay directly to each L/C Issuer for its own account a fronting fee with respect to each Letter of Credit issued by it equal to 0.125% per annum (or such other amount as is agreed in a separate writing between the relevant L/C Issuer and the U.S. Borrower) of the daily maximum amount then available to be drawn under such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of Credit, if such maximum amount increases periodically pursuant to the terms of such Letter of Credit), provided that in any event the minimum amount of any fronting fee payable in any twelve-month period for each Letter of Credit shall be not less than $500 (it being agreed that, on the day of issuance of any Letter of Credit and on each anniversary thereof prior to the termination or expiration of such Letter of Credit, if $500 will exceed the amount of the applicable fronting fee that will accrue with respect to such Letter of Credit for the immediately succeeding twelve-month period, the full $500 shall be payable on the date of issuance of such Letter of Credit and on each such anniversary thereof). Except as contemplated by the proviso contained in the immediately preceding sentence, such fronting fees shall be (x) computed on a quarterly basis in arrears and (y) due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. In addition, the U.S. Borrower shall pay directly to each L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable within ten (10) Business Days of demand and are nonrefundable.

-63-

(j) Conflict with Letter of Credit Application. Notwithstanding anything else to the contrary in this Agreement, in the event of any conflict between the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control.

(k) Addition of an L/C Issuer. A Revolving Credit Lender may become an additional L/C Issuer hereunder pursuant to a written agreement among the U.S. Borrower, the Administrative Agent and such Revolving Credit Lender. The Administrative Agent shall notify the Revolving Credit Lenders of any such additional L/C Issuer.

SECTION 2.04. Swing Line Loans. (a) The Swing Line. Subject to the terms and conditions set forth herein, the Swing Line Lender agrees to make loans (each such loan, a “Swing Line Loan”) to the U.S. Borrower from time to time on any Business Day after the Closing Date until the Maturity Date in respect of the Revolving Credit Facility in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Pro Rata Share of the Outstanding Amount of Revolving Credit Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount of such Lender’s Revolving Credit Commitment; provided that, (i) except as otherwise provided above in this clause (a) after giving effect to any Swing Line Loan, in no event shall the aggregate Outstanding Amount of the Revolving Credit Loans of any Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus such Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Revolving Credit Commitment then in effect and (i) notwithstanding the foregoing, the Swing Line Lender shall not be obligated to make any Swing Line Loans at a time when any Revolving Credit Lender is a Defaulting Lender, unless the Swing Line Lender has entered into arrangements reasonably satisfactory to it and the U.S. Borrower to eliminate the Swing Line Lender’s risk with respect to such Defaulting Lender’s participation in such Swing Line Loans, including by cash collateralizing such Defaulting Lender’s or Defaulting Lenders’ Pro Rata Share of the outstanding Swing Line Loans; provided further that, the U.S. Borrower shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the foregoing limits, and subject to the other terms and conditions hereof, the U.S. Borrower may borrow under this Section 2.04, prepay under Section 2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall be a Base Rate Loan. Swing Line Loans shall only be denominated in Dollars. Immediately upon the making of a Swing Line Loan, each Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Lender’s Pro Rata Share times the amount of such Swing Line Loan.

(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the U.S. Borrower’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone. Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 2:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $100,000, and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be

-64-

confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the U.S. Borrower. Promptly after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Revolving Credit Lender) prior to 3:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of Section 2.04(a), or (B) that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 4:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the U.S. Borrower.

(c) Refinancing of Swing Line Loans. (i) The Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of the U.S. Borrower (which hereby irrevocably authorizes the Swing Line Lender to so request on its behalf), that each Revolving Credit Lender make a Base Rate Loan in an amount equal to such Lender’s Pro Rata Share of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized portion of the aggregate Revolving Credit Commitments and the conditions set forth in Section 4.02. The Swing Line Lender shall furnish the U.S. Borrower with a copy of the applicable Loan Notice promptly after delivering such notice to the Administrative Agent. Each Revolving Credit Lender shall make an amount equal to its Pro Rata Share of the amount specified in such Loan Notice available to the Administrative Agent in Same Day Funds for the account of the Swing Line Lender at the Administrative Agent’s Office not later than 1:00 p.m. on the day specified in such Loan Notice, whereupon, subject to Section 2.04(c)(ii), each Revolving Credit Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the U.S. Borrower in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender.

(ii) If for any reason any Swing Line Loan cannot be refinanced by such a Revolving Credit Borrowing in accordance with Section 2.04(c)(i), the request for Base Rate Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Revolving Credit Lenders fund its risk participation in the relevant Swing Line Loan and each Revolving Credit Lender’s payment to the Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such participation.

(iii) If any Revolving Credit Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to recover from such Lender

-65-

(acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the Federal Funds Rate for the first three days and equal to the rate applicable to Revolving Credit Loans that are maintained as Base Rate Loans for each day thereafter. A certificate of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

(iv) Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Swing Line Lender, the U.S. Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided that each Revolving Credit Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in Section 4.02. No such funding of risk participations shall relieve or otherwise impair the obligation of the U.S. Borrower to repay Swing Line Loans, together with interest as provided herein.

(d) Repayment of Participations. (i) At any time after any Revolving Credit Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Lender its Pro Rata Share of such payment (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s risk participation was funded) in the same funds as those received by the Swing Line Lender.

(ii) If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in Section 12.06 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Revolving Credit Lender shall pay to the Swing Line Lender its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the Federal Funds Rate for the first three days and equal to the rate applicable to Revolving Credit Loans that are maintained as Base Rate Loans for each day thereafter. The Administrative Agent will make such demand upon the request of the Swing Line Lender.

(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be responsible for invoicing the U.S. Borrower for interest on the Swing Line Loans. Until each Revolving Credit Lender funds its Base Rate Loan or risk participation pursuant to this Section 2.04 to refinance such Lender’s Pro Rata Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall be solely for the account of the Swing Line Lender.

-66-

(f) Payments Directly to Swing Line Lender. The U.S. Borrower shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.

SECTION 2.05. Prepayments. (a) Optional. (i) The Borrowers may, upon notice to the Administrative Agent, at any time or from time to time, without penalty or premium, voluntarily prepay (x) in the case of the P.R. Borrower, P.R. Term Loans or (y) in the case of the U.S. Borrower, U.S. Tranche A Term Loans, U.S. Tranche B Term Loans and Revolving Credit Loans in whole or in part without premium or penalty; provided that (1) such notice must be received by the Administrative Agent not later than 1:30 p.m. (New York City time) (A) three (3) Business Days prior to any date of prepayment of Eurocurrency Rate Loans and (B) on the date of prepayment of Base Rate Loans; (2) any prepayment of Eurocurrency Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple thereof; and (3) any prepayment of Base Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment, the Class(es) and Type(s) of Loans to be prepaid and, in the case of a prepayment of Term Loans, the manner in which such prepayment shall be applied to repayments thereof required pursuant to Sections 2.07(a), (b) or (c); provided that (1) in the event such notice of prepayment of Term Loans fails to specify the manner in which the respective prepayment of Term Loans will apply to each Tranche thereof, such prepayment shall apply to pro rata each Tranche of Term Loans (based upon the TL Percentage of the various Tranches of outstanding Term Loans) and (2) in the event such notice fails to specify the manner in which the respective prepayment of Term Loans shall be applied to repayments thereof required pursuant to Sections 2.07(a), (b) or (c), as the case may be, such prepayment of Term Loans shall be applied in direct order of maturity to repayments thereof required pursuant to Sections 2.07(a), (b) or (c), as the case may be. The Administrative Agent will promptly notify each Appropriate Lender of its receipt of each such notice, and of the amount of such Lender’s Pro Rata Share of such prepayment. Any prepayment of a Eurocurrency Rate Loan shall be accompanied by all accrued interest thereon, together with any additional amounts required pursuant to Section 3.05. Subject to the last sentence of this Section 2.05(a)(i), each prepayment of the Loans pursuant to this Section 2.05(a) shall be paid to the Appropriate Lenders in accordance with their respective Pro Rata Shares; provided that at the U.S. Borrower’s election in connection with any prepayment of Revolving Credit Loans pursuant to this Section 2.05(a), so long as no Default then exists, such prepayment shall not be applied to any Revolving Credit Loan of a Defaulting Lender.

(ii) The U.S. Borrower may, upon notice to the Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (1) such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:30 p.m. on the date of the prepayment, and (2) any such prepayment shall be in a minimum principal amount of $100,000 or a whole multiple of $100,000 in excess thereof or, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment. If such notice is given by the U.S. Borrower, the U.S. Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.

-67-

(b) Mandatory. (i) Within five (5) Business Days after financial statements have been delivered pursuant to Section 6.01(a) and the related Compliance Certificate has been delivered pursuant to Section 6.02(b), the Borrowers shall cause to be prepaid an aggregate principal amount of Term Loans in an amount equal to (A) 50% of Excess Cash Flow, if any, for the fiscal year covered by such financial statements (commencing with the fiscal year ended December 31, 2008) minus (B) the sum of (1) all voluntary prepayments of Term Loans during such fiscal year and (2) all voluntary prepayments of Revolving Credit Loans during such fiscal year to the extent the Revolving Credit Commitments are permanently reduced by the amount of such payments, in the case of each of the immediately preceding clauses (1) and (2), to the extent such prepayments are not funded with the proceeds of Indebtedness; provided that so long as no Default then exists, no payment of any Loans shall be required under this Section 2.05(b)(i) if the Total Leverage Ratio with respect to the Test Period ended as of the last day of the fiscal year covered by such financial statements is less than 3.75:1.00.

(ii) If (x) Holdings, any Borrower or any Restricted Subsidiary Disposes of any property or assets (other than any Disposition of any property or assets permitted by Section 7.05(a), (b), (c), (d) (to the extent constituting a Disposition by any Restricted Subsidiary to a Loan Party), (e), (f)(i), (g), (h), (i), (j) or (m)) or (y) any Casualty Event occurs, which in the aggregate results in the realization or receipt by Holdings, such Borrower or such Restricted Subsidiary of Net Cash Proceeds, the Borrowers shall cause to be prepaid on or prior to the date which is ten (10) Business Days after the date of the realization or receipt of such Net Cash Proceeds an aggregate principal amount of Term Loans in an amount equal to 100% of all Net Cash Proceeds received; provided that (I) no such prepayment shall be required pursuant to this Section 2.05(b)(ii)(A) with respect to such portion of such Net Cash Proceeds that the U.S. Borrower shall have, on or prior to such date, given written notice to the Administrative Agent of its intent to reinvest in accordance with Section 2.05(b)(ii)(B) (which notice may only be provided if no Event of Default has occurred and is then continuing) and (II) the percentage of Net Cash Proceeds specified above shall instead be 75% if no Default then exists and the Total Leverage Ratio with respect to the Test Period ended as of the last day of the fiscal year covered by such financial statements is less than 3.75 : 1.00;

(A) With respect to any Net Cash Proceeds realized or received with respect to any Disposition (other than any Disposition specifically excluded from the application of Section 2.05(b)(ii)(A)) or any Casualty Event, at the option of the U.S. Borrower, the U.S. Borrower may reinvest all or any portion of such Net Cash Proceeds in assets useful for its or its Restricted Subsidiaries’ business within (x) eighteen (18) months following receipt of such Net Cash Proceeds or (y) if the U.S. Borrower enters into a legally binding commitment to reinvest (including pursuant to a Restoration Certificate) such Net Cash Proceeds within eighteen (18) months following receipt thereof, within the later of (1) one hundred eighty (180) days of the date of such legally binding commitment and (2) eighteen (18) months following receipt of such Net Cash Proceeds; provided that (i) so long as an Event of Default shall have occurred and be continuing, the U.S. Borrower shall not be permitted to make any such reinvestments (other than pursuant to a legally binding commitment that the U.S. Borrower entered into at a time when no Event of Default is continuing) and (ii) if any Net Cash Proceeds are no longer intended to be or cannot be so reinvested at any time after delivery of a notice of reinvestment election, an amount equal to any such Net Cash Proceeds shall be applied to the prepayment of the Term Loans as set forth in this Section 2.05 within five (5) Business Days after the U.S. Borrower reasonably determines that such Net Cash Proceeds are no longer intended to be or cannot be so reinvested.

-68-

(iii) If Holdings, any Borrower or any Restricted Subsidiary incurs or issues any Indebtedness not expressly permitted to be incurred or issued pursuant to Section 7.03, the Borrowers shall cause to be prepaid an aggregate principal amount of Term Loans in an amount equal to 100% of all Net Cash Proceeds received therefrom on or prior to the date which is five (5) Business Days after the receipt of such Net Cash Proceeds;

(iv) If for any reason the aggregate Revolving Credit Exposures at any time exceeds the aggregate Revolving Credit Commitments then in effect, the U.S. Borrower shall promptly prepay or cause to be promptly prepaid Revolving Credit Loans and Swing Line Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal to such excess; provided that the U.S. Borrower shall not be required to Cash Collateralize the L/C Obligations pursuant to this Section 2.05(b)(iv) unless after the prepayment in full of the Revolving Credit Loans and Swing Line Loans, such aggregate L/C Obligations exceeds the aggregate Revolving Credit Commitments then in effect.

(v) Each prepayment of Term Loans pursuant to this Section 2.05(b) shall be applied pro rata to each Tranche of Term Loans (based upon the TL Repayment Percentages of the various Tranches of outstanding Term Loans). Each prepayment of Term Loans shall within each Tranche be applied in direct order of maturity to repayments thereof required pursuant to Sections 2.07(a), (b) or (c); and each such prepayment shall be paid to the Lenders of such Tranche in accordance with their respective Pro Rata Shares, subject to clause (vi) of this Section 2.05(b).

(vi) The U.S. Borrower shall notify the Administrative Agent in writing of any mandatory prepayment of Term Loans required to be made pursuant to clauses (i) through (iii) of this Section 2.05(b) at least three (3) Business Days prior to the date of such prepayment. Each such notice shall specify the date of such prepayment and provide a reasonably detailed calculation of the amount of such prepayment. The Administrative Agent will promptly notify each Appropriate Lender of the contents of the U.S. Borrower’s prepayment notice and of such Appropriate Lender’s Pro Rata Share of the prepayment.

(vii) Funding Losses, Etc. All prepayments under this Section 2.05 shall be made together with, in the case of any such prepayment of a Eurocurrency Rate Loan on a date other than the last day of an Interest Period therefor, any amounts owing in respect of such Eurocurrency Rate Loan pursuant to Section 3.05. Notwithstanding any of the other provisions of Section 2.05(b), so long as no Event of Default shall have occurred and be continuing, if any prepayment of Eurocurrency Rate Loans is required to be made under this Section 2.05(b), other than on the last day of the Interest Period therefor, in lieu of making any payment pursuant to this Section 2.05(b) in respect of any such Eurocurrency Rate Loan other than on the last day of the Interest Period therefor, the U.S. Borrower or P.R. Borrower, as applicable, may, in its sole discretion, deposit the amount of any such prepayment otherwise required to be made thereunder into a Cash Collateral Account until the last day of such Interest Period, at which time the Administrative Agent shall be authorized (without any further action by or notice to or from any Borrower or any other Loan Party) to apply such amount to the prepayment of such Loans in

-69-

accordance with this Section 2.05(b). Upon the occurrence and during the continuance of any Event of Default, the Administrative Agent shall also be authorized (without any further action by or notice to or from any Borrower or any other Loan Party) to apply such amount to the prepayment of the outstanding Loans in accordance with this Section 2.05(b).

(viii) Foreign Asset Sales. Notwithstanding any other provisions of this Section 2.05(b), so long as no Event of Default has occurred and is continuing, to the extent that any of or all the Net Cash Proceeds of any Disposition by a Foreign Subsidiary giving rise to a prepayment event under Section 2.05(b)(ii) (a “Foreign Disposition”) or the Net Cash Proceeds of any Casualty Event from a Foreign Subsidiary (a “Foreign Casualty Event”) are prohibited or delayed by applicable local Law from being repatriated to the United States, the portion of such Net Cash Proceeds so affected will not be required to be applied to repay Term Loans at the times provided in this Section 2.05(b), but may be retained by the applicable Foreign Subsidiary so long, but only so long, as the applicable local Law will not permit repatriation to the United States (the U.S. Borrower hereby agreeing to cause the applicable Foreign Subsidiary to promptly take all actions required by the applicable local Law to permit such repatriation), and once such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local Law, such repatriation will be immediately effected and such repatriated Net Cash Proceeds will be promptly (and in any event not later than five Business Days after such repatriation) applied to the repayment of the Term Loans otherwise required pursuant to this Section 2.05(b) (without giving effect to this clause (viii)).

(ix) Notwithstanding anything to the contrary contained in Section 2.05 or elsewhere in this Agreement, the Borrowers shall have the option, in their sole discretion, to give the Lenders with outstanding Term Loans of any Tranche the option to waive a mandatory prepayment of such Term Loans pursuant to Section 2.05 (each such prepayment or repayment, a “Waivable Repayment”) upon the terms and provisions set forth in this clause (ix). If the Borrowers elect to exercise the option referred to in the preceding sentence, the Borrowers shall give to the Administrative Agent written notice of its intention to give the Lenders of the selected Tranche or Tranches the right to waive a Waivable Repayment at least five Business Days prior to such repayment, which notice the Administrative Agent shall promptly forward to all Lenders of the selected Tranche or Tranches (indicating in such notice the amount of such repayment to be applied to each such Lender’s outstanding Term Loans). Any offer by the Borrowers to permit such Lenders to waive any such Waivable Repayment may apply to all or part of such repayment, provided that any offer to waive part of such repayment must be made ratably to such Lenders on the basis of their outstanding Term Loans of the selected Tranche or Tranches. In the event any such Lender desires to waive such Lender’s right to receive any such Waivable Repayment in whole or in part, such Lender shall so advise the Administrative Agent no later than the close of business two Business Days after the date of such notice from the Administrative Agent, which notice shall also include the amount such Lender desires to receive in respect of such repayment. If any Lender does not reply to the Administrative Agent within the aforementioned two Business Day period, such Lender will be deemed not to have waived any part of such repayment. If any Lender does not specify an amount such Lender wishes to receive, it will be deemed to have waived 100% of the amount of its share of such payment. In the event that any such Lender waives all or part of such right to receive any such Waivable Repayment, the amount so waived shall be applied to the other Tranches of Term Loans pro rata (based on the TL Repayment Percentages of the various Tranches of outstanding Term Loans).

-70-

SECTION 2.06. Termination or Reduction of Commitments. (a) Optional. The U.S. Borrower or P.R. Borrower, as applicable, may, upon written notice to the Administrative Agent, terminate the unused Commitments of any Class, or from time to time permanently reduce the unused Commitments of any Class; provided that (i) any such notice shall be received by the Administrative Agent two (2) Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $1,000,000 or any whole multiple of $500,000 in excess thereof and (iii) if, after giving effect to any reduction of the Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit exceeds the amount of the Revolving Credit Facility, such sublimit shall be automatically reduced by the amount of such excess. Except as otherwise provided in this clause (a), the amount of any such Commitment reduction shall not be applied to the Letter of Credit Sublimit or the Swing Line Sublimit unless otherwise specified by the U.S. Borrower.

(b) Mandatory. The U.S. Tranche A Term Commitment of each U.S. Tranche A Term Lender shall be automatically and permanently reduced to $0 upon the making of such U.S. Tranche A Term Lender’s U.S. Tranche A Term Loans pursuant to Section 2.01(a)(i). The U.S. Tranche B Term Commitment of each U.S. Tranche B Term Lender shall be automatically and permanently reduced to $0 upon the making of such U.S. Tranche B Term Lender’s U.S. Tranche B Term Loans pursuant to Section 2.01(a)(ii). The P.R. Term Commitment of each P.R. Term Lender shall be automatically and permanently reduced to $0 upon the making of such P.R. Term Lender’s P.R. Term Loans pursuant to Section 2.01(a)(iii).

(c) Application of Commitment Reductions; Payment of Fees. The Administrative Agent will promptly notify the Lenders of any termination or reduction of unused portions of the Letter of Credit Sublimit, the Swing Line Sublimit or the unused Commitments of any Class under this Section 2.06. Upon any reduction of unused Commitments of any Class, the Commitment of each Lender of such Class shall be reduced by such Lender’s Pro Rata Share of the amount by which such Commitments are reduced (other than the termination of the Commitment of any Lender as provided in Section 3.07). All commitment fees accrued until the effective date of any termination of the Aggregate Commitments shall be paid on the effective date of such termination.

SECTION 2.07. Repayment of Loans. (a) U.S. Tranche A Term Loans. On each date set forth below, the U.S. Borrower shall repay to the Administrative Agent for the ratable account of the U.S. Tranche A Term Lenders that principal amount of U.S. Tranche A Term Loans, to the extent then outstanding (after giving effect to reductions as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.05), as is set forth opposite each such date below:

U.S. Tranche A Term Loan Repayment Date	Amount
March 31, 2009	$	5,000,000
June 30, 2009	$	5,000,000
September 30, 2009	$	5,000,000
December 31, 2009	$	5,000,000
March 31, 2010	$	22,500,000

-71-

U.S. Tranche A Term Loan Repayment Date	Amount
June 30, 2010	$	22,500,000
September 30, 2010	$	22,500,000
December 31, 2010	$	22,500,000
March 31, 2011	$	34,250,000
June 30, 2011	$	34,250,000
September 30, 2011	$	34,250,000
December 31, 2011	$	34,250,000
March 31, 2012	$	46,250,000
June 30, 2012	$	46,250,000
September 30, 2012	$	46,250,000
December 31, 2012	$	46,250,000
March 31, 2013	$	33,250,000
June 30, 2013	$	33,250,000
September 30, 2013	$	33,250,000
Maturity Date for U.S. Tranche A Term Loans	$	33,250,000

(b) U.S. Tranche B Term Loans. On each date set forth below, the U.S. Borrower shall repay to the Administrative Agent for the ratable account of the U.S. Tranche B Term Lenders that principal amount of U.S. Tranche B Term Loans, to the extent then outstanding (after giving effect to reductions as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.05), as is set forth opposite each such date below:

U.S. Tranche B Term Loan Repayment Date	Amount
March 31, 2008	$	1,000,000
June 30, 2008	$	1,000,000
September 30, 2008	$	1,000,000
December 31, 2008	$	1,000,000
March 31, 2009	$	1,000,000
June 30, 2009	$	1,000,000
September 30, 2009	$	1,000,000
December 31, 2009	$	1,000,000
March 31, 2010	$	1,000,000
June 30, 2010	$	1,000,000
September 30, 2010	$	1,000,000
December 31, 2010	$	1,000,000
March 31, 2011	$	1,000,000
June 30, 2011	$	1,000,000
September 30, 2011	$	1,000,000

-72-

U.S. Tranche B Term Loan Repayment Date	Amount
December 31, 2011	$	1,000,000
March 31, 2012	$	1,000,000
June 30, 2012	$	1,000,000
September 30, 2012	$	1,000,000
December 31, 2012	$	1,000,000
March 31, 2013	$	1,000,000
June 30, 2013	$	1,000,000
September 30, 2013	$	1,000,000
Maturity Date for U.S. Tranche B Term Loans	$	377,000,000

(c) P.R. Term Loans. On each date set forth below, the P.R. Borrower shall repay to the Administrative Agent for the ratable account of the P.R. Term Lenders that principal amount of P.R. Term Loans, to the extent then outstanding (after giving effect to reductions as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.05), as is set forth opposite each such date below:

P.R. Term Loan Repayment Date	Amount
March 31, 2009	$	250,000
June 30, 2009	$	250,000
September 30, 2009	$	250,000
December 31, 2009	$	250,000
March 31, 2010	$	1,500,000
June 30, 2010	$	1,500,000
September 30, 2010	$	1,500,000
December 31, 2010	$	1,500,000
March 31, 2011	$	2,250,000
June 30, 2011	$	2,250,000
September 30, 2011	$	2,250,000
December 31, 2011	$	2,250,000
March 31, 2012	$	2,750,000
June 30, 2012	$	2,750,000
September 30, 2012	$	2,750,000
December 31, 2012	$	2,750,000
March 31, 2013	$	2,000,000
June 30, 2013	$	2,000,000
September 30, 2013	$	2,000,000
Maturity Date for P.R. Term Loans	$	2,000,000

-73-

(d) Revolving Credit Loans. The U.S. Borrower shall repay to the Administrative Agent for the ratable account of the Revolving Credit Lenders on the Maturity Date in respect of the Revolving Credit Facility the aggregate principal amount of all of its Revolving Credit Loans outstanding on such date.

(e) Swing Line Loans. The U.S. Borrower shall repay its Swing Line Loans on the earlier to occur of (i) the date five (5) Business Days after such Loan is made and (ii) the Maturity Date for the Revolving Credit Facility.

SECTION 2.08. Interest. (a) Subject to the provisions of Section 2.08(b), (i) each Eurocurrency Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurocurrency Rate for such Interest Period plus the Applicable Rate; (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable Borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable Borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate for Revolving Credit Loans.

(b) The U.S. Borrower or the P.R. Borrower, as applicable, shall pay interest on past due amounts hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws. Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

(c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

(d) All computations of interest hereunder shall be made in accordance with Section 2.10.

SECTION 2.09. Fees. In addition to certain fees described in Sections 2.03(h) and (i):

(a) Commitment Fee. The U.S. Borrower shall pay to the Administrative Agent for the account of each Revolving Credit Lender in accordance with its Pro Rata Share, a commitment fee equal to the Applicable Rate with respect to commitment fees times the actual daily amount by which the aggregate Revolving Credit Commitment exceeds the sum of (A) the Outstanding Amount of Revolving Credit Loans and (B) the Outstanding Amount of L/C Obligations; provided that any commitment fee accrued with respect to any of the Commitments of a Defaulting Lender during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable by the U.S. Borrower so long as such Lender shall be a Defaulting Lender except to the extent that such commitment fee shall otherwise have been due and payable by the U.S. Borrower prior to such time; and provided further, that no commitment fee shall accrue on any of the Commitments of a Defaulting Lender so long as such Lender shall be a

-74-

Defaulting Lender. The commitment fee shall accrue at all times from the date hereof until the Maturity Date for the Revolving Credit Facility, including at any time during which one or more of the conditions in Article 4 is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the Maturity Date for the Revolving Credit Facility (or such earlier date as when the aggregate Revolving Credit Commitments are terminated). The commitment fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.

(b) Other Fees. The Borrowers shall pay to the Agents such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever (except as expressly agreed between the Borrowers and the applicable Agent).

SECTION 2.10. Computation of Interest and Fees. All computations of interest for Base Rate Loans when the Base Rate is determined by the Administrative Agent’s “prime rate” shall be made on the basis of a year of three hundred sixty-five (365) days and actual days elapsed. All other computations of fees and interest shall be made on the basis of a three hundred sixty (360) day year and actual days elapsed. Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid; provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one (1) day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

SECTION 2.11. Evidence of Indebtedness. (a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and evidenced by one or more entries in the Register maintained by the Administrative Agent, acting solely for purposes of Treasury Regulation Section 5f.103-1(c), as agent for the Borrowers, in each case in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be prima facie evidence absent manifest error of the amount of the Credit Extensions made by the Lenders to the respective Borrowers and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of any Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the U.S. Borrower or P.R. Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note payable to such Lender, which shall evidence such Lender’s Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

-75-

(b) In addition to the accounts and records referred to in Section 2.11(a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records and, in the case of the Administrative Agent, entries in the Register, evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

(c) Entries made in good faith by the Administrative Agent in the Register pursuant to Sections 2.11(a) and (b), and by each Lender in its account or accounts pursuant to Sections 2.11(a) and (b), shall be prima facie evidence of the amount of principal and interest due and payable or to become due and payable from each Borrower to, in the case of the Register, each Lender and, in the case of such account or accounts, such Lender, under this Agreement and the other Loan Documents, absent manifest error; provided that the failure of the Administrative Agent or such Lender to make an entry, or any finding that an entry is incorrect, in the Register or such account or accounts shall not limit or otherwise affect the obligations of the Borrowers under this Agreement and the other Loan Documents.

(d) Notwithstanding anything to the contrary contained above in this Section 2.11 or elsewhere in this Agreement, Notes shall only be delivered to Lenders which at any time specifically request the delivery of such Notes. No failure of any Lender to request, maintain, obtain or produce a Note evidencing its Loans to the U.S. Borrower or P.R. Borrower, as applicable, shall affect or in any manner impair the obligations of such Borrower to pay the Loans (and all related Obligations) incurred by such Borrower which would otherwise be evidenced thereby in accordance with the requirements of this Agreement, and shall not in any way affect the security or guaranties therefor provided pursuant to the various Loan Documents.

SECTION 2.12. Payments Generally. (a) All payments to be made by the Borrowers shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrowers hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the applicable Administrative Agent’s Office in Dollars and in Same Day Funds not later than 2:00 p.m. on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 2:00 p.m. shall in each case be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.

(b) If any payment to be made by any Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be; provided that, if such extension would cause payment of interest on or principal of Eurocurrency Rate Loans to be made in the next succeeding calendar month, such payment shall be made on the immediately preceding Business Day.

-76-

(c) Unless any Borrower or any Lender has notified the Administrative Agent, prior to the date any payment is required to be made by it to the Administrative Agent hereunder, that such Borrower or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume that such Borrower or such Lender, as the case may be, has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto. If and to the extent that such payment was not in fact made to the Administrative Agent in Same Day Funds, then:

(i) if any Borrower failed to make such payment, each Lender shall forthwith on demand repay to the Administrative Agent the portion of such assumed payment that was made available to such Lender in Same Day Funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent to such Lender to the date such amount is repaid to the Administrative Agent in Same Day Funds at the Federal Funds Rate for the first three days and equal to the rate applicable to Revolving Credit Loans that are maintained as Base Rate Loans for each day thereafter; and

(ii) if any Lender failed to make such payment, such Lender shall forthwith on demand pay to the Administrative Agent the amount thereof in Same Day Funds, together with interest thereon for the period from the date such amount was made available by the Administrative Agent to the respective Borrower to the date such amount is recovered by the Administrative Agent (the “Compensation Period”) at a rate per annum equal to the applicable Federal Funds Rate for the first three days and equal to the rate applicable to Revolving Credit Loans that are maintained as Base Rate Loans for each day thereafter. When such Lender makes payment to the Administrative Agent (together with all accrued interest thereon), then such payment amount (excluding the amount of any interest which may have accrued and been paid in respect of such late payment) shall constitute such Lender’s Loan included in the applicable Borrowing. If such Lender does not pay such amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent may make a demand therefor upon the applicable Borrower, and such Borrower shall pay such amount to the Administrative Agent, together with interest thereon accruing during the Compensation Period at a rate per annum equal to the rate of interest applicable to the applicable Borrowing. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitment or to prejudice any rights which the Administrative Agent or any Borrower may have against any Lender as a result of any default by such Lender hereunder.

A notice of the Administrative Agent to any Lender or any Borrower with respect to any amount owing under this Section 2.12(c) shall be conclusive, absent manifest error.

(d) If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article 2, and such funds are not made available to the respective Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article 4 are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

-77-

(e) The obligations of the Lenders hereunder to make Loans and to fund participations in Letters of Credit and Swing Line Loans are several and not joint. The failure of any Lender to make any Loan or to fund any such participation on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or purchase its participation.

(f) Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

(g) Whenever any payment received by the Administrative Agent under this Agreement or any of the other Loan Documents is insufficient to pay in full all amounts due and payable to the Administrative Agent and the Lenders under or in respect of this Agreement and the other Loan Documents on any date, such payment shall be distributed by the Administrative Agent and applied by the Administrative Agent and the Lenders in the order of priority set forth in Section 8.04. If the Administrative Agent receives funds for application to the Obligations of the Loan Parties under or in respect of the Loan Documents under circumstances for which the Loan Documents do not specify the manner in which such funds are to be applied, the Administrative Agent may, but shall not be obligated to, elect to distribute such funds to each of the Lenders in accordance with such Lender’s Pro Rata Share of the sum of (a) the Outstanding Amount of all Loans outstanding at such time and (b) the Outstanding Amount of all L/C Obligations outstanding at such time, in repayment or prepayment of such of the outstanding Loans or other Obligations then owing to such Lender.

SECTION 2.13. Sharing of Payments. If, other than as expressly provided elsewhere herein, any Lender shall obtain on account of the Loans made by it, or the participations in L/C Obligations and Swing Line Loans held by it, any payment (whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such Lender shall immediately (a) notify the Administrative Agent of such fact, and (b) purchase from the other Lenders such participations in the Loans made by them and/or such subparticipations in the participations in L/C Obligations or Swing Line Loans held by them, as the case may be, as shall be necessary to cause such purchasing Lender to share the excess payment in respect of such Loans or such participations, as the case may be, pro rata with each of them; provided that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender under any of the circumstances described in Section 12.06 (including pursuant to any settlement entered into by the purchasing Lender in its discretion), such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender’s ratable share (according to the proportion of (i) the amount of such paying Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered, without further interest thereon. Each Borrower agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by applicable Law, exercise all its rights of payment (including the right of setoff, but subject to Section 12.09) with respect to such participation as fully as if such Lender were the direct creditor of such Borrower in the amount of such participation. The

-78-

Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section 2.13 and will in each case notify the Lenders following any such purchases or repayments. Each Lender that purchases a participation pursuant to this Section 2.13 shall from and after such purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were the original owner of the Obligations purchased.

SECTION 2.14. Incremental Credit Extensions. (a) The U.S. Borrower may at any time or from time to time after the Closing Date, by notice to the Administrative Agent (whereupon the Administrative Agent shall promptly deliver a copy to each of the Lenders), request (a) one or more additional tranches of term loans to be borrowed by the U.S. Borrower (the “Incremental Term Loans”) or (b) one or more increases in the amount of the Revolving Credit Commitments (each such increase, a “Revolving Commitment Increase”), provided that both at the time of any such request and upon the effectiveness of any Incremental Amendment referred to below, no Default shall exist and the U.S. Borrower shall be in Pro Forma Compliance with the Financial Covenant and at the time that any such Incremental Term Loan is made (and after giving effect thereto) no Default shall exist and the U.S. Borrower shall be in Pro Forma Compliance with the Financial Covenant. Each tranche of Incremental Term Loans and each Revolving Commitment Increase shall be in an aggregate principal amount that is not less than $25,000,000 (provided that such amount may be less than $25,000,000 if such amount represents all remaining availability under the limit set forth in the next sentence). Notwithstanding anything to the contrary herein, the aggregate amount of the Incremental Term Loans and Revolving Commitment Increases made pursuant to this Section 2.14, shall not exceed $250,000,000. Each tranche of Incremental Term Loans (a) shall rank pari passu in right of payment and of security with the Revolving Credit Loans and the U.S. Term Loans, (b) shall not mature earlier than the Maturity Date with respect to the Term Loans, (c) except as set forth below with respect to amortization, shall be treated substantially the same as the U.S. Term Loans (in each case, including with respect to mandatory and voluntary prepayments) and (d) shall have a Weighted Average Life to Maturity of no less than the Weighted Average Life to Maturity as then in effect for the U.S. Term Loans, provided that (i) except as provided in preceding clauses (a), (b), (c) and (d), the terms and conditions applicable to Incremental Term Loans may be materially different from those of the U.S. Term Loans to the extent such differences are reasonably acceptable to the Arrangers and (ii) the interest rates and amortization schedule applicable to the Incremental Term Loans shall be determined by the U.S. Borrower and the lenders in respect of the Incremental Term Loans; provided, further, however, that if the effective “interest rate margin” for such Incremental Term Loans as of the Incremental Facility Closing Date therefor (which “interest rate margin”, for such purposes only, shall be determined by the Administrative Agent and deemed to include all upfront or similar fees and/or original issue discount (amortized over the shorter of (x) the life of such Incremental Term Loans and (y) the four years following the date of incurrence of such Incremental Term Loans) payable to all Lenders providing such Incremental Term Loans, but exclusive of any arrangement, structuring or other fees payable in connection therewith that are not shared with all Lenders providing such Incremental Term Loans) exceeds the effective “interest rate margin” then applicable to the then outstanding Term Loans of any Tranche (as such “interest rate margin” shall have been determined by the Administrative Agent on the same basis as provided in the immediately preceding parenthetical) by more than 0.50% per annum, then the Applicable Rate for the then

-79-

outstanding Term Loans of each such Tranche shall be increased to the Applicable Increased Term Loan Rate for the Incremental Term Loans effective as of the relevant Incremental Facility Closing Date. Each Credit Extension pursuant to a Revolving Commitment Increase shall have the same terms as are applicable to Credit Extensions pursuant to the Revolving Credit Facility (prior to giving effect to such Revolving Commitment Increase). Each notice from the U.S. Borrower pursuant to this Section shall set forth the requested amount and proposed terms of the relevant Incremental Term Loans or Revolving Commitment Increases. Incremental Term Loans may be made, and Revolving Commitment Increases may be provided, by any existing Lender (and each existing U.S. Term Lender will have the right, but not an obligation, to make a portion of any Incremental Term Loan, and each existing Revolving Credit Lender will have the right, but not an obligation, to provide a portion of any Revolving Commitment Increase, in each case on terms permitted in this Section 2.14 and otherwise on terms reasonably acceptable to the Administrative Agent) or by any other bank or other financial institution (any such other bank or other financial institution being called an “Additional Lender”), provided that the Administrative Agent and the U.S. Borrower shall have each consented (such consent not to be unreasonably withheld) to such Lender’s or Additional Lender’s making such Incremental Term Loans or providing such Revolving Commitment Increases. Commitments in respect of Incremental Term Loans and Revolving Commitment Increases shall become Commitments (or in the case of a Revolving Commitment Increase to be provided by an existing Revolving Credit Lender, an increase in such Lender’s applicable Revolving Credit Commitment) under this Agreement pursuant to an amendment (an “Incremental Amendment”) to this Agreement and, as appropriate, the other Loan Documents, executed by Holdings, the U.S. Borrower, each Lender agreeing to provide such Commitment, if any, each Additional Lender, if any, and the Administrative Agent. The Incremental Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the U.S. Borrower, to effect the provisions of this Section. The effectiveness of any Incremental Amendment shall be subject to the satisfaction on the date thereof (each, an “Incremental Facility Closing Date”) of each of the conditions set forth in Section 4.02 (it being understood that all references to “the date of such Credit Extension” or similar language in such Section 4.02 shall be deemed to refer to each of the effective date of such Incremental Amendment and the date extensions of credit are made hereunder as contemplated thereby) and such other conditions as the parties thereto shall agree. The U.S. Borrower will use the proceeds of the Incremental Term Loans and Revolving Commitment Increases for any purpose not prohibited by this Agreement. No Lender shall be obligated to provide any Incremental Term Loans or Revolving Commitment Increases, unless it so agrees. Upon each increase in the Revolving Credit Commitments pursuant to this Section, (A) each Revolving Credit Lender immediately prior to such increase will automatically and without further act be deemed to have assigned to each Lender providing a portion of the Revolving Commitment Increase (each, a “Revolving Commitment Increase Lender”) in respect of such increase, and each such Revolving Commitment Increase Lender will automatically and without further act be deemed to have assumed, a portion of such Revolving Credit Lender’s participations hereunder in outstanding Letters of Credit and Swing Line Loans such that, after giving effect to each such deemed assignment and assumption of participations, the percentage of the aggregate outstanding (i) participations hereunder in Letters of Credit and (ii) participations hereunder in Swing Line Loans held by each Revolving Credit Lender (including each such Revolving Commitment

-80-

Increase Lender) will equal the percentage of the aggregate Revolving Credit Commitments of all Revolving Credit Lenders represented by such Revolving Credit Lender’s Revolving Credit Commitment and (B) if, on the date of such increase, there are any Revolving Credit Loans outstanding, such Revolving Credit Loans shall on or prior to the effectiveness of such Revolving Commitment Increase be prepaid from the proceeds of additional Revolving Credit Loans made hereunder (reflecting such increase in Revolving Credit Commitments), which prepayment shall be accompanied by accrued interest on the Revolving Credit Loans being prepaid and any costs incurred by any Lender in accordance with Section 3.05. The Administrative Agent and the Lenders hereby agree that the minimum borrowing, pro rata borrowing and pro rata payment requirements contained elsewhere in this Agreement shall not apply to the transactions effected pursuant to the immediately preceding sentence.

(b) This Section 2.14 shall supersede any provisions in Section 2.13 or 12.01 to the contrary.

ARTICLE III

Taxes, Increased Costs Protection and Illegality

SECTION 3.01. Taxes. (a) Except as provided in this Section 3.01, any and all payments by each Borrower (the term Borrower under Article 3 being deemed to include any Subsidiary for whose account a Letter of Credit is issued) to or for the account of any Agent or any Lender under any Loan Document shall be made free and clear of and without deduction or withholding for any and all present or future taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and all liabilities (including additions to tax, penalties and interest) with respect thereto, excluding, in the case of each Agent and each Lender, (i) taxes imposed on or measured by its net income by any jurisdiction (or any political subdivision thereof) under the Laws of which such Agent or such Lender, as the case may be, is organized or maintains a principal office or a Lending Office, (ii) any tax imposed by any jurisdiction as a result of such Agent or Lender having its principal executive office or any branch in such jurisdiction other than any tax that would have been imposed had the sole connection between such Agent or Lender been such Agent or Lender having executed, delivered or performed its obligations under, and received payment under or enforced, this Agreement or any Note (or any combination of the foregoing) (iii) any branch profits taxes imposed by the United States or any similar tax imposed by a foreign jurisdiction, and (iv) all liabilities (including additions to tax, penalties, surcharges and interest) with respect thereto (all such non-excluded taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and liabilities being hereinafter referred to as “Taxes”). If any Borrower shall be required by any Laws to deduct any Taxes or Other Taxes from or in respect of any sum payable under any Loan Document to any Agent or any Lender, (i) the sum payable shall be increased as necessary so that after making all required deductions of such Taxes or Other Taxes (including deductions applicable to additional sums payable under this Section 3.01) each of such Agent and such Lender receives an amount equal to the sum it would have received had no such deductions of such Taxes or Other Taxes been made, (ii) such Borrower shall make such deductions of such Taxes or Other Taxes, (iii) such Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Laws, and (iv) within thirty (30) days after the date of such payment (or, if receipts or evidence are not

-81-

available within thirty (30) days, as soon as possible thereafter), such Borrower shall furnish to such Agent or Lender (as the case may be) the original or a certified copy of a receipt evidencing payment thereof to the extent such a receipt is issued therefor, or other written proof of payment thereof that is reasonably satisfactory to the Administrative Agent. If such Borrower fails to pay any Taxes or Other Taxes when due to the appropriate taxing authority or fails to remit to any Agent or any Lender the required receipts or other required documentary evidence, such Borrower shall indemnify such Agent and such Lender for any incremental taxes, interest, penalties or surcharges that may become payable by such Agent or such Lender arising out of such failure.

(b) If any amounts are payable in respect of Taxes pursuant to the second sentence in Section 3.01(a), then the Borrowers shall be obligated to reimburse any Agent or any Lender, upon the written request of such Agent or Lender, as the case may be, for taxes imposed on or measured by the net income of such Agent or Lender, as the case may be, pursuant to the laws of the jurisdiction in which such Agent or Lender, as the case may be, is organized or in which the principal office or applicable Lending Office of such Lender is located or under the laws of any political subdivision or taxing authority thereof or therein and for any withholding of taxes as such Agent or Lender, as the case may be, shall determine are payable by, or withheld from, such Agent or Lender, as the case may be, in respect of such amounts so paid to or on behalf of such Agent or Lender, as the case may be, pursuant to the second sentence in Section 3.01(a) and in respect of any amounts paid to or on behalf of such Agent or Lender, as the case may be, pursuant to this Section 3.01(b).

(c) Each Borrower agrees to pay any and all present or future stamp, payment voucher, court or documentary taxes and any other excise, property, intangible or mortgage recording taxes or charges or similar levies which arise from any payment made under any Loan Document or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Loan Document (hereinafter referred to as “Other Taxes”) in accordance with applicable laws.

(d) Each Borrower agrees to indemnify each Agent and each Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section 3.01) paid by such Agent and such Lender and (ii) any liability (including additions to tax, penalties, surcharges, interest and expenses) arising therefrom or with respect thereto; provided such Agent or Lender, as the case may be, provides such Borrower with a written statement thereof setting forth in reasonable detail the basis and calculation of such amounts. Payment under this Section 3.01(d) shall be made within thirty (30) days after the date such Lender or such Agent makes a written demand therefor.

(e) Each Lender and Agent agrees to use reasonable efforts (consistent with legal and regulatory restrictions and subject to overall policy considerations of such Lender) to file any certificate or document or to furnish to a Borrower or the Administrative Agent, as the case may be, any information, in each case, as reasonably requested by such Borrower or the Administrative Agent, as the case may be, that may be necessary to establish any available exemption from, or reduction in the amount of, any Taxes imposed by a jurisdiction other than the United States; provided, however, that nothing in this Section 3.01(e) shall require a Lender or an Agent to disclose any confidential information (including, without limitation, its tax returns or its calculations).

-82-

(f) Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 3.01(a) or (d) with respect to such Lender it will, if requested by the applicable Borrower, use commercially reasonable efforts (subject to such Lender’s overall internal policies of general application and consistent with its legal and regulatory restrictions) to designate another Lending Office for any Loan or Letter of Credit affected by such event; provided that such efforts are made on terms that, in the good faith sole judgment of such Lender, cause such Lender and its Lending Office(s) to suffer no material economic, legal or regulatory disadvantage, and provided further that nothing in this Section 3.01(f) shall affect or postpone any of the Obligations of the Borrowers or the rights of such Lender pursuant to Section 3.01(a) or (d).

(g) If any Agent or any Lender receives a refund that such Lender or Agent determines in its sole good faith discretion is allocable to taxes for which any Borrower has made additional payments pursuant to Section 3.01(a), 3.01(b) or 3.01(d), such Agent or such Lender, as the case may be, shall promptly pay such refund (together with any interest with respect thereto received from the relevant taxing authority, but net of any reasonable cost incurred in connection therewith) to such Borrower; provided, however, that such Borrower agrees promptly to return such refund (together with any interest, penalties or additional amounts with respect thereto due to the relevant taxing authority) (free of all taxes) to such Agent or the applicable Lender, as the case may be, upon receipt of a notice that such refund is required to be repaid to the relevant taxing authority.

(h) Each Lender and Agent agree to take such actions that may be reasonably requested by the Borrower in order to seek a refund of any Taxes indemnified hereunder, or to contest or cooperate in a contest of any Taxes described in Section 3.01(d), at such Borrower’s sole cost and expense, but each Lender and Agent shall not be required to take any action if it determines in its sole good faith judgment that such action would be materially disadvantageous to it and the parties hereto agree that any positions taken in any tax return, filing or proceeding by each Lender and Agent shall be within the sole good faith discretion and control of each such person.

(i) Nothing in this Agreement shall be construed to require any Agent or Lender to make available its tax returns to any Borrower or any other Person.

(j) (i) Each Lender and Agent that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code (each, a “Foreign Lender”) shall deliver to the Borrowers and the Administrative Agent, on or prior to the date which is ten (10) Business Days after the Closing Date (or upon accepting an assignment of an interest herein), two duly signed, properly completed copies of either IRS Form W-8BEN or any successor thereto (relating to such Foreign Lender and entitling it to an exemption from, or reduction of, United States withholding tax on all payments to be made to such Foreign Lender by the Borrowers or any other Loan Party pursuant to this Agreement or any other Loan Document) or IRS Form W-8ECI or any successor thereto (relating to all payments to be made to such Foreign Lender by the Borrowers or any other Loan Party pursuant to this Agreement or any other Loan Document) or

-83-

such other evidence reasonably satisfactory to the Borrowers and the Administrative Agent that such Foreign Lender is entitled to an exemption from, or reduction of, United States withholding tax, including any exemption pursuant to Section 871(h) or 881(c) of the Code, and in the case of a Foreign Lender claiming such an exemption under Section 881(c) of the Code, a duly executed certificate substantially in the form of Exhibit L (any such certificate a “Section 3.01(j)(i) Certificate”) that establishes in writing to the Borrowers and the Administrative Agent that such Foreign Lender is not (i) a “bank” as defined in Section 881(c)(3)(A) of the Code, (ii) a 10-percent stockholder within the meaning of Section 871(h)(3)(B) of the Code, or (iii) a controlled foreign corporation related to the Borrowers with the meaning of Section 864(d) of the Code. Thereafter and from time to time, each such Foreign Lender shall (A) submit to the Borrowers and the Administrative Agent such additional duly completed and signed copies of one or more of such forms or certificates (or such successor forms or certificates as shall be adopted from time to time by the relevant United States taxing authorities) as may then be available under then current United States Laws and regulations to avoid, or such evidence as is reasonably satisfactory to the Borrowers and the Administrative Agent of any available exemption from, or reduction of, United States withholding taxes in respect of all payments to be made to such Foreign Lender by the Borrowers or other Loan Party pursuant to this Agreement, or any other Loan Document, in each case, (1) on or before the date that any such form, certificate or other evidence expires or becomes obsolete, (2) after the occurrence of any event requiring a change in the most recent form, certificate or evidence previously delivered by it to the Borrowers and the Administrative Agent and (3) from time to time thereafter if reasonably requested by the Borrowers or the Administrative Agent, or (B) it shall notify the Borrowers and the Administrative Agent of its inability to deliver any such form or certificate pursuant to this Section 3.01(j).

(ii) Each Foreign Lender, to the extent it does not act or ceases to act for its own account with respect to any portion of any sums paid or payable to such Foreign Lender under any of the Loan Documents (for example, in the case of a typical participation by such Foreign Lender), shall deliver to the Borrowers and the Administrative Agent on the date when such Foreign Lender ceases to act for its own account with respect to any portion of any such sums paid or payable, and at such other times as may be necessary in the determination of the Borrowers or the Administrative Agent (in either case, in the reasonable exercise of its discretion), (A) two duly signed completed copies of the forms or statements required to be provided by such Foreign Lender as set forth above, to establish the portion of any such sums paid or payable with respect to which such Foreign Lender acts for its own account that is not subject to United States withholding tax, and (B) two duly signed completed copies of IRS Form W-8IMY (or any successor thereto), together with any information such Foreign Lender chooses to transmit with such form, and any other certificate or statement of exemption required under the Code, to establish that such Foreign Lender is not acting for its own account with respect to a portion of any such sums payable to such Foreign Lender.

(iii) The U.S. Borrower or the P.R. Borrower, as applicable, shall not be required to pay any additional amount or any indemnity payment under this Section 3.01 to (A) any Foreign Lender to the extent Taxes would not be due absent the failure of such Foreign Lender to satisfy the foregoing provisions of this Section 3.01(j), (B) any U.S. Lender to the extent Taxes would not be due absent the failure of such U.S. Lender to satisfy the provisions of Section 3.01(k) or (C) any Lender to the extent such amounts are United States withholding taxes imposed on

-84-

amounts payable to such Lender at the time such Lender becomes a party to this Agreement, except to the extent such Lender’s assignor (if any) was entitled, at the time of the assignment, to receive additional amounts from such Borrower with respect to such Taxes pursuant to this Section 3.01 of this Agreement; provided that (i) if such Lender shall have satisfied the requirement of this Section 3.01(j) or Section 3.01(k), as applicable, on the date such Lender became a Lender or ceased to act for its own account with respect to any payment under any of the Loan Documents, nothing in this Section 3.01(j) or Section 3.01(k) shall relieve such Borrower of its obligation to pay any other amounts pursuant to this Section 3.01 in the event that, as a result of any change in any applicable Law, treaty or governmental rule, regulation or order, or any change in the interpretation, administration or application thereof, in each case, occurring after the date such Lender became a Lender or ceased to act for its own account with respect to any payment under any of the Loan Documents, such Lender is no longer properly entitled to deliver forms, certificates or other evidence at a subsequent date establishing the fact that such Lender or other Person for the account of which such Lender receives any sums payable under any of the Loan Documents is not subject to withholding or is subject to withholding at a reduced rate, (ii) nothing in this Section 3.01(j) shall relieve such Borrower of its obligation to pay any amounts pursuant to this Section 3.01 in the event that the requirements of this Section 3.01(j)(ii) have not been satisfied if such Borrower is entitled, under applicable Law, to rely on any applicable forms and statements required to be provided under this Section 3.01 by the Foreign Lender that does not act or has ceased to act for its own account under any of the Loan Documents, including in the case of a typical participation, and (iii) in the case of a loan to the U.S. Borrower that has been acquired by a Lender (x) while any event described in Section 8.01(f) has occurred and is continuing, or after an acceleration of any loans pursuant to Section 8.02, and (y) that held a Loan to the P.R. Borrower at the time such event or acceleration occurred, clause (C) of this sub-section shall not relieve any Borrower of its obligation to pay any amounts pursuant to this Section 3.01.

(iv) The Administrative Agent may deduct and withhold any taxes required by any Laws to be deducted and withheld from any payment under any of the Loan Documents.

(k) Each Lender and Agent that is a “United States person” within the meaning of Section 7701(a)(30) of the Code (each, a “U.S. Lender”) shall deliver to the Administrative Agent and the U.S. Borrower two duly signed, properly completed copies of IRS Form W-9 on or prior to the Closing Date (or on or prior to the date it becomes a party to this Agreement), certifying that such U.S. Lender is entitled to an exemption from United States backup withholding tax, or any successor form. If such U.S. Lender fails to deliver such forms, then the Administrative Agent may withhold from any payment to such U.S. Lender an amount equivalent to the applicable backup withholding tax imposed by the Code.

(l) Each Lender and Agent shall furnish in writing to the P.R. Borrower or the Administrative Agent, as the case may be, the following information: (i) its name and place of incorporation, (ii) its Puerto Rico and U.S. business addresses, if any, (iii) its U.S. federal taxpayer identification number, if any, and (iv) whether, to its reasonable knowledge, such Lender is directly or indirectly owned, by vote or value, by a person or persons owning 50% or more, by vote or value, of the P.R. Borrower, in each case, as applicable, when reasonably requested by the P.R. Borrower or the Administrative Agent, as the case may be.

-85-

SECTION 3.02. Illegality. If any Lender reasonably determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurocurrency Rate Loans, or to determine or charge interest rates based upon the Eurocurrency Rate, then, on written notice thereof by such Lender to the U.S. Borrower, through the Administrative Agent, any obligation of such Lender to make or continue Eurocurrency Rate Loans or to convert Base Rate Loans to Eurocurrency Rate Loans shall be suspended until such Lender notifies the Administrative Agent and the U.S. Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, each Borrower shall upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all outstanding Eurocurrency Rate Loans made to such Borrower by such Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurocurrency Rate Loans to such day, or promptly, if such Lender may not lawfully continue to maintain such Eurocurrency Rate Loans. Upon any such prepayment or conversion, each Borrower shall also pay accrued interest on the amount so prepaid or converted and all amounts due, if any, in connection with such prepayment or conversion under Section 3.05. Each Lender agrees to designate a different Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender.

SECTION 3.03. Inability to Determine Rates. If the Required Lenders determine that for any reason adequate and reasonable means do not exist for determining the Eurocurrency Rate for any requested Interest Period with respect to a proposed Eurocurrency Rate Loan, or that the Eurocurrency Rate for any requested Interest Period with respect to a proposed Eurocurrency Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, or that Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and the Interest Period of such Eurocurrency Rate Loan, the Administrative Agent will promptly so notify in writing the U.S. Borrower and each Lender. Thereafter, the obligation of the Lenders to make or maintain Eurocurrency Rate Loans shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such written notice, each Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurocurrency Rate Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.

SECTION 3.04. Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurocurrency Rate Loans. (a) If any Lender determines that as a result of the introduction of or any change in or in the interpretation of any Law, in each case after the date hereof, or such Lender’s compliance therewith, there shall be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining Eurocurrency Rate Loans or (as the case may be) issuing or participating in Letters of Credit, or a reduction in the amount received or receivable by such Lender in connection with any of the foregoing, then from time to time within fifteen (15) days after written demand by such Lender setting forth in reasonable detail such increased costs and the basis for the calculation thereof (with a copy of such demand to the Administrative Agent given in accordance with Section 3.06), the applicable Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such increased cost or reduction.

-86-

(b) If any Lender determines that the introduction of any Law regarding capital adequacy or any change therein or in the interpretation thereof, in each case after the date hereof, or compliance by such Lender (or its Lending Office) therewith, has the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lender’s obligations hereunder (taking into consideration its policies with respect to capital adequacy and such Lender’s desired return on capital), then from time to time upon written demand of such Lender setting forth in reasonable detail the charge and the calculation of such reduced rate of return (with a copy of such demand to the Administrative Agent given in accordance with Section 3.06), the applicable Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such reduction within fifteen (15) days after receipt of such demand.

(c) Each Borrower shall pay to each Lender, (i) as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits, additional interest on the unpaid principal amount of each Eurocurrency Rate Loan made to such Borrower by such Lender equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive in the absence of manifest error), and (ii) as long as such Lender shall be required to comply with any reserve ratio requirement or analogous requirement of any other central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments with respect to Credit Extensions to such Borrower or the funding of the Eurocurrency Rate Loans made to such Borrower, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such Commitment or Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest error) which in each case shall be due and payable on each date on which interest is payable on such Loan, provided such Borrower shall have received at least fifteen (15) days’ prior written notice (with a copy to the Administrative Agent) of such additional interest or cost from such Lender. If a Lender fails to give written notice fifteen (15) days prior to the relevant Interest Payment Date, such additional interest or cost shall be due and payable fifteen (15) days from receipt of such notice.

(d) Failure or delay on the part of any Lender to demand compensation pursuant to this Section 3.04 shall not constitute a waiver of such Lender’s right to demand such compensation, provided that the applicable Borrower shall not be required to compensate a Lender pursuant to Section 3.04(a), (b) or (c) for any such increased cost or reduction incurred more than ninety (90) days prior to the date that such Lender demands, or notifies such Borrower in writing of its intention to demand, compensation therefor, provided further that, if the circumstance giving rise to such increased cost or reduction is retroactive, then such 90-day period referred to above shall be extended to include the period of retroactive effect thereof.

(e) If any Lender requests compensation under this Section 3.04, then such Lender will, if requested by the applicable Borrower, use commercially reasonable efforts to designate another Lending Office for any Loan or Letter of Credit affected by such event; provided that such efforts are made on terms that, in the reasonable judgment of such Lender, cause such Lender and its Lending Office(s) to suffer no material economic, legal or regulatory disadvantage, and provided further that nothing in this Section 3.04(e) shall affect or postpone any of the Obligations of the Borrowers or the rights of such Lender pursuant to Section 3.04(a), (b), (c) or (d).

-87-

(f) Notwithstanding anything else to the contrary, this Section 3.04 shall not apply to Taxes.

SECTION 3.05. Funding Losses. Upon written demand (which demand shall set forth in reasonable detail the terms for requesting such amount) of any Lender (with a copy to the Administrative Agent) from time to time, the U.S. Borrower or the P.R. Borrower, as applicable, shall promptly compensate such Lender for and hold such Lender harmless from any loss (but excluding any loss of anticipated profit), cost or expense incurred by it as a result of:

(a) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan; or

(b) any failure by such Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by such Borrower;

including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained.

SECTION 3.06. Matters Applicable to All Requests for Compensation. (a) Any Agent or any Lender claiming compensation under this Article 3 shall deliver a certificate to the U.S. Borrower or P.R. Borrower, as applicable, setting forth the additional amount or amounts to be paid to it hereunder which shall be conclusive in the absence of manifest error. In determining such amount, such Agent or such Lender may use any reasonable averaging and attribution methods.

(b) With respect to any Lender’s claim for compensation under Section 3.01, 3.02, 3.03 or 3.04, the U.S. Borrower or P.R. Borrower, as applicable, shall not be required to compensate such Lender for any amount incurred more than ninety (90) days prior to the date that such Lender notifies such Borrower of the event that gives rise to such claim; provided that, if the circumstance giving rise to such claim is retroactive, then such 90-day period referred to above shall be extended to include the period of retroactive effect thereof. If any Lender requests compensation by such Borrower under Section 3.04, such Borrower may, by notice to such Lender (with a copy to the Administrative Agent), suspend the obligation of such Lender to make or continue from one Interest Period to another Eurocurrency Rate Loans, or to convert Base Rate Loans into Eurocurrency Rate Loans, until the event or condition giving rise to such request ceases to be in effect (in which case the provisions of Section 3.06(c) shall be applicable); provided that such suspension shall not affect the right of such Lender to receive the compensation so requested.

(c) If the obligation of any Lender to make or continue from one Interest Period to another any Eurocurrency Rate Loan, or to convert Base Rate Loans into Eurocurrency Rate Loans shall be suspended pursuant to Section 3.06(b) hereof, such Lender’s Eurocurrency Rate Loans shall be automatically converted into Base Rate Loans on the last day(s) of the then

-88-

current Interest Period(s) for such Eurocurrency Rate Loans (or, in the case of an immediate conversion required by Section 3.02, on such earlier date as required by Law) and, unless and until such Lender gives notice as provided below that the circumstances specified in Section 3.02, 3.03 or 3.04 hereof that gave rise to such conversion no longer exist:

(i) to the extent that such Lender’s Eurocurrency Rate Loans have been so converted, all payments and prepayments of principal that would otherwise be applied to such Lender’s Eurocurrency Rate Loans shall be applied instead to its Base Rate Loans; and

(ii) all Loans that would otherwise be made or continued from one Interest Period to another by such Lender as Eurocurrency Rate Loans shall be made or continued instead as Base Rate Loans, and all Base Rate Loans of such Lender that would otherwise be converted into Eurocurrency Rate Loans shall remain as Base Rate Loans.

(d) If any Lender gives notice to the U.S. Borrower or P.R. Borrower, as applicable, (with a copy to the Administrative Agent) that the circumstances specified in Section 3.02, 3.03 or 3.04 hereof that gave rise to the conversion of such Lender’s Eurocurrency Rate Loans pursuant to this Section 3.06 no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when Eurocurrency Rate Loans made by other Lenders are outstanding, such Lender’s Base Rate Loans shall be automatically converted, on the first day(s) of the next succeeding Interest Period(s) for such outstanding Eurocurrency Rate Loans, to the extent necessary so that, after giving effect thereto, all Loans held by the Lenders holding Eurocurrency Rate Loans and by such Lender are held pro rata (as to principal amounts, interest rate basis, and Interest Periods) in accordance with their respective Commitments.

SECTION 3.07. Replacement of Lenders under Certain Circumstances. (a) If at any time (i) the U.S. Borrower or P.R. Borrower, as applicable, becomes obligated to pay additional amounts or indemnity payments described in Section 3.01 or 3.04 as a result of any condition described in such Sections or any Lender ceases to make Eurocurrency Rate Loans as a result of any condition described in Section 3.02 or Section 3.04, (ii) any Lender becomes a Defaulting Lender or (iii) any Lender becomes a Non-Consenting Lender, then such Borrower may, on ten (10) Business Days’ prior written notice to the Administrative Agent and such Lender, replace such Lender by causing such Lender to (and such Lender shall be obligated to) assign pursuant to Section 12.07(b) all of its rights and obligations under this Agreement to one or more Eligible Assignees; provided that neither the Administrative Agent nor any Lender shall have any obligation to such Borrower to find a replacement Lender or other such Person; and provided further that (A) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments and (B) in the case of any such assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable Eligible Assignees shall have agreed to the applicable departure, waiver or amendment of the Loan Documents.

(b) Any Lender being replaced pursuant to Section 3.07(a) above shall (i) execute and deliver an Assignment and Assumption with respect to such Lender’s Commitment

-89-

and outstanding Loans and participations in L/C Obligations and Swing Line Loans, and (ii) deliver any Notes evidencing such Loans to the U.S. Borrower (or the P.R. Borrower in the case of P.R. Term Notes) or the Administrative Agent. Pursuant to such Assignment and Assumption, (A) the assignee Lender shall acquire all or a portion, as the case may be, of the assigning Lender’s Commitment and outstanding Loans and participations in L/C Obligations and Swing Line Loans, (B) all obligations of the U.S. Borrower or P.R. Borrower, as applicable, owing to the assigning Lender relating to the Loans and participations so assigned shall be paid in full by the assignee Lender to such assigning Lender concurrently with such assignment and assumption and (C) upon such payment and, if so requested by the assignee Lender, delivery to the assignee Lender of the appropriate Note or Notes executed by the U.S. Borrower (or the P.R. Borrower in the case of P.R. Term Notes), the assignee Lender shall become a Lender hereunder and the assigning Lender shall cease to constitute a Lender hereunder with respect to such assigned Loans, Commitments and participations, except with respect to indemnification provisions under this Agreement, which shall survive as to such assigning Lender.

(c) Notwithstanding anything to the contrary contained above, any Lender that acts as an L/C Issuer may not be replaced hereunder at any time that it has any Letter of Credit outstanding hereunder unless arrangements reasonably satisfactory to such L/C Issuer (including the furnishing of a back-up standby letter of credit in form and substance, and issued by an issuer reasonably satisfactory to such L/C Issuer or the depositing of cash collateral into a cash collateral account in amounts and pursuant to arrangements reasonably satisfactory to such L/C Issuer) have been made with respect to each such outstanding Letter of Credit and the Lender that acts as the Administrative Agent may not be replaced hereunder except in accordance with the terms of Section 9.09.

(d) In the event that (i) the Borrowers or the Administrative Agent has requested that the Lenders consent to a departure or waiver of any provisions of the Loan Documents or agree to any amendment thereto, (ii) the consent, waiver or amendment in question requires the agreement of all affected Lenders in accordance with the terms of Section 12.01 or all the Lenders with respect to a certain Class of the Loans and (iii) the Required Lenders have agreed to such consent, waiver or amendment, then any Lender who does not agree to such consent, waiver or amendment shall be deemed a “Non-Consenting Lender”.

SECTION 3.08. Survival. All of the obligations of each Borrower under this Article 3 shall survive termination of the Aggregate Commitments and repayment of all other Obligations hereunder.

ARTICLE IV

Conditions Precedent to Credit Extensions

SECTION 4.01. Conditions of Initial Credit Extension. The obligation of each Lender to make its initial Credit Extension hereunder is subject to satisfaction of the following conditions precedent:

(a) The Administrative Agent’s receipt of the following, each of which shall be originals or facsimiles or other electronic copies (followed promptly by originals) unless

-90-

otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each in form and substance reasonably satisfactory to the Administrative Agent and its legal counsel:

(i) executed counterparts of this Agreement and each Guaranty;

(ii) a Note executed by the U.S. Borrower (or the P.R. Borrower in the case of P.R. Term Notes) in favor of each Lender that has requested a Note at least two Business Days in advance of the Closing Date;

(iii) each Collateral Document set forth on Schedule 4.01, duly executed by each Loan Party thereto, together with:

(A) certificates, if any, representing the Pledged Equity referred to therein accompanied by undated stock powers executed in blank and instruments evidencing the Pledged Debt indorsed in blank,

(B) evidence that all other actions, recordings and filings that the Administrative Agent may deem reasonably necessary to satisfy the Collateral and Guarantee Requirement shall have been taken, completed or otherwise provided for in a manner reasonably satisfactory to the Administrative Agent; and

(C) certified copies of requests for information or copies (Form UCC-11), or equivalent reports as of a recent date, listing all effective financing statements that name Holdings or any of its Subsidiaries as debtor and that are filed in the jurisdictions referred to in Schedule 2(b) of the Perfection Certificate (as defined in the U.S. Security Agreement), together with copies of such other financing statements that name Holdings or any of its Subsidiaries as debtor (none of which shall cover any of the Collateral except (x) to the extent evidencing Liens permitted under Section 7.01 or (y) those in respect of which the Collateral Agent shall have received termination statements (Form UCC-3) or such other termination statements as shall be required by local law fully executed for filing);

(iv) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with the execution and delivery of this Agreement and the other Loan Documents to which such Loan Party is a party or is to be a party on the Closing Date;

(v) (A) opinion from Fried, Frank, Harris, Shriver and Jacobson LLP, New York counsel to the Loan Parties substantially in the form of Exhibit I and (B) opinions from local counsel to the Loan Parties (not otherwise covered by the opinion described in immediately preceding clause (A)), in form and substance

-91-

reasonably satisfactory to the Administrative Agent, addressed to the Administrative Agent and each of the Lenders and dated the Closing Date covering such matters incident to the transactions contemplated herein as the Administrative Agent may reasonably request;

(vi) a certificate substantially in the form of Exhibit H attesting to the Solvency of the Loan Parties (taken as a whole) after giving effect to the Transaction, from the Chief Financial Officer of the U.S. Borrower;

(vii) evidence that all insurance required to be maintained pursuant to the Loan Documents has been obtained and is in effect and that the Collateral Agent has been named as loss payee and/or additional insured under each insurance policy with respect to such insurance as to which the Collateral Agent shall have requested to be so named;

(viii) certified copies of the Separation Documents, duly executed by the parties thereto, together with all material agreements, instruments and other documents delivered in connection therewith as the Administrative Agent shall reasonably request, each including certification by a Responsible Officer of the U.S. Borrower that such documents are in full force and effect as of the Closing Date; and

(ix) a Loan Notice or Letter of Credit Application, as applicable, relating to the initial Credit Extension.

Notwithstanding anything to the contrary contained herein, with respect to any Collateral the security interest in which may not be perfected by filing of a Uniform Commercial Code financing statement, if the perfection of the Collateral Agent’s security interest in such Collateral may not be accomplished prior to the Closing Date without undue burden or expense, then delivery of documents and instruments for perfection of such security interest shall not constitute a condition precedent hereunder and the Borrowers hereby agree to deliver or cause to be delivered such documents and instruments, and take or cause to be taken such other actions as may be required to perfect such security interests, within sixty (60) days after the Closing Date.

(b) All fees and expenses required to be paid hereunder and invoiced before the Closing Date shall have been paid in full in cash.

(c) Prior to or simultaneously with the initial Credit Extension, the Spin-off shall be consummated in accordance with the terms of the Separation Documents (and no material provision thereof (including the conditions precedent set forth therein) shall have been amended, modified, supplemented or waived in a manner material and adverse to the interests of the Lenders without the consent of the Arrangers, which consent shall not be unreasonably withheld).

(d) Prior to or simultaneously with the initial Credit Extensions, the Borrowers shall have taken all necessary actions such that, immediately after giving effect to the Transaction, (i) Holdings and its Subsidiaries shall have outstanding no Indebtedness or preferred Equity Interests other than (A) the Term Loans and L/C Obligations and (B)

-92-

Indebtedness listed on Schedule 7.03(b) and (ii) the U.S. Borrower shall have outstanding no Equity Interests (or securities convertible into or exchangeable for Equity Interests or rights or options to acquire Equity Interests) other than common stock owned by Holdings, with terms and conditions reasonably acceptable to the Arrangers to the extent material to the interests of the Lenders.

(e) The Arrangers and the Lenders shall have received (i) the Audited Financial Statements and the audit report for such financial statements (which shall not be subject to any qualification) and (ii) unaudited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of ABBI and its Subsidiaries for the fiscal quarters ended March 31, 2007, June 30, 2007 and September 30, 2007 (collectively, the “Unaudited Financial Statements”), which financial statements shall be prepared in accordance with GAAP.

(f) The Arrangers and the Lenders shall have received the Derived Financial Statements.

(g) On or prior to the date of the initial Credit Extension, each Loan Party and each other Subsidiary of Holdings which is an obligee or obligor with respect to any intercompany Indebtedness shall have duly authorized, executed and delivered the Intercompany Subordination Agreement, and the Intercompany Subordination Agreement shall be in full force and effect.

(h) The Arrangers shall have received all documentation and other information mutually agreed to be required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Act, to the extent requested by the Arrangers at least two Business Days prior to the Closing Date.

(i) All corporate and legal proceedings and all instruments and agreements relating to the Transaction and the other Loan Documents shall be reasonably satisfactory in form and substance to the Administrative Agent, and the Administrative Agent shall have received all information and copies of all documents and papers, including records of corporate proceedings, governmental approvals, good standing certificates and bring-down telegrams, if any, which the Administrative Agent may have reasonably requested in connection therewith, such documents and papers where appropriate to be certified by proper corporate or governmental authorities.

SECTION 4.02. Conditions to All Credit Extensions. The obligation of each Lender to honor any Request for Credit Extension (other than a Loan Notice requesting only a conversion of Loans to the other Type, or a continuation of Eurocurrency Rate Loans) is subject to the following conditions precedent:

(a) The representations and warranties of the Borrowers and each other Loan Party contained in Article 5 and each other Loan Document shall be true and correct in all material respects on and as of the date of such Credit Extension; provided that, to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct in all material respects as of such earlier date; provided, further

-93-

that, any representation and warranty that is qualified as to “materiality,” “Closing Date Material Adverse Effect”, “Material Adverse Effect” or similar language shall be true and correct in all respects on such respective dates.

(b) No Default shall exist, or would result from such proposed Credit Extension or from the application of the proceeds therefrom.

(c) The Administrative Agent and, if applicable, the relevant L/C Issuer or the Swing Line Lender shall have received a Request for Credit Extension in accordance with the requirements hereof.

Each Request for Credit Extension (other than a Loan Notice requesting only a conversion of Loans to the other Type or a continuation of Eurocurrency Rate Loans) submitted by the U.S. Borrower or P.R. Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.

ARTICLE V

Representations and Warranties

Each Credit Agreement Party represents and warrants to the Agents and the Lenders that:

SECTION 5.01. Existence, Qualification and Power; Compliance with Laws. Each Loan Party and each of its Subsidiaries (a) is a Person duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority to (i) own or lease its assets and carry on its business and (ii) in the case of the Loan Parties only, execute, deliver and perform its obligations under the Loan Documents to which it is a party, (c) is duly qualified and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, (d) is in compliance with all Laws, orders, writs, injunctions and orders and (e) has all requisite governmental licenses, authorizations, consents and approvals to own its assets and operate its business as currently conducted; except in each case referred to in clause (c), (d) or (e), to the extent that failure to do so could not reasonably be expected to have, as of the Closing Date, a Closing Date Material Adverse Effect, and thereafter, a Material Adverse Effect.

SECTION 5.02. Authorization; No Contravention. The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is a party, and the consummation of the Transaction, are within such Loan Party’s corporate or other powers, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents, (b) conflict with or result in any breach or contravention of, or the creation of any Lien under (other than as permitted by Section 7.01), or require any payment to be made under (i) (x) any material indenture, mortgage, deed of trust or loan agreement or (y) any other Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of

-94-

its Subsidiaries or (ii) any material order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any material Law; except with respect to any conflict, breach or contravention or payment (but not creation of Liens) referred to in clause (b)(i)(y), to the extent that such conflict, breach, contravention or payment could not reasonably be expected to have, as of the Closing Date, a Closing Date Material Adverse Effect, and thereafter, a Material Adverse Effect.

SECTION 5.03. Governmental Authorization; Other Consents. No material approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (a) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document, (b) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (c) the perfection or maintenance of the Liens created under the Collateral Documents (including the priority thereof) or (d) the exercise by the Administrative Agent or any Lender of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents, except for (i) filings necessary to perfect the Liens on the Collateral granted by the Loan Parties in favor of the Secured Parties, and (ii) the approvals, consents, exemptions, authorizations, actions, notices and filings which have been duly obtained, taken, given or made and are in full force and effect.

SECTION 5.04. Binding Effect. This Agreement and each other Loan Document has been duly executed and delivered by each Loan Party that is party thereto. This Agreement and each other Loan Document constitutes, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, subject to the effects of Debtor Relief Laws and by general principles of equity (whether considered in a proceeding in equity or law).

SECTION 5.05. Financial Statements; No Material Adverse Effect. (a) (i) The Audited Financial Statements and the Unaudited Financial Statements fairly present in all material respects the financial condition of Holdings or ABBI, as applicable, and their respective Subsidiaries as of the dates thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the periods covered thereby, except as otherwise expressly noted therein subject, in the case of the Unaudited Financial Statements, to changes resulting from normal year-end adjustments, audit adjustments and absence of footnotes. During the period from December 31, 2006 to and including the Closing Date, other than the Spin-off there has been (i) no sale, transfer or other disposition by ABBI or Holdings or any of their respective Subsidiaries of any material part of the business or property of ABBI or Holdings or any of their respective Subsidiaries, taken as a whole and (ii) no purchase or other acquisition by ABBI or Holdings or any of their respective Subsidiaries of any business or property (including any Equity Interests of any other Person) material in relation to the consolidated financial condition of ABBI or Holdings and their respective Subsidiaries, in each case, which is not reflected in the foregoing financial statements or in the notes thereto or has not otherwise been disclosed in writing to the Lenders prior to the Closing Date.

(ii) Holdings has made available to Administrative Agent the unaudited consolidated balance sheet of Holdings in the format set forth on Schedule 5.05(a)(ii)-A at (x) December 31, 2006 and (y) September 30, 2007 (the “Derived Balance Sheets”) and the

-95-

unaudited consolidated statements of income (and the line items (including depreciation) necessary to calculate a reconciliation of such income to EBITDA and adjusted EBITDA) of Holdings in the format set forth on Schedule 5.05(a)(ii)-B for (x) the fiscal year ended December 31, 2006 and (y) the nine months ended September 30, 2006 and September 30, 2007 (in each case, as derived from the elimination of the historical results of operations of the ABB Business, as reflected in, or prepared using the principles and methodologies for the financial statements contained in, the Form 10 Registration Statement of New Abraxis, Inc. (File No. 001-33657) filed with the SEC on November 2, 2007 (“Form 10 Registration Statement”), from the historical results of operations of ABBI contained in its Annual Report on Form 10-K for the year ended December 31, 2006 and Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2007) (such consolidated statements of income, together with the Derived Balance Sheets, the “Derived Financial Statements”). The Derived Financial Statements have been presented in good faith, based on assumptions believed by Holdings and the U.S. Borrower to be reasonable as of the date of delivery thereof, and present fairly in all material respects the estimated financial position of the APP Business and its estimated results of operations as of and for the periods covered thereby. The financial statements of ABBI filed with the SEC as of and for (x) the fiscal year ended December 31, 2006 and (y) the nine months ended September 30, 2007 were prepared in accordance with GAAP and present fairly in all material respects the financial position of ABBI and its results as of and for the periods covered thereby. The financial statements for the ABB Business included in the Form 10 Registration Statement were prepared in accordance with GAAP and present fairly in all material respects the estimated financial position of the ABB Business and its estimated results of operations as of and for the periods covered thereby.

(b) Since December 31, 2006, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have, as of the Closing Date, a Closing Date Material Adverse Effect, and thereafter, a Material Adverse Effect.

(c) The forecasts of consolidated balance sheets, income statements and cash flow statements of the U.S. Borrower and its Subsidiaries for each fiscal year ending after the Closing Date until the sixth anniversary of the Closing Date, copies of which have been furnished to the Administrative Agent prior to the Closing Date, have been prepared in good faith on the basis of the assumptions stated therein, which assumptions were believed to be reasonable at the time of preparation of such forecasts, it being understood that actual results may vary from such forecasts and that such variations may be material.

(d) As of the Closing Date, neither the U.S. Borrower nor any Subsidiary has any Indebtedness or other obligations or liabilities, direct or contingent (other than (i) the liabilities reflected on Schedule 5.05(d), (ii) obligations arising under this Agreement and the other Loan Documents and (iii) liabilities incurred in the ordinary course of business) that, either individually or in the aggregate, have had or could reasonably be expected to have a Closing Date Material Adverse Effect.

SECTION 5.06. Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrowers, threatened in writing or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against any Credit Agreement Party or any of their respective Subsidiaries or against any of their properties or

-96-

revenues that, either individually or in the aggregate, could reasonably be expected to have, as of the Closing Date, a Closing Date Material Adverse Effect, and thereafter, a Material Adverse Effect.

SECTION 5.07. No Default. No Credit Agreement Party nor any Subsidiary thereof is in default under or with respect to, or a party to, any Contractual Obligation (other than Contractual Obligations in respect of Indebtedness) that could, either individually or in the aggregate, reasonably be expected to have, as of the Closing Date, a Closing Date Material Adverse Effect, and thereafter, a Material Adverse Effect.

SECTION 5.08. Ownership of Property; Liens. Each Loan Party and each of its Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, or easements or other limited property interests in, all real property necessary in the ordinary conduct of its business, free and clear of all Liens except for minor defects in title that do not materially interfere with its ability to conduct its business or to utilize such assets for their intended purposes and Liens permitted by Section 7.01 and except where the failure to have such title could not reasonably be expected to have, individually or in the aggregate, as of the Closing Date, a Closing Date Material Adverse Effect, and thereafter, a Material Adverse Effect.

SECTION 5.09. Environmental Compliance. Except in each case as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect:

(a) Every Loan Party and its Subsidiaries (x) has complied and is in compliance with any and all applicable Environmental laws and (y) has received and is in compliance with all Environmental Permits required of it under applicable Environmental Laws to conduct its business or operations, and is not subject to any action to revoke, terminate, cancel, limit, amend or appeal any such Environmental Permit, and (z) has not received notice of any actual or potential liability for the investigation or remediation of any Release of Hazardous Materials or for any violation of Environmental Laws.

(b) There are no facts, circumstances or conditions relating to the past or present business or operations of any Loan Party or any of its Subsidiaries or any of their predecessors (including the disposal of any Hazardous Materials), or to any real property currently or, to the knowledge of any Loan Party, formerly owned or operated by any Loan Party or its Subsidiaries or any of their predecessors, that could reasonably be expected to give rise to any claim, proceeding or action, or to any liability, against any Loan Party or any of its Subsidiaries under any Environmental Law.

(c) No Loan Party nor any of its Subsidiaries has agreed to contractually assume or accept responsibility for any liability of any other person under Environmental Laws.

(d) To the knowledge of the Loan Parties, no Loan Party nor any of its Subsidiaries is required or reasonably expected to incur material capital expenditures during the current and the subsequent five fiscal years to reach or maintain compliance with existing or reasonably anticipated Environmental Laws.

(e) None of any Loan Party, any of its Subsidiaries, or their respective predecessors has currently or, to the knowledge of the Loan Parties, formerly owned,

-97-

leased or operated any property (x) listed or proposed for listing on the NPL, CERCLIS or any analogous foreign, state or local list or adjacent to any such property; (y) which has or had on it any underground or aboveground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been treated, stored or disposed of; and (z) which has or had on it any asbestos or asbestos containing material.

SECTION 5.10. Taxes. Each Credit Agreement Party and each of its Subsidiaries have filed all Federal, state, Commonwealth, local and other material tax returns and reports required to be filed (the “Returns”), and have paid all Federal, state, Commonwealth and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income, gross receipts or revenues or assets payable by them except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP. None of Holdings, the Borrowers or any of their respective Subsidiaries has received written notice of proposed tax assessment which, if required to be paid, would have a Material Adverse Effect and, to the best knowledge of a Responsible Officer of Holdings or the Borrowers or their respective subsidiaries, no such assessment has been threatened.

SECTION 5.11. ERISA Compliance. (a) Except as could not, either individually or in the aggregate, reasonably be expected to result in, as of the Closing Date, a Closing Date Material Adverse Effect, and thereafter, Material Adverse Effect, each Plan is in compliance with its terms, the applicable provisions of ERISA, the Code and other applicable Federal, state and Commonwealth Laws.

(b) (i) No ERISA Event has occurred during the five year period prior to the date on which this representation is made or deemed made with respect to any Pension Plan for which any liability remains unsatisfied; (ii) no Pension Plan has an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (iii) neither any Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither any Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would reasonably be expected to result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither any Loan Party nor any ERISA Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA, except, with respect to each of the foregoing clauses of this Section 5.11(b), as could not reasonably be expected, individually or in the aggregate, to result in, a Material Adverse Effect.

SECTION 5.12. Subsidiaries; Equity Interests. As of the Closing Date, no Loan Party has any Subsidiaries other than those specifically disclosed in Schedule 5.12, and all of the outstanding Equity Interests in Subsidiaries have been validly issued and, in the case of any such Subsidiaries that are corporations, are fully paid and nonassessable and all Equity Interests owned by Holdings and each other Loan Party are owned free and clear of all Liens except (i) those created under the Collateral Documents and (ii) any nonconsensual Lien that is permitted under Section 7.01. As of the Closing Date, Schedule 5.12 (a) sets forth the name and

-98-

jurisdiction of each Subsidiary of Holdings, (b) sets forth the ownership interest of Holdings, the U.S. Borrower and any other Subsidiary in each Subsidiary, including the percentage of such ownership and (c) identifies each Subsidiary, the Equity Interests of which are required to be pledged on the Closing Date pursuant to the Collateral and Guarantee Requirement.

SECTION 5.13. Margin Regulations; Investment Company Act. (a) No Credit Agreement Party is engaged or will engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of any Borrowings or drawings under any Letter of Credit will be used for the purpose of purchasing or carrying margin stock or any other purpose that violates Regulation U.

(b) No Credit Agreement Party, nor any Person “controlling” (within the meaning of the Investment Company Act of 1940) any Credit Agreement Party or any if its Subsidiaries is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

SECTION 5.14. Disclosure. No report, financial statement, certificate or other written information furnished by or on behalf of any Loan Party to any Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or any other Loan Document or delivered hereunder or under any other Loan Document (as modified or supplemented by other information so furnished) when taken as a whole contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; provided that, with respect to projected financial information and pro forma financial information, each Credit Agreement Party represents only that such information was prepared in good faith based upon assumptions believed by it to be reasonable at the time of preparation; it being understood that (i) such projections are not to be viewed as facts and are subject to significant uncertainties and contingencies, many of which are beyond such Credit Agreement Party’s control, (ii) no assurance can be given that any particular financial projections will be realized, and (iii) actual results may differ and such differences may be material.

SECTION 5.15. Intellectual Property; Licenses, Etc. Each of the Loan Parties and their Subsidiaries own, hold, license or possess the right to use, all of the trademarks, service marks, trade names, domain names, copyrights, patents, licenses, technology, software, know-how database rights, consents or approvals with respect to personal information, and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the operation of their respective businesses as currently conducted, except, either individually or in the aggregate, as could not reasonably be expected to have, as of the Closing Date, a Closing Date Material Adverse Effect, and thereafter, a Material Adverse Effect. The operation of the respective businesses of any Loan Party or Subsidiary as currently conducted does not infringe upon misuse, misappropriate or violate any IP Rights held by any Person except for such infringements, misuses, misappropriations or violations individually or in the aggregate, which could not reasonably be expected to have, as of the Closing Date, a Closing Date Material Adverse Effect, and thereafter, a Material Adverse Effect. No claim or litigation regarding any IP Rights, is pending or, to the knowledge of Holdings or the U.S. Borrower, as applicable, threatened against any Loan Party or Subsidiary, which, either individually or in the aggregate, could reasonably be expected to have, as of the Closing Date, a Closing Date Material Adverse Effect, and thereafter, a Material Adverse Effect.

-99-

SECTION 5.16. Solvency. On the Closing Date after giving effect to the Transaction, the Loan Parties, on a consolidated basis, are Solvent.

SECTION 5.17. Creation and Perfection of Security Interests. The Collateral and Guarantee Requirements shall have been met.

SECTION 5.18. Labor Matters. Except as, in the aggregate, could not reasonably be expected to have, as of the Closing Date, a Closing Date Material Adverse Effect, and thereafter, a Material Adverse Effect: (a) there are no strikes, lockouts, slowdowns, work stoppages or other labor disputes against any Credit Agreement Party or any of its Subsidiaries pending or, to the knowledge of any Credit Agreement Party, threatened; (b) hours worked by and payment made to employees of each Credit Agreement Party and each of its Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Laws dealing with such matters; and (c) there are no unfair labor practice complaint pending against any Credit Agreement Party or any of its Subsidiaries or, to the knowledge of any Credit Agreement Party or any of its Subsidiaries, threatened against any of them, before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against any Credit Agreement Party or any of its Subsidiaries or, to the knowledge of any Credit Agreement Party or any of its Subsidiaries, threatened against any of them; and (d) there are no equal employment opportunity charges or other claims of employment discrimination are pending or, to the knowledge of any Credit Agreement Party or any of its Subsidiaries, threatened against any Credit Agreement Party or any of its Subsidiaries.

ARTICLE VI

Affirmative Covenants

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder which is accrued and payable shall remain unpaid or unsatisfied (other than Obligations under Secured Hedge Agreements, Cash Management Obligations or contingent indemnification obligations, in any such case not then due and payable), or any Letter of Credit shall remain outstanding (unless such Letter of Credit has been Cash Collateralized pursuant to Section 2.03(g)), each Credit Agreement Party shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02 and 6.03) cause each Restricted Subsidiary to (or, in the case of Section 6.05(x) only, each Restricted Subsidiary that is a Material Subsidiary):

SECTION 6.01. Financial Statements. Deliver to the Administrative Agent for prompt further distribution by the Administrative Agent to each Lender:

(a) as soon as available, but in any event within ninety (90) days after the end of each fiscal year of Holdings beginning with the 2007 fiscal year, a consolidated balance sheet of Holdings and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, stockholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the

-100-

previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report and opinion of Ernst & Young LLP or any other independent registered public accounting firm of nationally recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit;

(b) as soon as available, but in any event within forty-five (45) days after the end of each of the first three (3) fiscal quarters of each fiscal year of Holdings, a consolidated balance sheet of Holdings and its Subsidiaries as at the end of such fiscal quarter, and the related (i) consolidated statements of income or operations for such fiscal quarter and for such fiscal quarter and for the portion of the fiscal year then ended and (ii) consolidated statements of cash flows for the portion of the fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail and certified by a Responsible Officer of Holdings as fairly presenting in all material respects the financial condition, results of operations, stockholders’ equity and cash flows of Holdings and its Subsidiaries in accordance with GAAP, subject only to normal year-end adjustments, audit adjustments and the absence of footnotes;

(c) as soon as available, and in any event no later than 90 days after the end of each fiscal year of Holdings, a detailed consolidated budget for the following fiscal year (including a projected consolidated balance sheet of Holdings and its Subsidiaries as of the end of the following fiscal year, the related consolidated statements of projected cash flow and projected income and a summary of the material underlying assumptions applicable thereto), and, as soon as available, significant revisions, if any, of such budget and projections with respect to such fiscal year (collectively, the “Projections”); and

(d) simultaneously with the delivery of each set of consolidated financial statements referred to in Sections 6.01(a) and 6.01(b) above, the related consolidating financial statements reflecting the adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries (if any) from such consolidated financial statements, provided that Holdings shall not be obligated to provide consolidating financial statements for ReadyFlex Solutions, LLC as long as (and only so long as) the aggregate Fair Market Value of the assets of such Person does not exceed $100,000.

Notwithstanding the foregoing, the obligations in paragraphs (a) and (b) of this Section 6.01 may be satisfied by furnishing (A) Holdings’ Form 10-K or 10-Q, as applicable, filed with the SEC; provided that to the extent such information is in lieu of information required to be provided under Section 6.01(a), such materials are accompanied by a report and opinion of Ernst & Young LLP or any other independent registered public accounting firm of nationally recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit.

-101-

SECTION 6.02. Certificates; Other Information. Deliver to the Administrative Agent for prompt further distribution by the Administrative Agent to each Lender:

(a) No later than three (3) Business Days after the delivery of the financial statements referred to in Section 6.01(a), a certificate of its independent registered public accounting firm certifying such financial statements;

(b) No later than three (3) Business Days after the delivery of the financial statements referred to in Section 6.01(a) and (b), a duly completed Compliance Certificate signed by a Responsible Officer of Holdings;

(c) promptly after the same are publicly available, copies of all annual, regular, periodic and special reports and registration statements which any Credit Agreement Party files with the SEC (other than amendments to any registration statement (to the extent such registration statement, in the form it became effective, is delivered), exhibits to any registration statement and, if applicable, any registration statement on Form S-8) and in any case not otherwise required to be delivered to the Administrative Agent pursuant hereto;

(d) promptly after the furnishing thereof, copies of any material requests or material notices received by any Loan Party (other than in the ordinary course of business) or material statements or material reports furnished to any holder of debt securities of any Loan Party or of any of its Subsidiaries pursuant to the terms of any Third Party Financing Documentation in a principal amount greater than the Threshold Amount and not otherwise required to be furnished to the Lenders pursuant to any other clause of this Section 6.02;

(e) together with the delivery of each Compliance Certificate pursuant to Section 6.02(b) in connection with the delivery of financial statements pursuant to Section 6.01(a), (i) a report setting forth the information required by Section 3.03(c) of the Security Agreement or confirming that there has been no change in such information since the Closing Date or the date of the last such report), (ii) a description of each event, condition or circumstance during the last fiscal year covered by such Compliance Certificate requiring a mandatory prepayment under Section 2.05(b) and (iii) a list of each Subsidiary that identifies each Subsidiary as a Restricted or an Unrestricted Subsidiary as of the date of delivery of such Compliance Certificate; and

(f) promptly, such additional information regarding the business, legal, financial or corporate affairs of any Loan Party or any Subsidiary, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender through the Administrative Agent may from time to time reasonably request in writing.

Documents required to be delivered pursuant to Section 6.01 (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the U.S. Borrower posts such documents, or provides a link thereto on the U.S. Borrower’s website on the Internet at the website address listed on Schedule 12.02; or (ii) on which such documents are posted on the U.S. Borrower’s behalf on IntraLinks/IntraAgency or another relevant website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent);

-102-

provided that: (i) upon written request by the Administrative Agent, the U.S. Borrower shall deliver paper copies of such documents to the Administrative Agent for further distribution to each Lender until a written request to cease delivering paper copies is given by the Administrative Agent and (ii) the U.S. Borrower shall notify (which may be by facsimile or electronic mail) the Administrative Agent of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every instance the U.S. Borrower shall be required to provide executed copies (which may be delivered via pdf) of the Compliance Certificates required by Section 6.02(b) to the Administrative Agent. Each Lender shall be solely responsible for timely accessing posted documents or requesting delivery of paper copies of such documents from the Administrative Agent and maintaining its copies of such documents.

SECTION 6.03. Notices. Promptly, and in any event within three Business Days after any Responsible Officer of any Credit Agreement Party obtains knowledge thereof, notify the Administrative Agent:

(a) of the occurrence of any Default; and

(b) of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including arising out of or resulting from (i) breach or non-performance of, or any default or event of default under, a Contractual Obligation of any Loan Party or any Subsidiary, (ii) any dispute, litigation, investigation, proceeding or suspension between any Loan Party or any Subsidiary and any Governmental Authority, or (iii) the commencement of, or any material development in, any litigation or proceeding affecting any Loan Party or any Subsidiary, including pursuant to any applicable Environmental Laws or in respect of IP Rights or the assertion or occurrence of any noncompliance by any Loan Party or as any of its Subsidiaries with, or liability under, any Environmental Law or Environmental Permit or (iv) the occurrence of any ERISA Event.

Each notice pursuant to this Section shall be accompanied by a written statement of a Responsible Officer of the U.S. Borrower (x) that such notice is being delivered pursuant to Section 6.03(a) or (b) (as applicable) and (y) setting forth details of the occurrence referred to therein and stating what action the U.S. Borrower has taken and proposes to take with respect thereto.

SECTION 6.04. Payment of Taxes. Pay, discharge or otherwise satisfy as the same shall become due and payable, all its material obligations and liabilities in respect of material taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property; provided that no Credit Agreement Party nor any of the Restricted Subsidiaries shall be required to pay any such taxes, assessments, governmental charges or levies that are being contested in good faith and by proper proceedings if it has maintained adequate reserves with respect thereto in accordance with GAAP.

SECTION 6.05. Preservation of Existence, Etc. (x) Preserve, renew and maintain in full force and effect its legal existence under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 7.04 or 7.05 and (y) take all reasonable

-103-

action to maintain all rights, privileges (including its good standing), permits, licenses and franchises necessary or desirable in the normal conduct of its business, except (i) to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect or (ii) pursuant to a transaction permitted by Section 7.04 or 7.05.

SECTION 6.06. Maintenance of Properties. Except if the failure to do so could not reasonably be expected to have a Material Adverse Effect (a) maintain, preserve and protect all of its properties and equipment necessary in the operation of its business in good working order, repair and condition, ordinary wear and tear excepted and casualty or condemnation excepted, and (b) make all necessary renewals, replacements, modifications, improvements, upgrades, extensions and additions thereof or thereto in accordance with prudent industry practice.

SECTION 6.07. Maintenance of Insurance. Maintain with financially sound and reputable insurance companies, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts (after giving effect to any self-insurance reasonable and customary for similarly situated Persons engaged in the same or similar businesses as the Borrowers and the Restricted Subsidiaries) as are customarily carried under similar circumstances by such other Persons.

SECTION 6.08. Compliance with Laws. Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except if the failure to comply therewith could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

SECTION 6.09. Books and Records. Maintain proper books of record and account, in which entries that are full, true and correct in all material respects and are in conformity with GAAP consistently applied shall be made of all material financial transactions and matters involving the assets and business of each Credit Agreement Party and each of its Subsidiaries, as the case may be.

SECTION 6.10. Inspection Rights. Permit representatives and independent contractors of the Administrative Agent and each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the reasonable expense of the U.S. Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance written notice to the U.S. Borrower provided that, other than any such visits, inspections and examinations during the continuation of an Event of Default, only the Administrative Agent on behalf of the Lenders may exercise the rights of the Administrative Agent and the Lenders under this Section 6.10 and the Administrative Agent shall not exercise such rights more often than one (1) time during any calendar year absent the existence of an Event of Default; provided further that when an Event of Default exists, the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and upon reasonable advance notice.

-104-

SECTION 6.11. Covenant to Guarantee Obligations and Give Security. At the U.S. Borrower’s expense, take all action necessary or reasonably requested by the Administrative Agent to ensure that the Collateral and Guarantee Requirement continues to be satisfied, including:

(a) upon the formation or acquisition of any new direct or indirect wholly owned Domestic Subsidiary (in each case, other than an Unrestricted Subsidiary or an Excluded Subsidiary) by any Loan Party or the designation in accordance with Section 6.14 of any existing direct or indirect wholly owned Domestic Subsidiary as a Restricted Subsidiary (other than an Excluded Subsidiary):

(i) within thirty (30) days (or, in the case of Mortgages and the documents listed in Section 6.13(b), sixty (60) days) after such formation, acquisition or designation or such longer period as the Administrative Agent may agree in its discretion:

(A) cause each such Restricted Subsidiary that is required to become a Guarantor under the Collateral and Guarantee Requirement to furnish to the Administrative Agent a description of the real properties owned by such Restricted Subsidiary that have a Fair Market Value in excess of $5,000,000 in detail reasonably satisfactory to the Administrative Agent;

(B) cause (x) each such Restricted Subsidiary that is required to become a Guarantor pursuant to the Collateral and Guarantee Requirement to duly execute and deliver to the Administrative Agent or the Collateral Agent (as appropriate) Guarantee Supplements, Mortgages, Security Agreement Supplements, Intellectual Property Security Agreements and other security agreements and documents (including, with respect to Mortgages, the documents listed in Section 6.13(b)), as reasonably requested by and in form and substance reasonably satisfactory to the Administrative Agent (consistent with the Mortgages, Security Agreements, Intellectual Property Security Agreements and other security agreements in effect on the Closing Date), in each case granting Liens required by the Collateral and Guarantee Requirement and (y) each direct or indirect parent of each such Restricted Subsidiary that is required to be a Guarantor pursuant to the Collateral and Guarantee Requirement to duly execute and deliver to the Administrative Agent such Security Agreement Supplements and other security agreements as reasonably requested by and in form and substance reasonably satisfactory to the Administrative Agent (consistent with the Collateral Documents in effect on the Closing Date), in each case granting Liens required by the Collateral and Guarantee Requirement;

(C) (x) cause each such Restricted Subsidiary that is required to become a Guarantor pursuant to the Collateral and Guarantee Requirement to deliver any and all certificates representing Equity Interests (to the

-105-

extent certificated) that are required to be pledged pursuant to the Collateral and Guarantee Requirement, accompanied by undated stock powers or other appropriate instruments of transfer executed in blank and instruments evidencing the Indebtedness held by such Restricted Subsidiary and required to be pledged pursuant to the Collateral Documents, indorsed in blank to the Collateral Agent and (y) cause each direct or indirect parent of such Restricted Subsidiary that is required to be a Guarantor pursuant to the Collateral and Guarantee Requirement to deliver any and all certificates representing the outstanding Equity Interests (to the extent certificated) of such Restricted Subsidiary that are required to be pledged pursuant to the Collateral and Guarantee Requirement, accompanied by undated stock powers or other appropriate instruments of transfer executed in blank and instruments evidencing the intercompany Indebtedness issued by such Restricted Subsidiary and required to be pledged in accordance with the Collateral Documents, indorsed in blank to the Collateral Agent;

(D) take and cause such Restricted Subsidiary and each direct or indirect parent of such Restricted Subsidiary to take whatever action (including the recording of Mortgages, the filing of Uniform Commercial Code financing statements and delivery of stock and membership interest certificates) may be necessary to vest in the Collateral Agent (or in any representative of the Collateral Agent designated by it) valid Liens required by the Collateral and Guarantee Requirement, enforceable against all third parties in accordance with their terms, subject to the effects of Debtor Relief Laws and by general principles of equity (whether considered in a proceeding in equity or law),

(ii) in the case of any such wholly owned Domestic Subsidiary having assets with a Fair Market Value in excess of $15,000,000 (determined at the time of such formation, acquisition or designation and after giving effect to any transfers and Investments to be made in such Subsidiary thereafter as contemplated by any transaction relating to such formation, acquisition or designation), within thirty (30) days after the request therefor by the Administrative Agent, deliver to the Administrative Agent a signed copy of an opinion, addressed to the Administrative Agent and the other Secured Parties, of counsel for the Loan Parties reasonably acceptable to the Administrative Agent as to such matters set forth in this Section 6.11(a) as the Administrative Agent may reasonably request, and

(iii) as promptly as practicable after the request therefor by the Administrative Agent (but in any event no earlier than sixty (60) days after the Closing Date), deliver to the Administrative Agent with respect to each parcel of real property located in the United States, its territories and possessions (including Puerto Rico) that is owned the U.S. Borrower or any of its Restricted Subsidiaries and has a Fair Market Value in excess of $10,000,000, any existing title reports, surveys or environmental assessment reports.

-106-

(b) after the Closing Date, concurrently with (x) the acquisition of any material personal property by any Loan Party, or (y) the acquisition of any owned real property by any Loan Party with a Fair Market Value in excess of $10,000,000, and such personal property or owned real property shall not already be subject to a perfected Lien pursuant to the Collateral and Guarantee Requirement, the U.S. Borrower shall give notice thereof to the Administrative Agent and promptly thereafter shall cause such assets to be subjected to a Lien to the extent required by the Collateral and Guarantee Requirement and will take, or cause the relevant Loan Party to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect or record such Lien, including, as applicable, the actions referred to in Section 6.13(b) with respect to real property.

SECTION 6.12. Compliance with Environmental Laws. Except, in each case, to the extent that the failure to do so could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, comply with, and take all commercially reasonable actions to cause all lessees and other Persons operating or occupying its properties to comply with all applicable Environmental Laws and Environmental Permits; obtain and renew all Environmental Permits necessary for its operations and properties; generate, use, treat, store or dispose of Hazardous Materials in compliance with all applicable Environmental Laws; and, in each case to the extent required by Environmental Laws, conduct any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials from any of its properties, in accordance with the requirements of all Environmental Laws.

SECTION 6.13. Further Assurances and Post-Closing Conditions. (a) Promptly upon reasonable request by the Administrative Agent (i) correct any material defect or error that may be discovered in the execution, acknowledgment, filing or recordation of any Collateral Document or other document or instrument relating to any Collateral, and (ii) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as the Administrative Agent may reasonably request from time to time in order to carry out more effectively the purposes of the Collateral Documents.

(b) In the case of any real property referred to in Section 6.11, provide the Administrative Agent with Mortgages with respect to such owned real property within sixty (60) days (or such later date as may be agreed to by the Administrative Agent) of the acquisition of such real property, or within sixty (60) days of the Closing Date in the case of real property described in Schedule 1.01A, in each case together with:

(i) evidence that counterparts of the Mortgages have been duly executed, acknowledged and delivered and are in form suitable for filing or recording in all filing or recording offices that the Administrative Agent may deem reasonably necessary or desirable in order to create a valid and subsisting perfected Lien on the property and/or rights described therein in favor of the Administrative Agent or the Collateral Agent (as appropriate) for the benefit of the Secured Parties and that all filing and recording taxes and fees have been paid or otherwise provided for in a manner reasonably satisfactory to the Administrative Agent;

-107-

(ii) fully paid American Land Title Association Lender’s Extended Coverage title insurance policies or the equivalent or other form available in each applicable jurisdiction (the “Mortgage Policies”) in form and substance, with endorsements and in amount, reasonably acceptable to the Administrative Agent (not to exceed the value of the real properties covered thereby), issued, coinsured and reinsured by title insurers reasonably acceptable to the Administrative Agent, insuring the Mortgages to be valid subsisting Liens on the property described therein, free and clear of all defects and encumbrances, subject to Liens permitted by Section 7.01 and providing for such other affirmative insurance (including endorsements for future advances under the Loan Documents) and such coinsurance and direct access reinsurance as the Administrative Agent may reasonably request;

(iii) opinions of local counsel for the Loan Parties in states in which the real properties are located, with respect to the enforceability and perfection of the Mortgages and any related fixture filings in form and substance reasonably satisfactory to the Administrative Agent;

(iv) flood certificates covering each Mortgaged Property in form and substance acceptable to the Collateral Agent, certified to the Collateral Agent in its capacity as such and certifying whether or not each such Mortgaged Property is located in a flood hazard zone by reference to the applicable FEMA map; and

(v) such other evidence that all other actions that the Administrative Agent may reasonably deem necessary or desirable in order to create valid and subsisting Liens on the property described in the Mortgages has been taken.

SECTION 6.14. Designation of Subsidiaries. The board of directors of Holdings may at any time designate any Restricted Subsidiary as an Unrestricted Subsidiary or any Unrestricted Subsidiary as a Restricted Subsidiary; provided that (i) immediately before and after such designation, no Default shall have occurred and be continuing, (ii) immediately after giving effect to such designation, the Credit Agreement Parties shall be in Pro Forma Compliance with the Financial Covenant, (iii) no Borrower may be designated as an Unrestricted Subsidiary, (iv) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for the purpose of any Third Party Financing, as applicable, (v) no Restricted Subsidiary may be designated as an Unrestricted Subsidiary if it was previously designated an Unrestricted Subsidiary, and (vi) the Investment resulting from the designation of such Subsidiary as an Unrestricted Subsidiary as described in the immediately succeeding sentence is permitted by Section 7.02(n). The designation of any Subsidiary as an Unrestricted Subsidiary shall constitute an Investment by the U.S. Borrower therein at the date of designation in an amount equal to the Fair Market Value of the net assets of the respective Subsidiary at the time such Subsidiary is designated an Unrestricted Subsidiary of the U.S. Borrower’s. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Subsidiary existing at such time.

-108-

SECTION 6.15. Corporate Separateness. (a) Satisfy, and cause each of its Subsidiaries to satisfy, customary corporate and other formalities, including, as applicable, the holding of regular board of directors’ and shareholders’ meetings or action by directors or shareholders without a meeting and the maintenance of corporate offices and records.

(b) Ensure that neither it nor any of its Subsidiaries shall take any action, or conduct its affairs in a manner, which is likely to result in the corporate or other similar existence of it or such Subsidiary being ignored, or in the assets and liabilities of it or any of its Subsidiaries being substantively consolidated with those of any other such Person or any Unrestricted Subsidiary in a bankruptcy, reorganization or other insolvency proceeding.

ARTICLE VII

Negative Covenants

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder which is accrued and payable shall remain unpaid or unsatisfied (other than Obligations under Secured Hedge Agreements, Cash Management Obligations or contingent indemnification obligations, in any such case, not then due and payable), or any Letter of Credit shall remain outstanding (unless such Letter of Credit has been Cash Collateralized pursuant to Section 2.03(g)), no Credit Agreement Party shall, nor shall it permit any of its Restricted Subsidiaries to, directly or indirectly:

SECTION 7.01. Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:

(a) Liens pursuant to any Loan Document;

(b) Liens existing on the date hereof and listed on Schedule 7.01(b);

(c) Liens for taxes, assessments or governmental charges which are not overdue for a period of more than thirty (30) days or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

(d) statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen, repairmen, construction contractors or other like Liens arising in the ordinary course of business which secure amounts not overdue for a period of more than thirty (30) days (or if more than thirty (30) days overdue, are unfiled and no other action has been taken to enforce such Lien) or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

(e) (i) pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security or similar legislation and (ii) pledges and deposits in the ordinary course of business securing liability for premiums, reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to Holdings, the U.S. Borrower or any Restricted Subsidiary;

-109-

(f) deposits to secure the performance of bids, trade contracts, governmental contracts and leases (other than indebtedness for borrowed money), statutory obligations, surety, stay, customs and appeal bonds, performance bonds and other obligations of a like nature (including those to secure health, safety and environmental obligations) or deposits for contested taxes or import duties, in each case incurred in the ordinary course of business;

(g) easements, exceptions or irregularities in title, rights-of-way, restrictions (including zoning restrictions), encroachments, protrusions and other similar charges or encumbrances and minor title defects affecting real property which, in the aggregate, do not in any case materially interfere with the ordinary conduct of the business of the U.S. Borrower or any Subsidiary;

(h) Liens securing judgments for the payment of money not constituting an Event of Default under Section 8.01(h); provided that the aggregate amount of all cash and the Fair Market Value of all other property subject to all Liens permitted by this clause (h) shall not at any time exceed the Threshold Amount;

(i) Liens securing Indebtedness permitted under Section 7.03(e); provided that (i) such Liens attach concurrently with or within two hundred seventy (270) days (or such shorter period of time in which the related Indebtedness must be incurred pursuant to Section 7.03(e)) after the acquisition, repair, replacement, construction or improvement (as applicable) of the property subject to such Liens, (ii) such Liens do not at any time encumber any property other than the property financed by such Indebtedness, accessions to such property and the proceeds and the products thereof and (iii) with respect to Capitalized Leases, such Liens do not at any time extend to or cover any assets and accessions to such assets other than the assets subject to such Capitalized Leases; provided that individual financings of equipment provided by one lender may be cross collateralized to other financings of equipment provided by such lender;

(j) leases, licenses, subleases or sublicenses granted to others in the ordinary course of business which do not (i) interfere in any material respect with the business of the U.S. Borrower or any Restricted Subsidiary or (ii) secure any Indebtedness;

(k) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business;

(l) Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection, and (ii) in favor of a banking institution arising as a matter of law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry;

(m) Liens (i) on cash advances in favor of the seller of any property to be acquired in an Investment permitted pursuant to Sections 7.02(g), (i) and (n) to be applied

-110-

against the purchase price for such Investment, and (ii) consisting of an agreement to Dispose of any property in a Disposition permitted under Section 7.05, in each case, solely to the extent such Investment or Disposition, as the case may be, would have been permitted on the date of the creation of such Lien;

(n) Liens on property of any Foreign Subsidiary securing Indebtedness of the applicable Foreign Subsidiary permitted pursuant to Section 7.03(n);

(o) Liens in favor of the Borrowers or a Restricted Subsidiary securing Indebtedness permitted under Section 7.03(d); provided that any such Lien is subordinated to the same extent as any related Indebtedness is required to be subordinated pursuant to Section 7.03(d);

(p) any interest or title of a lessor, sublessor, licensor or sublessor under leases entered into by the U.S. Borrower or any of the Restricted Subsidiaries in the ordinary course of business;

(q) Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by the U.S. Borrower or any of the Restricted Subsidiaries in the ordinary course of business permitted by this Agreement;

(r) Liens deemed to exist in connection with Investments in repurchase agreements permitted under Section 7.02; provided that such Liens do not extend to any assets other than those that are the subject of such repurchase agreement and the products or proceeds thereof;

(s) [reserved];

(t) Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit, automatic clearinghouse accounts or sweep accounts of Holdings, the Borrowers or any Restricted Subsidiary to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of Holdings, the Borrowers and the Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of the Borrowers or Restricted Subsidiary in the ordinary course of business;

(u) Liens solely on any cash earnest money deposits made by any Borrower or any Restricted Subsidiary in connection with any letter of intent or purchase agreement related to any acquisition permitted hereunder;

(v) ground leases or subleases, licenses or sublicenses in respect of real property on which facilities owned or leased by the U.S. Borrower or any of its Subsidiaries are located;

(w) any modifications, replacements, renewals or extensions of any Lien permitted by clause (b) of this Section 7.01; provided that (i) the Lien does not extend to any additional property other than (A) after-acquired property that is affixed or

-111-

incorporated into the property covered by such Lien or financed by Indebtedness permitted under Section 7.03, and (B) proceeds and products thereof, and (ii) the renewal, extension or refinancing of the obligations secured or benefited by such Liens is permitted by Section 7.03;

(x) Liens existing or created on property at the time of its acquisition or existing or created on the property of any Person at the time such Person becomes a Restricted Subsidiary (other than by designation as a Restricted Subsidiary pursuant to Section 6.14), in each case after the date hereof (other than Liens on the Equity Interests of any Person that becomes a Restricted Subsidiary); provided that (i) such Lien does not extend to or cover any other assets or property (other than the proceeds or products thereof and other than after-acquired property subjected to a Lien securing Indebtedness and other obligations incurred prior to such time and which Indebtedness and other obligations are permitted hereunder that require, pursuant to their terms at such time, a pledge of after-acquired property, it being understood that such requirement shall not be permitted to apply to any property to which such requirement would not have applied but for such acquisition), (ii) the Indebtedness secured thereby is permitted under Section 7.03(g), and (iii) the aggregate principal amount of any such Indebtedness secured by Liens incurred pursuant to this clause (x) shall not exceed $30,000,000;

(y) Liens arising from the Manufacturing Agreement, the Separation Agreement, the Pfizer Lease and the Separation Lease Agreements, in each case consisting of easements, rights-of-way, inspection rights, restrictions, encroachments and other similar charges or encumbrances, in each case not securing Indebtedness and not materially interfering with the conduct of the business of Holdings or any of its Subsidiaries; and

(z) other Liens securing Indebtedness outstanding or other obligations in an aggregate amount not to exceed $20,000,000 at any time outstanding.

Notwithstanding the foregoing, no Liens on any IP Collateral shall be permitted at any time, other than pursuant to Section 7.01(a), (b), (c), (h), (j), (m)(ii), (n), (o), (p), (q), (t)(iii), (w), (x), (y) or (z).

SECTION 7.02. Investments. Make or hold any Investments, except:

(a) Investments by any of the Borrowers or a Restricted Subsidiary in assets that were Cash Equivalents when such Investment was made;

(b) loans or advances to officers, directors and employees of Holdings, the Borrowers and the Restricted Subsidiaries (i) for reasonable and customary business-related travel, entertainment, relocation and analogous ordinary business purposes in an aggregate principal amount (without giving effect to any write-off or write-down thereof) not to exceed $2,500,000, and (ii) in connection with such Person’s purchase of Equity Interests of Holdings (or any direct or indirect parent thereof);

(c) Investments (i) by Holdings, the Borrowers or any Restricted Subsidiary in any U.S. Loan Party (excluding Holdings), (ii) by any U.S. Loan Party in any P.R. Loan Party in an aggregate amount not to exceed $50,000,000 at any time, (iii) by any P.R.

-112-

Loan Party in any other P.R. Loan Party and (iv) by any Restricted Subsidiary that is not a Loan Party in any other such Restricted Subsidiary that is also not a Loan Party;

(d) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors and other credits to suppliers in the ordinary course of business;

(e) Investments consisting of Liens, Indebtedness, fundamental changes, Dispositions and Restricted Payments permitted under Sections 7.01, 7.03, 7.04, 7.05 and 7.06, respectively;

(f) Investments existing or contemplated on the date hereof and set forth on Schedule 7.02(f) and any modification, replacement, renewal, reinvestment or extension thereof; provided that (x) the amount of the original Investment is not increased except by the terms of such Investment or as otherwise permitted by this Section 7.02 and (y) any Investment in the form of Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be on terms no less favorable to the Lenders than the subordination terms set forth in the Intercompany Subordination Agreement;

(g) Investments in Swap Contracts permitted under Section 7.03;

(h) promissory notes and other noncash consideration received in connection with Dispositions permitted by Section 7.05;

(i) the purchase or other acquisition by the U.S. Borrower or any Restricted Subsidiary of assets constituting a business unit, line of business or division of a third Person, or Equity Interests in a third Person that, as a result and upon the consummation thereof, will be a Subsidiary of the U.S. Borrower (including as a result of a merger or consolidation); provided that, with respect to each purchase or other acquisition made pursuant to this Section 7.02(i) (each, a “Permitted Acquisition”):

(A) subject to clause (B) below, substantially all property, assets and businesses acquired in such purchase or other acquisition shall constitute Collateral securing the U.S. Loan Parties’ Obligations and each applicable U.S. Loan Party and any such newly created or acquired Subsidiary (and, to the extent required under the Collateral and Guarantee Requirement, the Subsidiaries of such created or acquired Subsidiary) shall be a U.S. Subsidiary Guarantor and shall have complied with the requirements of Section 6.11, within the times specified therein;

(B) the aggregate amount of consideration paid in respect of acquisitions of (and of assets that are held by) Persons that are not U.S. Loan Parties shall not, when added to the aggregate amount of Investments made pursuant to Section 7.02(n) in Persons that are not U.S. Loan Parties (including the amount of any deemed Investments made pursuant to a designation of a Subsidiary as an Unrestricted Subsidiary pursuant to Section 6.14), exceed $50,000,000;

-113-

(C) after giving effect to such purchase or acquisition, the U.S. Borrower and its Restricted Subsidiaries shall be in compliance with Section 7.07;

(D) immediately before and immediately after giving Pro Forma Effect to any such purchase or other acquisition, (x) no Default shall have occurred and be continuing and (y) the Credit Agreement Parties shall be in Pro Forma Compliance with the Financial Covenant;

(E) the U.S. Borrower shall have delivered to the Administrative Agent, on behalf of the Lenders, no later than five (5) Business Days prior to the date on which any such purchase or other acquisition is consummated, a certificate of a Responsible Officer, in form and substance reasonably satisfactory to the Administrative Agent, certifying that all of the requirements set forth in this clause (i) have been satisfied or will be satisfied on or prior to the consummation of such purchase or other acquisition, and containing calculations (in reasonable detail) showing satisfaction with preceding clauses (B) and (D)(y) and succeeding clause (F); and

(F) after giving effect to the consummation of the respective Permitted Acquisition and any financing thereof, the aggregate Revolving Credit Commitment exceeds the aggregate Outstanding Amount of Revolving Credit Loans, L/C Obligations, and Swing Line Loans by at least $40,000,000;

(j) the Transaction;

(k) Investments in the ordinary course of business consisting of endorsements for collection or deposit and customary trade arrangements with customers consistent with past practices;

(l) Investments (including debt obligations and Equity Interests) received in connection with the bankruptcy or reorganization of suppliers and customers or in settlement of delinquent obligations of, or other disputes with, customers and suppliers arising in the ordinary course of business or upon the foreclosure with respect to any secured Investment or other transfer of title with respect to any secured Investment;

(m) loans and advances to Holdings (or any direct or indirect parent thereof) in lieu of, and not in excess of the amount of (after giving effect to any other loans, advances or Restricted Payments in respect thereof), Restricted Payments to the extent permitted to be made to Holdings (or such parent) in accordance with Sections 7.06(g);

(n) so long as (i) no Default has occurred and is continuing or would result therefrom, (ii) the Credit Agreement Parties are in Pro Forma Compliance with the Financial Covenant (iii) after giving effect thereto, the aggregate Revolving Credit Commitment exceeds the aggregate Outstanding Amount of Revolving Credit Loans, L/C Obligations, and Swing Line Loans by at least $40,000,000 and (iv) the Available Amount Leverage Condition has been satisfied, other Investments by each of the U.S. Borrower and the Restricted Subsidiaries that do not exceed, in the aggregate, an amount equal to the Available Amount at such time; provided that the aggregate amount of

-114-

Investments made pursuant to this clause (n) in Persons that are not U.S. Loan Parties (including the amount of any deemed Investment made pursuant to a designation of a Subsidiary as an Unrestricted Subsidiary pursuant to Section 6.14), when added to the aggregate amount of consideration paid in respect of acquisitions of (and of assets that are held by) Persons that are not U.S. Loan Parties pursuant to Section 7.02(i) shall not at any time exceed $50,000,000;

(o) advances of payroll payments to employees in the ordinary course of business;

(p) Investments of a Restricted Subsidiary acquired after the Closing Date or of a corporation merged into the U.S. Borrower or merged or consolidated with a Restricted Subsidiary in accordance with Section 7.04 after the Closing Date, to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;

(q) (i) Investments constituting Guarantees made by any U.S. Loan Party in respect of any Indebtedness of any P.R. Loan Party to the extent permitted under Section 7.02(c)(ii) and (ii) Guarantees by any Credit Agreement Party or any Restricted Subsidiary of leases (other than Capitalized Leases) or of other obligations that do not constitute Indebtedness, in each case entered into in the ordinary course of business; and

(r) so long as no Default exists or would result therefrom, other Investments by any of the Borrowers and the Restricted Subsidiaries that do not exceed $25,000,000 in the aggregate;

provided that no Investment in an Unrestricted Subsidiary that would otherwise be permitted under this Section 7.02 shall be permitted hereunder, to the extent that any portion of such Investment is used to make any prepayments, redemptions, purchases, defeasances and other payments in respect of Third Party Financings.

SECTION 7.03. Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:

(a) Indebtedness of any Credit Agreement Party and any of its Subsidiaries under the Loan Documents;

(b) Indebtedness outstanding on the date hereof and listed on Schedule 7.03(b) and any Permitted Refinancing thereof;

(c) Guarantees by (i) Holdings, the U.S. Borrower and the Domestic Restricted Subsidiaries in respect of Indebtedness of the U.S. Borrower or any Domestic Restricted Subsidiary otherwise permitted hereunder, (ii) the P.R. Borrower and its Restricted Subsidiaries in respect of Indebtedness of the P.R. Borrower and its Restricted Subsidiaries otherwise permitted hereunder and (iii) by Holdings, the U.S. Borrower and the Domestic Restricted Subsidiaries in respect of Indebtedness of the P.R. Borrower and its Restricted Subsidiaries to the extent permitted by Section 7.02(c)(ii); provided that in

-115-

each case (A) no Guarantee by any Restricted Subsidiary of any Indebtedness outstanding pursuant to Section 7.03(g) or any other Third Party Financing shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth in the respective Subsidiary Guaranty and (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantees of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination provisions applicable to such Indebtedness;

(d) to the extent arising from Investments made pursuant to Section 7.02(c), Indebtedness of the U.S. Borrower, the P.R. Borrower or any Restricted Subsidiary owing to Holdings, the U.S. Borrower, the P.R. Borrower or any other Restricted Subsidiary; provided that, all such Indebtedness shall be subject to the subordination terms set forth in the Intercompany Subordination Agreement;

(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) of the Borrowers and the Restricted Subsidiaries financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets, other than software; provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days (or, in the case of Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(f), one hundred eighty (180) days) after the applicable acquisition, construction, repair, replacement or improvement and (ii) any Permitted Refinancing of any such Indebtedness pursuant to immediately preceding clause (i), provided that the aggregate principal amount of Indebtedness permitted under this clause (e) shall not exceed $10,000,000 at any time outstanding;

(f) Indebtedness in respect of Swap Contracts designed to hedge against interest rates, foreign exchange rates or commodity pricing risks incurred in the ordinary course of business and not for speculative purposes;

(g) Indebtedness of the U.S. Borrower; provided that (x) both immediately prior and after giving effect to the incurrence of any such Indebtedness, (1) no Default shall exist or result therefrom, (2) the Credit Agreement Parties shall be in Pro Forma Compliance with the Financial Covenant and (3) the Total Leverage Ratio, calculated on a Pro Forma Basis, shall not exceed 5.00:1.00, (y) such Indebtedness matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the Maturity Date of the Term Loans and (z) unless the respective Lien is incurred in accordance with Section 7.01(x), all Indebtedness incurred pursuant to this clause (g) shall be unsecured;

(h) Indebtedness representing deferred compensation to employees of Holdings, the Borrowers and the Restricted Subsidiaries incurred in the ordinary course of business;

(i) Indebtedness consisting of promissory notes issued by Holdings to current or former officers, directors and employees, their respective estates, executors, administrators, heirs, legatees, distributees, spouses or former spouses to finance the acquisition, retirement, purchase or redemption of Equity Interests of Holdings permitted

-116-

by Section 7.06; provided that (i) the aggregate principal amount of all such Indebtedness does not exceed $2,500,000 at any time outstanding, (ii) all such Indebtedness shall be subordinated to the Obligations on terms reasonably satisfactory to the Administrative Agent and (iii) the aggregate amount of all cash payments (whether principal or interest) made by the Loan Parties in respect of such notes in any calendar year, when combined with the aggregate amount of Restricted Payments made pursuant to Section 7.06(f) in such calendar year, shall not exceed $5,000,000, provided further that any unused amounts in any calendar year may be carried over to succeeding calendar years, so long as the aggregate amount of all cash payments made in respect of such notes in any calendar year (after giving effect to such carry forward), when aggregated with the aggregate amount of Restricted Payments made pursuant to Section 7.06(f) in such calendar year (after giving effect to such carry forward), shall not exceed $7,500,000;

(j) Indebtedness incurred by Holdings, the Borrowers or the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in any such case constituting indemnification obligations or obligations in respect of purchase price adjustments or other similar adjustments;

(k) Cash Management Obligations and other Indebtedness in respect of netting services, overdraft protections, automatic clearinghouse arrangements and similar arrangements in each case in connection with deposit accounts;

(l) Indebtedness incurred by the Borrowers or any of the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;

(m) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the U.S. Borrower or any of the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees, warehouse receipts, banker’s acceptances or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practices;

(n) Indebtedness of (i) any Foreign Subsidiary of the U.S. Borrower to local financial institutions for working capital purposes and (ii) any Subsidiary that is not a Loan Party, in an aggregate principal amount not to exceed for all such Indebtedness outstanding pursuant to this clause (n) $5,000,000 at any time outstanding;

(o) Indebtedness consisting of (i) financing of insurance premiums and (ii) take-or-pay obligations, in each case in the ordinary course of business;

-117-

(p) so long as no Default exists or would result from the incurrence thereof, other Indebtedness by any of the Borrowers and the Restricted Subsidiaries that does not exceed $50,000,000 in the aggregate;

(q) Indebtedness consisting of obligations of Holdings, the U.S. Borrower or the Restricted Subsidiaries under deferred compensation to employees or management of Holdings or any of its Subsidiaries or other similar arrangements with employees or management, in each case incurred by such Person in connection with the Transaction, Permitted Acquisitions or other Investments expressly permitted hereunder; and

(r) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (q) above.

SECTION 7.04. Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that:

(a) any Restricted Subsidiary may merge with any one or more other Restricted Subsidiaries; provided that (i) when any Restricted Subsidiary that is a U.S. Loan Party is merging with another Restricted Subsidiary, a U.S. Loan Party shall be the continuing or surviving Person and (ii) when any Restricted Subsidiary that is a P.R. Loan Party is merging with another Restricted Subsidiary other than a U.S. Loan Party, a P.R. Loan Party shall be the continuing or surviving Person;

(b) any Subsidiary may liquidate or dissolve or change its legal form if (x) (i) Holdings or the U.S. Borrower determines in good faith that such action is in the best interests of Holdings or the U.S. Borrower and its Subsidiaries and (ii) such action is not materially disadvantageous to the Lenders and (y) to the extent such Restricted Subsidiary is a Loan Party, any assets or business not otherwise disposed of or transferred in accordance with Section 7.02 or 7.05, or, in the case of any such business, discontinued, shall be transferred to, or otherwise owned or conducted by, another Loan Party after giving effect to such liquidation or dissolution;

(c) any Restricted Subsidiary may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to the U.S. Borrower or to another Restricted Subsidiary; provided that (1) if the transferor in such a transaction is a U.S. Loan Party, then (i) the transferee must either be a U.S. Loan Party or (ii) to the extent constituting an Investment, such Investment must be a permitted Investment in or Indebtedness of a Restricted Subsidiary which is not a U.S. Loan Party in accordance with Sections 7.02 and 7.03, respectively and (2) if the transferor of such property is a P.R. Loan Party, (i) the transferee thereof must either be a P.R. Loan Party or (ii) to the extent such transaction constitutes an Investment, such Investment must be a permitted Investment in or Indebtedness of a Restricted Subsidiary which is not a P.R. Loan Party in accordance with Sections 7.02 and 7.03, respectively;

-118-

(d) so long as no Default exists or would result therefrom, any Restricted Subsidiary may merge with any other Person in order to effect an Investment permitted pursuant to Section 7.02; provided that the continuing or surviving Person shall be a Restricted Subsidiary, which together with each of its Restricted Subsidiaries, shall, to the extent required, have complied with the requirements of Section 6.11;

(e) the Transactions occurring on the Closing Date; and

(f) so long as no Default exists or would result therefrom, a merger, dissolution, liquidation, consolidation or Disposition, the purpose of which is to effect a Disposition permitted pursuant to Section 7.05.

SECTION 7.05. Dispositions. Make any Disposition or enter into any agreement to make any Disposition, except:

(a) Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business and Dispositions of property no longer used or useful in the conduct of the business of the Borrowers and the Restricted Subsidiaries;

(b) Dispositions of inventory and goods held for sale and assets of de minimis value, in any case in the ordinary course of business;

(c) Dispositions of property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are promptly applied to the purchase price of such replacement property;

(d) Dispositions of property to any Borrower or to a Restricted Subsidiary; provided that (1) if the transferor of such property is a U.S. Loan Party, (i) the transferee thereof must either be a U.S. Loan Party or (ii) to the extent such transaction constitutes an Investment, such Investment must be a permitted Investment in or Indebtedness of a Restricted Subsidiary that is not a U.S. Loan Party in accordance with Sections 7.02 and 7.03, respectively and (2) if the transferor in such a transaction is a P.R. Loan Party, then (i) the transferee must either be a P.R. Loan Party or (ii) to the extent constituting an Investment, such Investment must be a permitted Investment in or Indebtedness of a Restricted Subsidiary which is not a P.R. Loan Party in accordance with Sections 7.02 and 7.03, respectively;

(e) Dispositions permitted by Sections 7.04 and 7.06 and Liens permitted by Section 7.01;

(f) Dispositions of property (other than IP Collateral) pursuant to sale-leaseback transactions; provided that (i) (x) the applicable sale-leaseback transaction occurs within one hundred eighty (180) days after the acquisition or construction (as applicable) of such property and (y) the U.S. Borrower or the respective Restricted Subsidiary receives cash consideration for such Disposition in an amount at least equal to the lower of (A) the cost paid by such Person to acquire or construct such property and (B) the Fair Market Value

-119-

of such property or (ii) the Net Cash Proceeds from such Disposition are applied to repay Term Loans in accordance with Section 2.05(b)(ii)(A) and do not exceed in the aggregate $10,000,000;

(g) Dispositions of cash and Cash Equivalents;

(h) Dispositions or discounts without recourse of accounts receivable in connection with the compromise or collection thereof;

(i) leases, subleases, licenses or sublicenses (including the provision of software under an open source license), in each case in the ordinary course of business and which do not materially interfere with the business of Holdings, the U.S. Borrower and the Restricted Subsidiaries, taken as a whole;

(j) transfers of property subject to Casualty Events upon receipt of the Net Cash Proceeds of such Casualty Event;

(k) (A) Dispositions listed on Schedule 7.05(k) and (B) Dispositions of property not otherwise permitted under this Section 7.05; provided that (i) at the time of such Disposition (other than any such Disposition made pursuant to a legally binding commitment entered into at a time when no Default exists), no Default shall exist or would result from such Disposition, (ii) the aggregate Fair Market Value of all property Disposed of in reliance on sub-clause (B) of this clause (k) shall not exceed $50,000,000 and (iii) with respect to any Disposition pursuant to this clause (k) for a purchase price in excess of $2,500,000, the Borrowers or a Restricted Subsidiary shall receive not less than 75% of the consideration paid in connection with such Disposition in the form of cash or Cash Equivalents (in each case, free and clear of all Liens at the time received, other than nonconsensual Liens permitted by Section 7.01 and Liens permitted by clauses (i) and (ii) of Section 7.01(x)); provided, however, that for the purposes of this clause (iii), (I) any liabilities (as shown on such Borrower’s or such Restricted Subsidiary’s most recent balance sheet provided hereunder or in the footnotes thereto) of such Borrower or such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the payment in cash of the Obligations) that are assumed by the transferee with respect to the applicable Disposition and for which the Borrowers and all of the Restricted Subsidiaries shall have been validly released by all applicable creditors in writing and (II) any securities received by such Borrower or such Restricted Subsidiary from such transferee that are converted by such Borrower or such Restricted Subsidiary into cash (to the extent of the cash received) within 180 days following the closing of the applicable Disposition shall be deemed to be cash;

(l) so long as the proceeds thereof are applied to repay Term Loans in accordance with Section 2.05(b)(ii), Dispositions of Investments in joint ventures to the extent required by, or made pursuant to customary buy/sell arrangements between, the joint venture parties set forth in joint venture arrangements and similar binding arrangements;

(m) Dispositions required by the terms of the Separation Agreement (as in effect on the Closing Date), the Pfizer Lease, the Separation Lease Agreements, the

-120-

Manufacturing Agreement to the extent necessary for the U.S. Borrower to comply with the Melrose Park EU Plan or the FDA Modernization Plan (in each case as such term is defined in the Manufacturing Agreement) and the Employee Matters Agreement (as in effect on the Closing Date) which are necessary to complete the transactions contemplated thereby; and

(n) Dispositions of property not constituting Collateral provided that (i) no Default shall exist or would result from such Disposition and (ii) the aggregate Fair Market Value of all property disposed of in reliance of this clause (n) shall not exceed $5,000,000;

provided that any Disposition of any property pursuant to this Section 7.05 (except pursuant to Sections 7.05(e) and except for Dispositions from a U.S. Loan Party to another U.S. Loan Party or a P.R. Loan Party to another P.R. Loan Party) shall be for no less than the Fair Market Value of such property at the time of such Disposition. To the extent any Collateral is Disposed of as expressly permitted by this Section 7.05 to any Person other than Holdings, any Borrower or any Restricted Subsidiary, such Collateral shall be sold free and clear of the Liens created by the Loan Documents, and the Administrative Agent or the Collateral Agent, as applicable, shall be authorized to take any actions deemed appropriate in order to effect the foregoing.

SECTION 7.06. Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, except:

(a) each Restricted Subsidiary may make Restricted Payments to any Borrower and their Restricted Subsidiaries (and, in the case of a Restricted Payment by a non-wholly owned Restricted Subsidiary, to any Borrower and any other Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests);

(b) Holdings, each Borrower and each Restricted Subsidiary may declare and make Restricted Payments payable solely in the Equity Interests (other than Disqualified Equity Interests not otherwise permitted by Section 7.03) of such Person;

(c) Restricted Payments made on the Closing Date to consummate the Transaction;

(d) to the extent constituting Restricted Payments, Holdings, the Borrowers and the Restricted Subsidiaries may enter into and consummate transactions expressly permitted to be made by the Borrowers, Holdings or such Restricted Subsidiary by any provision of Sections 7.04 or Section 7.08(d), (h) and (j);

(e) repurchases of Equity Interests in Holdings, the Borrowers or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

(f) Holdings may pay (or make Restricted Payments to allow any direct or indirect parent thereof to pay) for the repurchase, retirement or other acquisition or retirement for value of Equity Interests of Holdings (or any such parent of Holdings) by

-121-

any future, present or former officer, employee, consultant or director of Holdings (or any direct or indirect parent of Holdings) or any of its Subsidiaries (or their respective estates, executors, administrators, heirs, legatees or distributees) pursuant to any employee or director equity plan, employee or director stock option plan or any other employee or director benefit plan or any agreement (including any stock subscription or shareholder agreement) with any future or former officer, employee, consultant or director of Holdings or any of its Subsidiaries; provided that the aggregate amount of Restricted Payments made pursuant to this clause (f) in any calendar year, when combined with the aggregate amount of all cash payments (whether principal or interest) made by the Loan Parties in respect of any promissory notes pursuant to Section 7.03(i) in such calendar year, shall not exceed $5,000,000, provided further that the unused portion of the preceding basket for any calendar year may be carried forward to succeeding calendar years, so long as the aggregate amount of all Restricted Payments made pursuant to this Section 7.06(f) in any calendar year (after giving effect to such carry-forward), when aggregated with the aggregate amount of cash payments made in respect of notes pursuant to Section 7.03(i) in such calendar year (after giving effect to such carry-forward), shall not exceed $7,500,000;

(g) the Borrowers and the Restricted Subsidiaries may make Restricted Payments to Holdings:

(i) the proceeds of which will be used to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) the tax liability to each relevant jurisdiction in respect of consolidated, combined, unitary or affiliated returns for the relevant jurisdiction of Holdings (or such parent) attributable to Holdings, the U.S. Borrower or its Restricted Subsidiaries determined as if the U.S. Borrower and its Restricted Subsidiaries filed separately;

(ii) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting and similar expenses provided by third parties), which are reasonable and customary and incurred in the ordinary course of business, in an aggregate amount not to exceed $2,000,000 in any fiscal year plus any reasonable and customary indemnification claims made by directors or officers of Holdings (or any parent thereof) attributable to the ownership or operations of the Borrowers and the Restricted Subsidiaries;

(iii) the proceeds of which shall be used by Holdings to pay franchise taxes and other fees, taxes and expenses required to maintain its (or any of its direct or indirect parent’s) corporate existence;

(iv) the proceeds of which shall be used by Holdings to make Restricted Payments otherwise permitted by this Section 7.06; and

-122-

(v) to finance any Investment permitted to be made pursuant to Section 7.02(i); provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the U.S. Borrower or one or more of its Subsidiaries that is a U.S. Loan Party or (2) the merger (to the extent permitted in Section 7.04) of the Person formed in order to consummate such Permitted Acquisition (or the Person acquired pursuant to such Permitted Acquisition) into the U.S. Borrower or one of its Subsidiaries that is a U.S. Loan Party, in each case, in accordance with the requirements of Section 6.11;

(h) so long as no Default then exists or would result therefrom, other Restricted Payments in an aggregate amount not to exceed $10,000,000 in any fiscal year; and

(i) in addition to the foregoing Restricted Payments and so long as (i) no Default shall have occurred and be continuing or would result therefrom, (ii) the Credit Agreement Parties are in Pro Forma Compliance with the Financial Covenant and (iii) the Available Amount Leverage Condition has been satisfied, Holdings may make additional Restricted Payments, in an aggregate amount not to exceed the Available Amount at such time.

SECTION 7.07. Change in Nature of Business. Engage in any material line of business substantially different from those lines of business conducted by the Borrowers and the Restricted Subsidiaries, taken as a whole, on the date hereof or any business reasonably related or ancillary thereto.

SECTION 7.08. Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate of the U.S. Borrower, whether or not in the ordinary course of business, other than (a) transactions (i) among the Loan Parties in the ordinary course of business, (ii) among the U.S. Loan Parties or (iii) among the P.R. Loan Parties, (b) on terms substantially as favorable to Holdings, the U.S. Borrower, the P.R. Borrower or such Restricted Subsidiary as would be obtainable by Holdings, the U.S. Borrower, the P.R. Borrower or such Restricted Subsidiary at the time in a comparable arm’s-length transaction with a Person other than an Affiliate, (c) the payment of fees and expenses related to the Transaction, (d) the issuance of Equity Interests to the management of Holdings, the U.S. Borrower or any of its Subsidiaries in connection with the Transaction, (e) loans and other transactions among Holdings, the Borrowers and the Restricted Subsidiaries to the extent expressly permitted under this Article 7, (f) employment and severance arrangements between Holdings, the Borrowers and the Restricted Subsidiaries and their respective directors, officers, employees and consultants in the ordinary course of business, (g) payments by Holdings (and any direct or indirect parent thereof), the Borrowers and the Restricted Subsidiaries pursuant to the tax sharing agreements among Holdings (and any such parent thereof), the Borrowers and the Restricted Subsidiaries on customary terms to the extent attributable to the ownership or operations of the Borrowers and the Restricted Subsidiaries, (h) the payment of customary fees and reasonable out of pocket costs to, and indemnities provided on behalf of, directors, officers and employees of Holdings, the Borrowers and the Restricted Subsidiaries in the ordinary course of business to the extent attributable to the ownership or operation of Holdings, the Borrowers and the Restricted

-123-

Subsidiaries, (i) transactions pursuant to permitted agreements, instruments or arrangements in existence on the Closing Date and set forth on Schedule 7.08 or any amendment thereto to the extent such an amendment is not adverse to the Lenders in any material respect, (j) the Transactions and (k) transactions permitted under Section 7.06.

SECTION 7.09. Burdensome Agreements. Enter into or permit to exist any Contractual Obligation (other than this Agreement or any other Loan Document) that limits the ability of (a) any Restricted Subsidiary of the U.S. Borrower to make Restricted Payments to the U.S. Borrower or any other Restricted Subsidiary or (b) the U.S. Borrower or any other Loan Party to create, incur, assume or suffer to exist Liens on property of such Person for the benefit of the Secured Parties with respect to the Facilities and the Obligations or under the Loan Documents; provided that the foregoing clauses (a) and (b) shall not apply to Contractual Obligations which (i) (x) exist on the date hereof and (to the extent not otherwise permitted by this Section 7.09) are listed on Schedule 7.09 hereto and (y) to the extent Contractual Obligations permitted by clause (x) are set forth in an agreement evidencing Indebtedness, are set forth in any agreement evidencing any renewal, extension or refinancing of such Indebtedness permitted under Section 7.03 so long as such renewal, extension or refinancing does not expand the scope of such Contractual Obligation, (ii) are binding on a Restricted Subsidiary at the time such Restricted Subsidiary first becomes a Restricted Subsidiary of the U.S. Borrower, so long as such Contractual Obligations were not entered into in contemplation of such Person becoming a Restricted Subsidiary of the U.S. Borrower; provided further, that this clause (ii) shall not apply to Contractual Obligations that are binding on a Person that becomes a Restricted Subsidiary pursuant to Section 6.14, (iii) represent Indebtedness of a Restricted Subsidiary of the U.S. Borrower which is not a Loan Party which is permitted by Section 7.03, (iv) arise in connection with any Disposition permitted by Section 7.05, (v) are customary provisions in joint venture agreements and other similar agreements applicable to joint ventures permitted under Section 7.02 and applicable solely to such joint venture entered into in the ordinary course of business, (vi) are negative pledges and restrictions on Liens in favor of any holder of Indebtedness permitted under Section 7.03 but solely to the extent any negative pledge relates to the property financed by or the subject of such Indebtedness (and excluding in any event any Indebtedness constituting Third Party Financing), (vii) are customary restrictions on leases, subleases, licenses or asset sale agreements otherwise permitted hereby so long as such restrictions relate only to the assets subject thereto, (viii) comprise restrictions imposed by any agreement relating to secured Indebtedness permitted pursuant to Section 7.03(e), to the extent that such restrictions apply only to the property or assets securing such Indebtedness, (ix) are customary provisions restricting subletting or assignment of any lease governing a leasehold interest of the U.S. Borrower or any Restricted Subsidiary, (x) are customary provisions restricting assignment of any agreement entered into in the ordinary course of business, and (xi) are restrictions on cash or other deposits imposed by customers under contracts entered into in the ordinary course of business and (xii) are imposed by Law or by any Governmental Authority.

SECTION 7.10. Use of Proceeds. Use the proceeds of any Credit Extension, whether directly or indirectly, in a manner inconsistent with the uses set forth in the preliminary statements to this Agreement.

-124-

SECTION 7.11. Senior Secured Leverage Ratio. Permit the Senior Secured Leverage Ratio as of the last day of any Test Period to be greater than the ratio set forth below opposite the last day of such Test Period:

Test Period	Senior Secured Leverage Ratio
December 31, 2007	5.00:1.00
March 31, 2008	5.00:1.00
June 30, 2008	5.00:1.00
September 30, 2008	5.00:1.00
December 31, 2008	5.00:1.00
March 31, 2009	4.50:1.00
June 30, 2009	4.50:1.00
September 30, 2009	4.50:1.00
December 31, 2009	4.50:1.00
March 31, 2010	4.00:1.00
June 30, 2010	4.00:1.00
September 30, 2010	4.00:1.00
December 31, 2010	4.00:1.00
March 31, 2011	4.00:1.00
June 30, 2011	4.00:1.00
September 30, 2011	4.00:1.00
December 31, 2011	4.00:1.00
March 31, 2012 and thereafter	3.50:1.00

SECTION 7.12. Accounting Changes. Make any change in fiscal quarter or fiscal year; provided, however, that Holdings may, upon written notice to the Administrative Agent, change its fiscal quarter or fiscal year to any other fiscal quarter or fiscal year reasonably acceptable to the Administrative Agent, in which case, the Credit Agreement Parties and the Administrative Agent will, and are hereby authorized by the Lenders to, make any adjustments to this Agreement that are necessary to reflect such change in fiscal quarter or fiscal year.

SECTION 7.13. Prepayments, Etc. of Indebtedness. (a) Prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner (it being understood that payments of regularly scheduled interest shall be permitted) any Indebtedness incurred under Section 7.03(g) (and any Permitted Refinancing thereof) or any other Indebtedness that is required to be subordinated to the Obligations pursuant to the terms of the Loan Documents (all such Indebtedness described above in this clause (a), “Third Party Financing”) or make any payment in violation of any subordination terms of any Third Party Financing Documentation, except, so long as (in the case of clauses (i), (ii) and (iv) below) no Default shall have occurred and be continuing or would result therefrom, (i) the refinancing thereof with the Net Cash Proceeds of any Indebtedness (to the extent such Indebtedness constitutes a Permitted Refinancing), to the extent not required to prepay any Loans or Facility pursuant to Section 2.05(b), (ii) the conversion of any Third Party Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings, (iii) the prepayment of Indebtedness of the U.S. Borrower or any Restricted Subsidiary to the U.S. Borrower or any Restricted Subsidiary to

-125-

the extent permitted by the Intercompany Subordination Agreement and (iv) prepayments, redemptions, purchases, defeasances and other payments in respect of any Third Party Financing prior to its scheduled maturity; provided that (x) the Credit Agreement Parties are in Pro Forma Compliance with the Financial Covenant, (y) the Available Amount Leverage Condition has been satisfied and (z) the aggregate amount of such prepayments, redemptions, purchases, defeasances and other payments do not exceed the sum of (1) $5,000,000 and (2) Available Amount at such time.

(b) Amend, modify or change (x) the subordination provision (if any) of any Third Party Financing Documentation (or the component definitions contained therein) or (y) any term or condition any Third Party Financing Documentation in any manner materially adverse to the interests of the Lenders, in any such case without the consent of the Administrative Agent.

(c) Designate any Indebtedness (or related interest obligations) as “Designated Senior Debt” or any similar term (as defined in any Third Party Financing Documentation), in each case, except for the Obligations described in clause (x) of the definition thereof.

SECTION 7.14. Equity Interests of the U.S. Borrower and Restricted Subsidiaries. Permit any Subsidiary that is a Restricted Subsidiary to be a non-wholly owned Subsidiary, except (i) as a result of or in connection with a dissolution, merger, consolidation or Disposition of a Restricted Subsidiary permitted by Section 7.04 or 7.05 or an Investment in any Person permitted under Section 7.02 or (ii) so long as such Restricted Subsidiary continues to be (i) a U.S. Guarantor, in the case of a Domestic Subsidiary, or (ii) a P.R. Subsidiary Guarantor, in the case of a Restricted Subsidiary of the P.R. Borrower.

SECTION 7.15. Holding Company. In the case of Holdings, conduct, transact or otherwise engage in any business or operations other than (i) its ownership of the Equity Interests of the U.S. Borrower, (ii) the maintenance of its legal existence, including the ability to incur fees, costs and expenses relating to such maintenance, (iii) participating in tax, accounting and other administrative matters as a member of the consolidated group of Holdings and the U.S. Borrower, (iv) the performance of the Loan Documents and the Separation Documents, (v) any public offering of its common stock or any other issuance of its Equity Interests not prohibited by Article 7, including incurring the costs, fees and expenses related thereto, (vi) any transaction that Holdings is permitted to enter into or consummate under this Article 7, including making any Restricted Payment permitted by Section 7.06 or holding any cash received in connection with Restricted Payments made by the U.S. Borrower in accordance with Section 7.06 pending application thereof by Holdings in the manner contemplated by Section 7.06, (vii) incurring fees, costs and expenses relating to overhead and general operations including professional fees for legal, tax and accounting issues, (viii) providing indemnification to officers and directors and as otherwise permitted in Article 7 and (ix) activities incidental to the businesses or activities described in clauses (i) to (viii) of this Section 7.15.

-126-

ARTICLE VIII

Events Of Default and Remedies

SECTION 8.01. Events of Default. Any of the following shall constitute an Event of Default:

(a) Non-Payment. Any Borrower or any other Loan Party fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan, or (ii) within five (5) days after the same becomes due, any interest on any Loan or any other amount payable hereunder or with respect to any other Loan Document; or

(b) Specific Covenants. Any Credit Agreement Party fails to perform or observe any term, covenant or agreement contained in any of Section 6.05(x) (solely with respect to Holdings and each Borrower) or Article 7; or

(c) Other Defaults. Any Loan Party fails to perform or observe any other covenant or agreement (not specified in Section 8.01(a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues unremedied for thirty (30) days after written notice thereof given by the Administrative Agent to the U.S. Borrower; or

(d) Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of any Borrower or any other Loan Party herein, in any other Loan Document, or in any document required to be delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made; or

(e) Cross-Default. Any Loan Party or any Restricted Subsidiary (A) fails to make any payment beyond the applicable grace period with respect thereto, if any (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness (other than Indebtedness hereunder), together with any other Indebtedness (other than Indebtedness hereunder) in respect of which such a payment default exists, having an aggregate principal amount for all such Indebtedness of not less than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relating to Indebtedness having an aggregate principal amount for all such Indebtedness of not less than the Threshold Amount, or any other event occurs (other than, with respect to Indebtedness consisting of Swap Contracts, termination events or equivalent events pursuant to the terms of such Swap Contracts), the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity; provided that this clause (e)(B) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, if such sale or transfer is permitted hereunder and under the documents providing for such Indebtedness; or

-127-

(f) Insolvency Proceedings, Etc. Any Loan Party or any of the Restricted Subsidiaries institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator, administrator, administrative receiver or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator, administrator, administrative receiver or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for sixty (60) calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for sixty (60) calendar days, or an order for relief is entered in any such proceeding; or

(g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any Restricted Subsidiary admits in writing its inability or fails generally to pay its debts in excess of the Threshold Amount as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of the Loan Parties, taken as a whole, and is not released, vacated or fully bonded within sixty (60) days after its issue or levy; or

(h) Judgments. There is entered against any Loan Party or any Restricted Subsidiary a final judgment or order for the payment of money in an aggregate amount exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer has been notified of such judgment or order and has not denied coverage) and such judgment or order shall not have been satisfied, vacated, discharged or stayed or bonded pending an appeal for a period of sixty (60) consecutive days; or

(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of any Loan Party in an aggregate amount which could reasonably be expected to result in a Material Adverse Effect, or (ii) any Loan Party or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount which could reasonably be expected to result in a Material Adverse Effect; or

(j) Invalidity of Loan Documents. Any material provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder (including as a result of a transaction permitted under Section 7.04 or 7.05) or as a result of acts or omissions by the Administrative Agent or any Lender or the satisfaction in full of all the Obligations and termination of the Aggregate Commitments, ceases to be in full force and effect; or any Loan Party contests in writing the validity or enforceability of any provision of any Loan Document; or any Loan

-128-

Party denies in writing that it has any further liability or obligation under any Loan Document (other than as a result of repayment in full of the Obligations and termination of the Aggregate Commitments), or purports in writing to revoke or rescind any Loan Document; or

(k) Change of Control. There occurs any Change of Control; or

(l) Collateral Documents. (i) Any Collateral Document after delivery thereof pursuant to Section 4.01, 6.11 or 6.13 shall for any reason (other than pursuant to the terms thereof including as a result of a transaction permitted under Section 7.04 or 7.05) cease to create a valid and perfected lien, with the priority required by the Collateral Documents (or other security purported to be created on the applicable Collateral), on and security interest in any material portion of the Collateral purported to be covered thereby, subject to Liens permitted under Section 7.01, except to the extent that any such loss of perfection or priority results from the failure of the Administrative Agent or the Collateral Agent to maintain possession of certificates actually delivered to it representing securities pledged under the Collateral Documents or to file Uniform Commercial Code continuation statements and except as to Collateral consisting of real property to the extent that such losses are covered by a lender’s title insurance policy and such insurer has not denied coverage, or (ii) any of the Equity Interests of the U.S. Borrower ceasing to be pledged pursuant to the Security Agreement free of Liens other than Liens created by the Security Agreement or any nonconsensual Liens arising solely by operation of Law.

SECTION 8.02. Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the Administrative Agent may and, at the request of the Required Lenders, shall take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans and any obligation of the L/C Issuers to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by each Borrower;

(c) require that the U.S. Borrower Cash Collateralize the L/C Obligations (in an amount equal to the then Outstanding Amount thereof); and

(d) exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents or applicable Law;

provided that upon the occurrence of any Event of Default under clause (f) or (g) of Section 8.01, the obligation of each Lender to make Loans and any obligation of the L/C Issuers to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the U.S. Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.

-129-

SECTION 8.03. Exclusion of Immaterial Subsidiaries. Solely for the purpose of determining whether a Default has occurred under clause (f) or (g) of Section 8.01, any reference in any such clause to any Restricted Subsidiary or Loan Party shall be deemed not to include any Restricted Subsidiary affected by any event or circumstances referred to in any such clause that did not, as of the last day of the most recent completed fiscal quarter of Holdings, have assets with a value in excess of 5% of the Consolidated Total Assets and did not, as of the four quarter period ending on the last day of such fiscal quarter, have revenues exceeding 5% of the total revenues of Holdings and the Restricted Subsidiaries (it being agreed that all Restricted Subsidiaries affected by any event or circumstance referred to in any such clause shall be considered together, as a single consolidated Restricted Subsidiary, for purposes of determining whether the condition specified above is satisfied).

SECTION 8.04. U.S. Borrower’s Right to Cure. (a) Notwithstanding anything to the contrary contained in Section 8.01, in the event of any Event of Default under Section 8.01(b) arising from the Credit Agreement Parties failure to comply with the Financial Covenant and until the expiration of the twentieth (20th) day after the date on which financial statements are required to be delivered with respect to the applicable fiscal quarter hereunder, Holdings may effect a Permitted Equity Issuance and apply the amount of the Net Cash Proceeds thereof to increase Consolidated EBITDA with respect to such applicable quarter; provided that such Net Cash Proceeds (i) are contributed as common equity to the U.S. Borrower no later than twenty (20) days after the date on which financial statements are required to be delivered with respect to such fiscal quarter hereunder, (ii) are Not Otherwise Applied and (iii) do not exceed the aggregate amount necessary to cure such Event of Default for any applicable period. The parties hereby acknowledge that this Section 8.04(a) may not be relied on for purposes of calculating any financial ratios other than as applicable to Section 7.11 and shall not result in any adjustment to any amounts including, without limitations, any “baskets” contained in Article VII, other than the amount of the Consolidated EBITDA referred to in the immediately preceding sentence.

(b) Notwithstanding the provisions of Section 8.04(a), in each period of four fiscal quarters, there shall be at least one (1) fiscal quarter in which no cure set forth in Section 8.04(a) is made.

ARTICLE IX

Administrative Agent, Other Agents and Arrangers

SECTION 9.01. Appointment and Authorization of Agents and Arrangers. (a) Each Lender hereby irrevocably appoints, designates and authorizes the Administrative Agent (and solely with respect to the right of consent expressly set forth in Section 2.14, the Arrangers) required to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated

-130-

to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere herein or in any other Loan Document, the Administrative Agent and the Arrangers shall have no duties or responsibilities, except those expressly set forth herein, nor shall the Administrative Agent or the Arrangers have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent or the Arrangers. Without limiting the generality of the foregoing sentence, the use of the term “agent” or “arranger” herein and in the other Loan Documents with reference to any Agent or Arranger is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

(b) Each L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and each such L/C Issuer shall have all of the benefits and immunities (i) provided to the Agents in this Article 9 with respect to any acts taken or omissions suffered by such L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and the applications and agreements for letters of credit pertaining to such Letters of Credit as fully as if the term “Agent” as used in this Article 9 and in the definition of “Agent-Related Person” included such L/C Issuer with respect to such acts or omissions, and (ii) as additionally provided herein with respect to such L/C Issuer.

(c) The Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders (in its capacities as a Lender, Swing Line Lender (if applicable), L/C Issuer (if applicable) and a potential Hedge Bank) hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of (and to hold any security interest created by the Collateral Documents for and on behalf of or on trust for) such Lender for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Secured Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as “collateral agent” (and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.02 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this Article 9 (including, Section 9.07, as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.

SECTION 9.02. Delegation of Duties. The Administrative Agent may execute any of its duties under this Agreement or any other Loan Document (including for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents or of exercising any rights and remedies thereunder) by or through agents, employees or attorneys-in-fact, such sub-agents as shall be deemed necessary by the Administrative Agent and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or sub-agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct (as determined in the final judgment of a court of competent jurisdiction).

-131-

SECTION 9.03. Liability of Agents. No Agent-Related Person shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct, as determined by the final judgment of a court of competent jurisdiction, in connection with its duties expressly set forth herein), or (b) be responsible in any manner to any Lender or participant for any recital, statement, representation or warranty made by any Loan Party or any officer thereof, contained herein or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or the perfection or priority of any Lien or security interest created or purported to be created under the Collateral Documents, or for any failure of any Loan Party or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lender or participant to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party or any Affiliate thereof.

SECTION 9.04. Reliance by Agents. (a) Each Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic mail message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to any Loan Party), independent accountants and other experts selected by such Agent. Each Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Each Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders (or such greater number of Lenders as may be expressly required hereby in any instance) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders.

(b) For purposes of determining compliance with the conditions specified in Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

-132-

SECTION 9.05. Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Lenders, unless the Administrative Agent shall have received written notice from a Lender or any Borrower referring to this Agreement, describing such Default and stating that such notice is a “notice of default.” The Administrative Agent will notify the Lenders of its receipt of any such notice. The Administrative Agent shall take such action with respect to any Event of Default as may be directed by the Required Lenders in accordance with Article 8; provided that unless and until the Administrative Agent has received any such direction, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Event of Default as it shall deem advisable or in the best interest of the Lenders.

SECTION 9.06. Credit Decision; Disclosure of Information by Agents. Each Lender acknowledges that no Agent-Related Person has made any representation or warranty to it, and that no act by any Agent hereafter taken, including any consent to and acceptance of any assignment or review of the affairs of any Loan Party or any Affiliate thereof, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender as to any matter, including whether Agent-Related Persons have disclosed material information in their possession. Each Lender represents to each Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Loan Parties and their respective Subsidiaries, and all applicable bank or other regulatory Laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Borrowers and the other Loan Parties hereunder. Each Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrowers and the other Loan Parties. Except for notices, reports and other documents expressly required to be furnished to the Lenders by any Agent herein, such Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any of the Loan Parties or any of their respective Affiliates which may come into the possession of any Agent-Related Person.

SECTION 9.07. Indemnification of Agents. Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand each Agent-Related Person (to the extent not reimbursed by or on behalf of any Loan Party and without limiting the obligation of any Loan Party to do so), pro rata, and hold harmless each Agent-Related Person from and against any and all Indemnified Liabilities incurred by it; provided that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities resulting from such Agent-Related Person’s own gross negligence or willful misconduct, as determined by the final judgment of a court of competent jurisdiction; provided that no action taken in accordance with the directions of the Required Lenders (or such other number or percentage of the Lenders as shall be required by the Loan Documents) shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section 9.07. In

-133-

the case of any investigation, litigation or proceeding giving rise to any Indemnified Liabilities, this Section 9.07 applies whether any such investigation, litigation or proceeding is brought by any Lender or any other Person. Without limitation of the foregoing, each Lender shall reimburse the Administrative Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Borrowers. The undertaking in this Section 9.07 shall survive termination of the Aggregate Commitments, the payment of all other Obligations and the resignation of the Administrative Agent.

SECTION 9.08. Agents in their Individual Capacities. DBNY and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire Equity Interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with each of the Loan Parties and their respective Affiliates as though DBNY were not the Administrative Agent or an L/C Issuer hereunder and without notice to or consent of the Lenders. The Lenders acknowledge that, pursuant to such activities, DBNY or its Affiliates may receive information regarding any Loan Party or its Affiliates (including information that may be subject to confidentiality obligations in favor of such Loan Party or such Affiliate) and acknowledge that the Administrative Agent shall be under no obligation to provide such information to them. With respect to its Loans, DBNY shall have the same rights and powers under this Agreement as any other Lender and may exercise such rights and powers as though it were not the Administrative Agent or an L/C Issuer, and the terms “Lender” and “Lenders” include DBNY in its individual capacity.

SECTION 9.09. Successor Agents. The Administrative Agent may resign as the Administrative Agent upon thirty (30) days’ notice to the Lenders and the U.S. Borrower. If the Administrative Agent resigns under this Agreement, the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall be consented to by the U.S. Borrower at all times other than during the existence of an Event of Default under Section 8.01(f) or (g) (which consent of the U.S. Borrower shall not be unreasonably withheld or delayed). If no successor agent is appointed prior to the effective date of the resignation of the Administrative Agent, the Administrative Agent may appoint, after consulting with the Lenders and the U.S. Borrower, a successor agent from among the Lenders. Upon the acceptance of its appointment as successor agent hereunder, the Person acting as such successor agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent and the term “Administrative Agent,” shall mean such successor administrative agent and/or supplemental administrative agent, as the case may be, and the retiring Administrative Agent’s appointment, powers and duties as the Administrative Agent shall be terminated. After the retiring Administrative Agent’s resignation hereunder as the Administrative Agent, the provisions of this Article 9 and Sections 12.04 and 12.05 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent under this Agreement. If no successor agent has accepted appointment as the Administrative Agent by the date which is thirty (30) days following the retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective and the Lenders shall perform

-134-

all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. Upon the acceptance of any appointment as the Administrative Agent hereunder by a successor and upon the execution and filing or recording of such financing statements, or amendments thereto, and such amendments or supplements to the Mortgages, and such other instruments or notices, as may be necessary or desirable, or as the Required Lenders may request, in order to (a) continue the perfection of the Liens granted or purported to be granted by the Collateral Documents or (b) otherwise ensure that the Collateral and Guarantee Requirement is satisfied, the Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, discretion, privileges, and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under the Loan Documents. After the retiring Administrative Agent’s resignation hereunder as the Administrative Agent, the provisions of this Article 9 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent.

SECTION 9.10. Administrative Agent May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the U.S. Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 2.03(h) and (i), 2.09 and 12.04) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Agents and their respective agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 12.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

-135-

SECTION 9.11. Collateral and Guaranty Matters. The Lenders irrevocably agree that:

(a) any Lien on any property granted to or held by the Administrative Agent or the Collateral Agent under any Loan Document shall be automatically released (i) upon termination of the Aggregate Commitments and payment in full of all Obligations (other than (x) obligations under Secured Hedge Agreements not yet due and payable, (y) Cash Management Obligations not yet due and payable and (z) contingent indemnification obligations not yet accrued and payable) and the expiration or termination of all Letters of Credit (unless such Letter of Credit has been Cash Collateralized pursuant to Section 2.03(g), (ii) at the time the property subject to such Lien is transferred or to be transferred as part of or in connection with any transfer permitted hereunder or under any other Loan Document to any Person other than Holdings, the U.S. Borrower, the P.R. Borrower or any other Guarantor, (iii) subject to Section 12.01, if the release of such Lien is approved, authorized or ratified in writing by the Required Lenders, (iv) upon the Disposition of any such property in a transaction permitted hereunder, or (v) if the property subject to such Lien is owned by a Guarantor, upon release of such Guarantor from its obligations under its Guaranty pursuant to clause (c) below;

(b) to release or subordinate any Lien on any property granted to or held by the Administrative Agent or the Collateral Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 7.01(i), or (p); and

(c) any Guarantor shall be automatically released from its obligations under the Guaranty if such Person ceases to be a Restricted Subsidiary as a result of a transaction or designation permitted hereunder (including as a result of a Guarantor being redesignated as an Unrestricted Subsidiary); provided that no such release shall occur if such Guarantor continues to be a guarantor in respect of any Third Party Financing.

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 9.11. In each case as specified in this Section 9.11, the Administrative Agent will (and each Lender irrevocably authorizes the Administrative Agent to), at the U.S. Borrower’s expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release or subordination of such item of Collateral from the assignment and security interest granted under the Collateral Documents, or to evidence the release of such Guarantor from its obligations under the Guaranty, in each case in accordance with the terms of the Loan Documents and this Section 9.11.

SECTION 9.12. Other Agents; Arrangers and Managers. None of the Lenders or other Persons identified on the facing page or signature pages of this Agreement as a “joint bookrunner” or “arranger” shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the

-136-

foregoing, none of the Lenders or other Persons so identified shall have or be deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders or other Persons so identified in deciding to enter into this Agreement or in taking or not taking action hereunder.

SECTION 9.13. Appointment of Supplemental Administrative Agents. (a) It is the purpose of this Agreement and the other Loan Documents that there shall be no violation of any Law of any jurisdiction denying or restricting the right of banking corporations or associations to transact business as agent or trustee in such jurisdiction. It is recognized that in case of litigation under this Agreement or any of the other Loan Documents, and in particular in case of the enforcement of any of the Loan Documents, or in case the Administrative Agent deems that by reason of any present or future Law of any jurisdiction it may not exercise any of the rights, powers or remedies granted herein or in any of the other Loan Documents or take any other action which may be desirable or necessary in connection therewith, the Administrative Agent is hereby authorized to appoint an additional individual or institution selected by the Administrative Agent in its sole discretion as a separate trustee, co-trustee, administrative agent, collateral agent, administrative sub-agent or administrative co-agent (any such additional individual or institution being referred to herein individually as a “Supplemental Administrative Agent” and collectively as “Supplemental Administrative Agents”).

(b) In the event that the Administrative Agent appoints a Supplemental Administrative Agent with respect to any Collateral, (i) each and every right, power, privilege or duty expressed or intended by this Agreement or any of the other Loan Documents to be exercised by or vested in or conveyed to the Administrative Agent with respect to such Collateral shall be exercisable by and vest in such Supplemental Administrative Agent to the extent, and only to the extent, necessary to enable such Supplemental Administrative Agent to exercise such rights, powers and privileges with respect to such Collateral and to perform such duties with respect to such Collateral, and every covenant and obligation contained in the Loan Documents and necessary to the exercise or performance thereof by such Supplemental Administrative Agent shall run to and be enforceable by either the Administrative Agent or such Supplemental Administrative Agent, and (ii) the provisions of this Article 9 and of Sections 12.04 and 12.05 that refer to the Administrative Agent shall inure to the benefit of such Supplemental Administrative Agent and all references therein to the Administrative Agent shall be deemed to be references to the Administrative Agent and/or such Supplemental Administrative Agent, as the context may require.

(c) Should any instrument in writing from the U.S. Borrower, the P.R. Borrower, Holdings or any other Loan Party be required by any Supplemental Administrative Agent so appointed by the Administrative Agent for more fully and certainly vesting in and confirming to him or it such rights, powers, privileges and duties, the U.S. Borrower, the P.R. Borrower or Holdings, as applicable, shall, or shall cause such Loan Party to, execute, acknowledge and deliver any and all such instruments promptly upon request by the Administrative Agent. In case any Supplemental Administrative Agent, or a successor thereto, shall die, become incapable of acting, resign or be removed, all the rights, powers, privileges and duties of such Supplemental Administrative Agent, to the extent permitted by Law, shall vest in and be exercised by the Administrative Agent until the appointment of a new Supplemental Administrative Agent.

-137-

ARTICLE X

The U.S. Borrower Guaranty

SECTION 10.01. The U.S. Borrower Guaranty. In order to induce the Lenders to enter into this Agreement and to extend credit hereunder and to induce the Lenders or any of their respective Affiliates to enter into Secured Hedge Agreements or Cash Management Services, and in recognition of the direct benefits to be received by the U.S. Borrower from the proceeds of the Loans, the issuance of the Letters of Credit and the entering into of Secured Hedge Agreements or Cash Management Services, the U.S. Borrower hereby unconditionally and irrevocably guarantees (the “U.S. Borrower Guaranty”), as primary obligor and not merely as surety the full and prompt payment when due, whether upon maturity, acceleration or otherwise, of any and all of the U.S. Borrower Guaranteed Obligations to the P.R. Guaranteed Creditors. If any or all of the U.S. Borrower Guaranteed Obligations to the P.R. Guaranteed Creditors becomes due and payable hereunder, the U.S. Borrower unconditionally promises to pay such indebtedness to the P.R. Guaranteed Creditors, on demand, together with any and all expenses which may be incurred by the P.R. Guaranteed Creditors in collecting any of the U.S. Borrower Guaranteed Obligations. This U.S. Borrower Guaranty is a guaranty of payment and not of collection. This U.S. Borrower Guaranty is a continuing one and all liabilities to which it applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon. If any claim is ever made upon any Guaranteed Creditor for repayment or recovery of any amount or amounts received in payment or on account of any of the U.S. Borrower Guaranteed Obligations and any of the aforesaid payees repays all or part of said amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over such payee or any of its property or (ii) any settlement or compromise of any such claim effected by such payee with any such claimant (including the P.R. Borrower), then and in such event the U.S. Borrower agrees that any such judgment, decree, order, settlement or compromise shall be binding upon the U.S. Borrower, notwithstanding any revocation of this U.S. Borrower Guaranty or any other instrument evidencing any liability of the P.R. Borrower or any U.S. Borrower Guaranteed Party, and the U.S. Borrower shall be and remain liable to the aforesaid payees hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by any such payee.

SECTION 10.02. Bankruptcy. Additionally, the U.S. Borrower unconditionally and irrevocably, guarantees the payment of any and all of the U.S. Borrower Guaranteed Obligations to the P.R. Guaranteed Creditors whether or not due or payable by the P.R. Borrower upon the occurrence of any of the events specified in Section 8.01(f), and unconditionally promises to pay such indebtedness to the P.R. Guaranteed Creditors, or order, on demand.

SECTION 10.03. Nature of Liability. The liability of the U.S. Borrower hereunder is exclusive and independent of any security for or other guaranty of the U.S. Borrower Guaranteed Obligations whether executed by the U.S. Borrower, any other guarantor or by any other party, and the liability of the U.S. Borrower hereunder is not affected or impaired by (a) any direction as to application of payment by the P.R. Borrower, any other U.S. Borrower Guaranteed Party or any other party, or (b) any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the U.S. Borrower Guaranteed Obligations, or (c) any payment on or in respect of any such other guaranty or undertaking, or (d)

-138-

any dissolution, termination or increase, decrease or change in personnel by the P.R. Borrower or (e) any payment made to the P.R. Guaranteed Creditors on the U.S. Borrower Guaranteed Obligations which any such Guaranteed Creditor repays to the P.R. Borrower pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and the U.S. Borrower waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding, or (f) any action or inaction of the type described in Section 10.05, or (g) the lack of validity or enforceability of any Loan Document or any other instrument relating thereto.

SECTION 10.04. Independent Obligation. No invalidity, irregularity or unenforceability of all or any part of the U.S. Borrower Guaranteed Obligations or of any security therefor shall affect, impair or be a defense to this U.S. Borrower Guaranty, and this U.S. Borrower Guaranty shall be primary, absolute and unconditional notwithstanding the occurrence of any event or the existence of any other circumstances which might constitute a legal or equitable discharge of a surety or guarantor except payment in full in cash of the U.S. Borrower Guaranteed Obligations. The obligations of the U.S. Borrower hereunder are independent of the obligations of the P.R. Borrower, any other U.S. Borrower Guaranteed Party, any other guarantor or any other party, and a separate action or actions may be brought and prosecuted against the U.S. Borrower whether or not action is brought against the P.R. Borrower, any other U.S. Borrower Guaranteed Party, any other guarantor or any other party and whether or not the P.R. Borrower, any other U.S. Borrower Guaranteed Party, any other guarantor or any other party be joined in any such action or actions. The U.S. Borrower waives, to the full extent permitted by law, the benefit of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by the P.R. Borrower or other circumstance that operates to toll any statute of limitations as to the P.R. Borrower or such other U.S. Borrower Guaranteed Party shall operate to toll the statute of limitations as to the U.S. Borrower.

SECTION 10.05. Authorization. The U.S. Borrower authorizes the P.R. Guaranteed Creditors without notice or demand (except as shall be required by applicable statute and cannot be waived), and without affecting or impairing its liability hereunder, from time to time to:

(a) change the manner, place or terms of payment of, and/or change or extend the time of payment of, renew, increase, accelerate or alter, any of the U.S. Borrower Guaranteed Obligations (including any increase or decrease in the rate of interest thereon), any security therefor, or any liability incurred directly or indirectly in respect thereof, and this U.S. Borrower Guaranty made shall apply to the U.S. Borrower Guaranteed Obligations as so changed, extended, renewed, increased or altered;

(b) take and hold security for the payment of the U.S. Borrower Guaranteed Obligations and sell, exchange, release, impair, surrender, realize upon or otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the U.S. Borrower Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset there against;

-139-

(c) exercise or refrain from exercising any rights against the P.R. Borrower, any other U.S. Borrower Guaranteed Party or others or otherwise act or refrain from acting;

(d) release or substitute any one or more endorsers, guarantors, the P.R. Borrower, any other U.S. Borrower Guaranteed Party or other obligors;

(e) settle or compromise any of the U.S. Borrower Guaranteed Obligations, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of the P.R. Borrower to their respective creditors other than the P.R. Guaranteed Creditors;

(f) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of the P.R. Borrower to the P.R. Guaranteed Creditors regardless of what liability or liabilities of the P.R. Borrower or such other U.S. Borrower Guaranteed Party remain unpaid;

(g) consent to or waive any breach of, or any act, omission or default under, this Agreement, any other Loan Document, any Secured Hedge Agreement or Cash Management Services or any of the instruments or agreements referred to herein or therein, or otherwise amend, modify or supplement this Agreement, any other Loan Document, any Secured Hedge Agreement or Cash Management Services or any of such other instruments or agreements; and/or

(h) take any other action that would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge of the U.S. Borrower from its liabilities under this U.S. Borrower Guaranty.

SECTION 10.06. Reliance. It is not necessary for the P.R. Guaranteed Creditors to inquire into the capacity or powers of the P.R. Borrower or the officers, directors, partners or agents acting or purporting to act on its or their behalf, and any U.S. Borrower Guaranteed Obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.

SECTION 10.07. Subordination. Any of the indebtedness of the P.R. Borrower now or hereafter owing to the U.S. Borrower is hereby subordinated to the U.S. Borrower Guaranteed Obligations of the P.R. Borrower or such other U.S. Borrower Guaranteed Party owing to the P.R. Guaranteed Creditors; and if the Administrative Agent so requests at a time when an Event of Default exists, all such indebtedness of the P.R. Borrower or such other U.S. Borrower Guaranteed Party to the U.S. Borrower shall be collected, enforced and received by the U.S. Borrower for the benefit of the P.R. Guaranteed Creditors and be paid over to the Administrative Agent on behalf of the P.R. Guaranteed Creditors on account of the U.S. Borrower Guaranteed Obligations of the P.R. Borrower or such other U.S. Borrower Guaranteed Party to the P.R. Guaranteed Creditors, but without affecting or impairing in any manner the liability of the U.S. Borrower under the other provisions of this U.S. Borrower Guaranty. Prior to the transfer by the U.S. Borrower of any note or negotiable instrument evidencing any of the indebtedness of the P.R. Borrower to the U.S. Borrower, the U.S. Borrower shall mark such note

-140-

or negotiable instrument with a legend that the same is subject to this subordination. Without limiting the generality of the foregoing, the U.S. Borrower hereby agrees with the P.R. Guaranteed Creditors that it will not exercise any right of subrogation which it may at any time otherwise have as a result of this U.S. Borrower Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or otherwise) until all U.S. Borrower Guaranteed Obligations have been irrevocably paid in full in cash.

SECTION 10.08. Waive. (a) The U.S. Borrower waives any right (except as shall be required by applicable statute and cannot be waived) to require any Guaranteed Creditor to (i) proceed against the P.R. Borrower, any other guarantor or any other party, (ii) proceed against or exhaust any security held from the P.R. Borrower, any other guarantor or any other party or (iii) pursue any other remedy in any Guaranteed Creditor’s power whatsoever. The U.S. Borrower waives any defense based on or arising out of any defense of the P.R. Borrower, any other guarantor or any other party, other than payment in full in cash of the U.S. Borrower Guaranteed Obligations, based on or arising out of the disability of the P.R. Borrower, any other Guaranteed Party, any other guarantor or any other party, or the unenforceability of the U.S. Borrower Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the P.R. Borrower other than payment in full in cash of the U.S. Borrower Guaranteed Obligations. The P.R. Guaranteed Creditors may, at their election, foreclose on any security held by any Agent or any other Guaranteed Creditor by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the P.R. Guaranteed Creditors may have against the P.R. Borrower or any other party, or any security, without affecting or impairing in any way the liability of the U.S. Borrower hereunder except to the extent the U.S. Borrower Guaranteed Obligations have been paid in full in cash. The U.S. Borrower waives any defense arising out of any such election by the P.R. Guaranteed Creditors, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of the U.S. Borrower against the P.R. Borrower any other U.S. Borrower, Guaranteed Party or any other party or any security.

(b) The U.S. Borrower waives all presentments, demands for performance, protests and notices, including, without limitation, notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of this U.S. Borrower Guaranty, and notices of the existence, creation or incurring of new or additional U.S. Borrower Guaranteed Obligations. The U.S. Borrower assumes all responsibility for being and keeping itself informed of the P.R. Borrower’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the U.S. Borrower Guaranteed Obligations and the nature, scope and extent of the risks which the U.S. Borrower assumes and incurs hereunder, and agrees that the P.R. Guaranteed Creditors shall have no duty to advise the U.S. Borrower of information known to them regarding such circumstances or risks.

(c) Until such time as the U.S. Borrower Guaranteed Obligations have been paid in full in cash, the U.S. Borrower hereby waives all rights of subrogation which it may at any time otherwise have as a result of this U.S. Borrower Guaranty (whether contractual, under Section 509 of the Bankruptcy Code, or otherwise) to the claims of the P.R. Guaranteed Creditors against the P.R. Borrower or any other guarantor of the U.S. Borrower Guaranteed Obligations and all contractual, statutory or common law rights of reimbursement, contribution or indemnity from the P.R. Borrower or any other guarantor which it may at any time otherwise have as a result of this U.S. Borrower Guaranty.

-141-

(d) The U.S. Borrower hereby acknowledges and affirms that it understands that to the extent the U.S. Borrower Guaranteed Obligations are secured by real property located in California, the U.S. Borrower shall be liable for the full amount of the liability hereunder notwithstanding the foreclosure on such real property by trustee sale or any other reason impairing the U.S. Borrower or any Guaranteed Creditor’s right to proceed against the P.R. Borrower or any other guarantor of the U.S. Borrower Guaranteed Obligations. In accordance with Section 2856 of the California Code of Civil Procedure, the U.S. Borrower hereby waives:

(i) all rights of subrogation, reimbursement, indemnification, and contribution and any other rights and defenses that are or may become available to the U.S. Borrower by reason of Sections 2787 to 2855, inclusive, 2899 and 3433 of the California Code of Civil Procedure;

(ii) all rights and defenses that the U.S. Borrower may have because the U.S. Borrower Guaranteed Obligations are secured by real property located in California, meaning, among other things, that: (A) the P.R. Guaranteed Creditors may collect from the U.S. Borrower without first foreclosing on any real or personal property collateral pledged by any Credit Party, and (B) if the P.R. Guaranteed Creditors foreclose on any real property collateral pledged by any Credit Agreement Party, (1) the amount of the U.S. Borrower Guaranteed Obligations may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price, and (2) the P.R. Guaranteed Creditors may collect from the U.S. Borrower even if the P.R. Guaranteed Creditors, by foreclosing on the real property collateral, have destroyed any right the U.S. Borrower may have to collect from the P.R. Borrower, it being understood that this is an unconditional and irrevocable waiver of any rights and defenses the U.S. Borrower may have because the U.S. Borrower Guaranteed Obligations are secured by real property (including, without limitation, any rights or defenses based upon Section 580a, 580d or 726 of the California Code of Civil Procedure); and

(iii) all rights and defenses arising out of an election of remedies by the P.R. Guaranteed Creditors, even though that election of remedies, such as a non-judicial foreclosure with respect to security for the U.S. Borrower Guaranteed Obligations, has destroyed the U.S. Borrower’s rights of subrogation and reimbursement against the P.R. Borrower by the operation of Section 580d of the California Code of Civil Procedure or otherwise.

(e) The U.S. Borrower warrants and agrees that each of the waivers set forth above is made with full knowledge of its significance and consequences and that if any of such waivers are determined to be contrary to any applicable law of public policy, such waivers shall be effective only to the maximum extent permitted by law.

SECTION 10.09. Payments. All payments made by the U.S. Borrower pursuant to this Section 10 shall be made in Dollars. All payments made by the U.S. Borrower pursuant to this Section 10 will be made without setoff, counterclaim or other defense, and shall be subject to the provisions of Sections 2.12 and 3.01.

-142-

ARTICLE XI

The Holdings Guaranty

SECTION 11.01. The Holdings Guaranty. In order to induce the Lenders to enter into this Agreement and to extend credit hereunder and to induce the Lenders or any of their respective Affiliates to enter into Secured Hedge Agreements or Cash Management Services, and in recognition of the direct benefits to be received by Holdings from the proceeds of the Loans, the issuance of the Letters of Credit and the entering into of Secured Hedge Agreements or Cash Management Services, Holdings hereby unconditionally and irrevocably guarantees (the “Holdings Guaranty”), as primary obligor and not merely as surety the full and prompt payment when due, whether upon maturity, acceleration or otherwise, of any and all of the Holdings Guaranteed Obligations to the Guaranteed Creditors. If any or all of the Holdings Guaranteed Obligations to the Guaranteed Creditors becomes due and payable hereunder, Holdings unconditionally promises to pay such indebtedness to the Guaranteed Creditors, on demand, together with any and all expenses which may be incurred by the Guaranteed Creditors in collecting any of the Holdings Guaranteed Obligations. This Holdings Guaranty is a guaranty of payment and not of collection. This Holdings Guaranty is a continuing one and all liabilities to which it applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon. If any claim is ever made upon any Guaranteed Creditor for repayment or recovery of any amount or amounts received in payment or on account of any of the Holdings Guaranteed Obligations and any of the aforesaid payees repays all or part of said amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over such payee or any of its property or (ii) any settlement or compromise of any such claim effected by such payee with any such claimant (including the Borrowers), then and in such event Holdings agrees that any such judgment, decree, order, settlement or compromise shall be binding upon Holdings, notwithstanding any revocation of this Holdings Guaranty or any other instrument evidencing any liability of the Borrowers, and Holdings shall be and remain liable to the aforesaid payees hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by any such payee.

SECTION 11.02. Bankruptcy. Additionally, Holdings unconditionally and irrevocably, guarantees the payment of any and all of the Holdings Guaranteed Obligations to the Guaranteed Creditors whether or not due or payable by the Borrowers upon the occurrence of any of the events specified in Section 8.01(f), and unconditionally promises to pay such indebtedness to the Guaranteed Creditors, or order, on demand.

SECTION 11.03. Nature of Liability. The liability of Holdings hereunder is exclusive and independent of any security for or other guaranty of the Holdings Guaranteed Obligations whether executed by Holdings, any other guarantor or by any other party, and the liability of Holdings hereunder is not affected or impaired by (a) any direction as to application of payment by the Borrowers or any other party, or (b) any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the Holdings Guaranteed Obligations, or (c) any payment on or in respect of any such other guaranty or

-143-

undertaking, or (d) any dissolution, termination or increase, decrease or change in personnel by the Borrowers or (e) any payment made to the Guaranteed Creditors on the Holdings Guaranteed Obligations which any such Guaranteed Creditor repays to the Borrowers pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and Holdings waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding, or (f) any action or inaction of the type described in Section 11.05, or (g) the lack of validity or enforceability of any Loan Document or any other instrument relating thereto.

SECTION 11.04. Independent Obligation. No invalidity, irregularity or unenforceability of all or any part of the Holdings Guaranteed Obligations or of any security therefor shall affect, impair or be a defense to this Holdings Guaranty, and this Holdings Guaranty shall be primary, absolute and unconditional notwithstanding the occurrence of any event or the existence of any other circumstances which might constitute a legal or equitable discharge of a surety or guarantor except payment in full in cash of the Holdings Guaranteed Obligations. The obligations of Holdings hereunder are independent of the obligations of the Borrowers, any other guarantor or any other party, and a separate action or actions may be brought and prosecuted against Holdings whether or not action is brought against the Borrowers, any other Holdings Guaranteed Party, any other guarantor or any other party and whether or not the Borrowers, any other Holdings Guaranteed Party, any other guarantor or any other party be joined in any such action or actions. Holdings waives, to the full extent permitted by law, the benefit of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by the Borrowers or any other Holdings Guaranteed Party or other circumstance that operates to toll any statute of limitations as to the Borrowers or such other Holdings Guaranteed Party shall operate to toll the statute of limitations as to Holdings.

SECTION 11.05. Authorization. Holdings authorizes the Guaranteed Creditors without notice or demand (except as shall be required by applicable statute and cannot be waived), and without affecting or impairing its liability hereunder, from time to time to:

(a) change the manner, place or terms of payment of, and/or change or extend the time of payment of, renew, increase, accelerate or alter, any of the Holdings Guaranteed Obligations (including any increase or decrease in the rate of interest thereon), any security therefor, or any liability incurred directly or indirectly in respect thereof, and this Holdings Guaranty made shall apply to the Holdings Guaranteed Obligations as so changed, extended, renewed, increased or altered;

(b) take and hold security for the payment of the Holdings Guaranteed Obligations and sell, exchange, release, impair, surrender, realize upon or otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the Holdings Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset there against;

(c) exercise or refrain from exercising any rights against the Borrowers, any other Holdings Guaranteed Party or others or otherwise act or refrain from acting;

-144-

(d) release or substitute any one or more endorsers, guarantors, the Borrowers, any other Holdings Guaranteed Party or other obligors;

(e) settle or compromise any of the Holdings Guaranteed Obligations, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of the Borrowers or any other Holdings Guaranteed Party to their respective creditors other than the Guaranteed Creditors;

(f) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of the Borrowers or any other Holdings Guaranteed Party to the Guaranteed Creditors regardless of what liability or liabilities of the Borrowers or such other Holdings Guaranteed Party remain unpaid;

(g) consent to or waive any breach of, or any act, omission or default under, this Agreement, any other Loan Document, any Secured Hedge Agreement or Cash Management Services or any of the instruments or agreements referred to herein or therein, or otherwise amend, modify or supplement this Agreement, any other Loan Document, any Secured Hedge Agreement or Cash Management Services or any of such other instruments or agreements; and/or

(h) take any other action that would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge of Holdings from its liabilities under this Holdings Guaranty.

SECTION 11.06. Reliance. It is not necessary for the Guaranteed Creditors to inquire into the capacity or powers of the Borrowers or any other Holdings Guaranteed Party or the officers, directors, partners or agents acting or purporting to act on its or their behalf, and any Holdings Guaranteed Obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.

SECTION 11.07. Subordination. Any of the indebtedness of the Borrowers or any other Holdings Guaranteed Party now or hereafter owing to Holdings is hereby subordinated to the Holdings Guaranteed Obligations of the Borrowers or such other Holdings Guaranteed Party owing to the Guaranteed Creditors; and if the Administrative Agent so requests at a time when an Event of Default exists, all such indebtedness of the Borrowers or such other Holdings Guaranteed Party to Holdings shall be collected, enforced and received by Holdings for the benefit of the Guaranteed Creditors and be paid over to the Administrative Agent on behalf of the Guaranteed Creditors on account of the Holdings Guaranteed Obligations of the Borrowers or such other Holdings Guaranteed Party to the Guaranteed Creditors, but without affecting or impairing in any manner the liability of Holdings under the other provisions of this Holdings Guaranty. Prior to the transfer by Holdings of any note or negotiable instrument evidencing any of the indebtedness of the Borrowers or any other Holdings Guaranteed Party to Holdings, Holdings shall mark such note or negotiable instrument with a legend that the same is subject to this subordination. Without limiting the generality of the foregoing, Holdings hereby agrees with the Guaranteed Creditors that it will not exercise any right of subrogation which it may at

-145-

any time otherwise have as a result of this Holdings Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or otherwise) until all Holdings Guaranteed Obligations have been irrevocably paid in full in cash.

SECTION 11.08. Waiver. (a) Holdings waives any right (except as shall be required by applicable statute and cannot be waived) to require any Guaranteed Creditor to (i) proceed against the Borrowers or any other Holdings Guaranteed Party, any other guarantor or any other party, (ii) proceed against or exhaust any security held from the Borrowers or any other Holdings Guaranteed Party, any other guarantor or any other party or (iii) pursue any other remedy in any Guaranteed Creditor’s power whatsoever. Holdings waives any defense based on or arising out of any defense of the Borrowers or any other Holdings Guaranteed Party, any other guarantor or any other party, other than payment in full in cash of the Holdings Guaranteed Obligations, based on or arising out of the disability of the Borrowers, any other Guaranteed Party, any other guarantor or any other party, or the unenforceability of the Holdings Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Borrowers or any other Holdings Guaranteed Party other than payment in full in cash of the Holdings Guaranteed Obligations. The Guaranteed Creditors may, at their election, foreclose on any security held by any Agent or any other Guaranteed Creditor by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the Guaranteed Creditors may have against the Borrowers, any other Holdings Guaranteed Party or any other party, or any security, without affecting or impairing in any way the liability of Holdings hereunder except to the extent the Holdings Guaranteed Obligations have been paid in full in cash. Holdings waives any defense arising out of any such election by the Guaranteed Creditors, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of Holdings against the Borrowers or any other party or any security.

(b) Holdings waives all presentments, demands for performance, protests and notices, including, without limitation, notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of this Holdings Guaranty, and notices of the existence, creation or incurring of new or additional Holdings Guaranteed Obligations. Holdings assumes all responsibility for being and keeping itself informed of each Borrower’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Holdings Guaranteed Obligations and the nature, scope and extent of the risks which Holdings assumes and incurs hereunder, and agrees that the Guaranteed Creditors shall have no duty to advise Holdings of information known to them regarding such circumstances or risks.

(c) Until such time as the Holdings Guaranteed Obligations have been paid in full in cash, Holdings hereby waives all rights of subrogation which it may at any time otherwise have as a result of this Holdings Guaranty (whether contractual, under Section 509 of the Bankruptcy Code, or otherwise) to the claims of the Guaranteed Creditors against the Borrowers or any other guarantor of the Holdings Guaranteed Obligations and all contractual, statutory or common law rights of reimbursement, contribution or indemnity from the Borrowers or any other guarantor which it may at any time otherwise have as a result of this Holdings Guaranty.

-146-

(d) Holdings hereby acknowledges and affirms that it understands that to the extent the Holdings Guaranteed Obligations are secured by real property located in California, Holdings shall be liable for the full amount of the liability hereunder notwithstanding the foreclosure on such real property by trustee sale or any other reason impairing Holdings or any Guaranteed Creditor’s right to proceed against any Borrower or any other guarantor of the Holdings Guaranteed Obligations. In accordance with Section 2856 of the California Code of Civil Procedure, Holdings hereby waives:

(i) all rights of subrogation, reimbursement, indemnification, and contribution and any other rights and defenses that are or may become available to Holdings by reason of Sections 2787 to 2855, inclusive, 2899 and 3433 of the California Code of Civil Procedure;

(ii) all rights and defenses that Holdings may have because the Holdings Guaranteed Obligations are secured by real property located in California, meaning, among other things, that: (A) the Guaranteed Creditors may collect from Holdings without first foreclosing on any real or personal property collateral pledged by any Credit Agreement Party, and (B) if the Guaranteed Creditors foreclose on any real property collateral pledged by any Credit Agreement Party, (1) the amount of the Holdings Guaranteed Obligations may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price, and (2) the Guaranteed Creditors may collect from Holdings even if the Guaranteed Creditors, by foreclosing on the real property collateral, have destroyed any right Holdings may have to collect from any Borrower, it being understood that this is an unconditional and irrevocable waiver of any rights and defenses Holdings may have because the Holdings Guaranteed Obligations are secured by real property (including, without limitation, any rights or defenses based upon Section 580a, 580d or 726 of the California Code of Civil Procedure); and

(iii) all rights and defenses arising out of an election of remedies by the Guaranteed Creditors, even though that election of remedies, such as a non-judicial foreclosure with respect to security for the Holdings Guaranteed Obligations, has destroyed Holdings’ rights of subrogation and reimbursement against any Borrower by the operation of Section 580d of the California Code of Civil Procedure or otherwise.

(e) Holdings warrants and agrees that each of the waivers set forth above is made with full knowledge of its significance and consequences and that if any of such waivers are determined to be contrary to any applicable law of public policy, such waivers shall be effective only to the maximum extent permitted by law.

SECTION 11.09. Payments. All payments made by Holdings pursuant to this Section 11 shall be made in Dollars. All payments made by Holdings pursuant to this Section 11 will be made without setoff, counterclaim or other defense, and shall be subject to the provisions of Sections 2.12 and 3.01.

-147-

ARTICLE XII

Miscellaneous

SECTION 12.01. Amendments, Etc. Except as otherwise set forth in this Agreement, no amendment, modification, supplement or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the U.S. Borrower, the P.R. Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the U.S. Borrower, the P.R. Borrower or the applicable Loan Party, as the case may be, and each such waiver, amendment, modification, supplement or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that, no such amendment, modification, supplement waiver or consent shall:

(a) extend or increase the Commitment of any Lender without the written consent of each Lender directly affected thereby (it being understood that a waiver of any condition precedent set forth in Section 4.02 or the waiver of any Default, mandatory prepayment or mandatory reduction of the Commitments shall not constitute an extension or increase of any Commitment of any Lender);

(b) extend the date of any scheduled repayment of any Tranche of Term Loans pursuant to Sections 2.07(a), (b) or (c) without the consent of the Supermajority Lenders holding such Tranche of Term Loans, or amend the definition of Supermajority Lenders without the consent of the Supermajority Lenders with respect to each Tranche of Term Loans (it being understood that, with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Supermajority Lenders on substantially the same basis as the extensions of Term Loans and Revolving Credit Commitments are included on the Closing Date);

(c) postpone the final scheduled maturity date for, or reduce the amount of, any payment of principal or interest under Section 2.07 or 2.08 without the written consent of each Lender directly affected thereby, it being understood that the waiver of (or amendment to the terms of) any mandatory prepayment of the Term Loans shall not constitute a postponement of any date scheduled for the payment of principal or interest;

(d) reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or (subject to clause (iii) of the second proviso to this Section 12.01) any fees (including fees set forth in Section 2.05(a)(iv)) or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby, it being understood that any change to the definition of Total Leverage Ratio or in the component definitions thereof shall not constitute a reduction in the rate; provided that, only the consent of the Required Lenders shall be necessary to amend the definition of “Default Rate” or to waive any obligation of the Borrowers to pay interest at the Default Rate;

(e) change any provision of this Section 12.01, the definition of “Required Lenders” or “Pro Rata Share” or Section 2.06(c) or 2.13 without the written consent of each Lender affected thereby;

-148-

(f) other than in a transaction permitted under Section 7.05, release all or substantially all of the Collateral in any transaction or series of related transactions, without the written consent of each Lender; or

(g) other than in connection with a transaction permitted under Section 7.04 or 7.05, release all or substantially all of the aggregate value of the Guarantees, without the written consent of each Lender;

and provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by each L/C Issuer in addition to the Lenders required above, affect the rights or duties of an L/C Issuer under this Agreement or any Letter of Credit Application relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of, or any fees or other amounts payable to, the Administrative Agent under this Agreement or any other Loan Document; (iv) Section 12.07(h) may not be amended, waived or otherwise modified without the consent of each Granting Lender all or any part of whose Loans are being funded by an SPC at the time of such amendment, waiver or other modification; and (v) the consent of Lenders holding more than 50% of any Class of Commitments shall be required with respect to any amendment that by its terms adversely affects the rights of such Class in respect of payments hereunder in a manner different than such amendment affects other Classes. Any such waiver and any such amendment, modification or supplement in accordance with the terms of this Section 12.01 shall apply equally to each of the Lenders and shall be binding on the Loan Parties, the Lenders, the Agents and all future holders of the Loans and Commitments. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender (it being understood that any Commitments or Loans held or deemed held by any Defaulting Lender shall be excluded for a vote of the Lenders hereunder requiring any consent of the Lenders).

Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the U.S. Borrower (a) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Term Loans and the Revolving Credit Loans and the accrued interest and fees in respect thereof and (b) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders.

In addition, notwithstanding the foregoing, this Agreement may be amended with the written consent of the Administrative Agent, the U.S. Borrower and the Lenders providing the relevant Replacement Term Loans to permit the refinancing of all outstanding U.S. Term Loans (“Refinanced Term Loans”) with a replacement term loan tranche denominated in Dollars (“Replacement Term Loans”) hereunder; provided that (a) the aggregate principal amount of such Replacement Term Loans shall not exceed the aggregate principal amount of

-149-

such Refinanced Term Loans, (b) the Applicable Rate for such Replacement Term Loans shall not be higher than the Applicable Rate for such Refinanced Term Loans, (c) the Weighted Average Life to Maturity of such Replacement Term Loans shall not be shorter than the Weighted Average Life to Maturity of such Refinanced Term Loans at the time of such refinancing (except to the extent of nominal amortization for periods where amortization has been eliminated as a result of prepayment of the applicable Term Loans) and (d) all other terms applicable to such Replacement Term Loans shall be substantially identical to, or less favorable to the Lenders providing such Replacement Term Loans than, those applicable to such Refinanced Term Loans, except to the extent necessary to provide for covenants and other terms applicable to any period after the latest final maturity of the Term Loans in effect immediately prior to such refinancing.

SECTION 12.02. Notices and Other Communications; Facsimile Copies. (a) General. Unless otherwise expressly provided herein, all notices and other communications provided for hereunder or under any other Loan Document shall be in writing (including by facsimile transmission). All such written notices shall be mailed, faxed or delivered to the applicable address, facsimile number or electronic mail address, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

(i) if to any Borrower, the Administrative Agent, an L/C Issuer or the Swing Line Lender, to the address, facsimile number, electronic mail address or telephone number specified for such Person on Schedule 12.02 or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the other parties; and

(ii) if to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified in its Administrative Questionnaire or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the Borrowers, the Administrative Agent, the L/C Issuers and the Swing Line Lender.

All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; (B) if delivered by mail, four (4) Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail (which form of delivery is subject to the provisions of Section 12.02(c)), when delivered; provided that notices and other communications to the Administrative Agent, the L/C Issuers and the Swing Line Lender pursuant to Article 2 shall not be effective until actually received by such Person. In no event shall a voice mail message be effective as a notice, communication or confirmation hereunder.

(b) Effectiveness of Facsimile Documents and Signatures. Loan Documents may be transmitted and/or signed by facsimile. The effectiveness of any such documents and signatures shall, subject to applicable Law, have the same force and effect as manually signed originals and shall be binding on all Loan Parties, the Agents and the Lenders.

-150-

(c) Reliance by Agents and Lenders. The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic Loan Notices and Swing Line Loan Notices) purportedly given by or on behalf of the Borrowers even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The U.S. Borrower shall indemnify each Agent-Related Person and each Lender from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the U.S. Borrower in the absence of gross negligence or willful misconduct. All telephonic notices to the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

SECTION 12.03. No Waiver; Cumulative Remedies. No failure by any Lender or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by Law.

SECTION 12.04. Attorney Costs, Expenses and Taxes. Each Borrower agrees (a) if the Closing Date occurs, to pay or reimburse the Administrative Agent, the Collateral Agent and the Arrangers for all reasonable out-of-pocket costs and expenses incurred in connection with the preparation, negotiation, syndication and execution of this Agreement and the other Loan Documents, and any amendment, waiver, consent or other modification of the provisions hereof and thereof (whether or not the transactions contemplated thereby are consummated), and the consummation and administration of the transactions contemplated hereby and thereby, including all Attorney Costs of White & Case LLP, and (b) to pay or reimburse the Administrative Agent, the Collateral Agent, and each Lender for all reasonable out-of-pocket costs and expenses incurred in connection with the enforcement of any rights or remedies under this Agreement or the other Loan Documents (including all such costs and expenses incurred during any legal proceeding, including any proceeding under any Debtor Relief Law, and including all Attorney Costs of counsel to the Administrative Agent). The foregoing costs and expenses shall include all reasonable search, filing, recording and title insurance charges and fees and taxes related thereto, and other reasonable out-of-pocket expenses incurred by any Agent. The agreements in this Section 12.04 shall survive the termination of the Aggregate Commitments and repayment of all other Obligations. All amounts due under this Section 12.04 shall be paid within ten (10) Business Days of receipt by the respective Borrower of an invoice relating thereto setting forth such expenses in reasonable detail. If any Loan Party fails to pay when due any costs, expenses or other amounts payable by it hereunder or under any Loan Document, such amount may be paid on behalf of such Loan Party by the Administrative Agent in its sole discretion.

SECTION 12.05. Indemnification by the U.S. Borrower. Whether or not the transactions contemplated hereby are consummated, each Borrower shall indemnify and hold

-151-

harmless each Agent-Related Person, each Lender and their respective Affiliates, directors, officers, employees, counsel, agents, trustees, investment advisors and attorneys-in-fact (collectively the “Indemnitees”) from and against any and actual out-of-pocket cost, out-of-pocket expenses (including Attorney Costs, limited to Attorney Costs in connection with one counsel for all Indemnitees (and, solely in the case of an actual conflict of interest, one additional counsel to the affected Indemnitees, taken as a whole)) and liabilities of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to or arising out of or in connection with (a) the execution, delivery, enforcement, performance or administration of any Loan Document or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, (b) any Commitment, Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by an L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), or (c) any actual or alleged presence or release of Hazardous Materials on or from any property currently or formerly owned or operated by any Borrower, any Subsidiary or any other Loan Party, or any Environmental Liability related in any way to any Borrower, any Subsidiary or any other Loan Party, or (d) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party thereto (all the foregoing, collectively, the “Indemnified Liabilities”), in all cases, whether or not caused by or arising, in whole or in part, out of the negligence of the Indemnitee; provided, that no Borrower shall have any obligation to reimburse any Indemnitee for fees and expenses unless such Indemnitee provides such Borrower an executed undertaking in which such Indemnitee agrees to refund and return any and all amounts paid by such Borrower to such Indemnitee to the extent such Indemnified Party is found, pursuant to a nonappealable judgment of a court of competent jurisdiction, to not be entitled to such amounts pursuant to the terms hereof; provided further that such indemnity shall not, as to any Indemnitee, be available to the extent that (a) such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses or disbursements resulted from the willful misconduct, bad faith, fraud or gross negligence of such Indemnitee or of any Affiliate, director, officer, employee, counsel, agent, trustee, investment advisor or attorney-in-fact of such Indemnitee, (b) for any Indemnitee’s (or any of its affiliate’s or related party’s) breach of its obligations under the Loan Documentation, or (c) for any dispute arising out of or in connection with any claim, litigation, investigation or proceeding that does not involve an act or omission of any Borrower or any of its affiliates and that is brought by an Indemnitee against any other Indemnitee. No Indemnitee shall be liable for any damages arising from the use by others of any information or other materials obtained through IntraLinks or other similar information transmission systems in connection with this Agreement in the absence of such Indemnitee’s or of any Affiliate, director, officer, employee, counsel, agent, trustee, investment advisor or attorney-in-fact of such Indemnitee’s gross negligence or willful misconduct, nor shall any Indemnitee or any Loan Party have any liability for any special, punitive, indirect or consequential damages relating to this Agreement or any other Loan Document or arising out of its activities in connection herewith or therewith (whether before or after the Closing Date). In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 12.05 applies, such

-152-

indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by any Loan Party, its directors, stockholders or creditors or an Indemnitee or any other Person, whether or not any Indemnitee is otherwise a party thereto and whether or not any of the transactions contemplated hereunder or under any of the other Loan Documents is consummated. All amounts due under this Section 12.05 shall be paid within ten (10) Business Days after written demand therefor; provided, however, that such Indemnitee shall promptly refund such amount to the extent that there is a final judicial or arbitral determination that such Indemnitee was not entitled to indemnification or contribution rights with respect to such payment pursuant to the express terms of this Section 12.05. The agreements in this Section 12.05 shall survive the resignation of the Administrative Agent, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.

SECTION 12.06. Payments Set Aside. To the extent that any payment by or on behalf of either Borrower is made to any Agent or any Lender, or any Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by such Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by any Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate for the first three days and equal to the rate applicable to Revolving Credit Loans that are maintained as Base Rate Loans for each day thereafter.

SECTION 12.07. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that no Credit Agreement Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee, (ii) by way of participation in accordance with the provisions of Section 12.07(e), (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 12.07(g) or (iv) to an SPC in accordance with the provisions of Section 12.07(h) (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in Section 12.07(e) and, to the extent expressly contemplated hereby, the Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees that is not the U.S. Borrower or any of its affiliates or a Disqualified Institution (“Assignees”) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans (including for purposes

-153-

of this Section 12.07(b), participations in L/C Obligations and in Swing Line Loans) at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld, delayed or conditioned) of:

(A) the U.S. Borrower, provided that no consent of the U.S. Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default under Section 8.01(a) or (in each case with respect to any Loan Party) Section 8.01, (f) or (g) has occurred and is continuing, any Assignee;

(B) the Administrative Agent, provided that no consent of the Administrative Agent shall be required for an assignment (i) of all or any portion of a Term Loan to a Lender, an Affiliate of a U.S. Term Lender or a P.R. Term Lender or an Approved Fund in respect of a U.S. Term Lender or a P.R. Term Lender or (ii) to an Agent or an Affiliate of an Agent;

(C) each Principal L/C Issuer at the time of such assignment, provided that no consent of the Principal L/C Issuers shall be required for any assignment of a Term Loan or any assignment to an Agent or an Affiliate of an Agent; and

(D) the Swing Line Lender; provided that no consent of the Swing Line Lender shall be required for any assignment of a Term Loan or any assignment to an Agent or an Affiliate of an Agent.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 (in the case of the Revolving Credit Facility), or $1,000,000 (in the case of a Term Loan) unless each of the U.S. Borrower and the Administrative Agent otherwise consents, provided that (1) no such consent of the U.S. Borrower shall be required if an Event of Default under Section 8.01(a) or (in each case with respect to any Loan Party) Section 8.01, (f) or (g) has occurred and is continuing and (2) such amounts shall be aggregated in respect of each Lender and its Affiliates or Approved Funds, if any;

(B) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; provided that no such processing and recordation fee shall be payable in connection with an assignment in accordance with Section 3.07(a); and

(C) the Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

This paragraph (b) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among separate Facilities on a non-pro rata basis.

-154-

(c) Subject to acceptance and recording thereof by the Administrative Agent pursuant to Section 12.07(d), from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, 12.04 and 12.05 with respect to facts and circumstances occurring prior to the effective date of such assignment). Upon request, and the surrender by the assigning Lender of its Note, the respective Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this clause (c) shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 12.07(e).

(d) The Administrative Agent, acting solely for this purpose as an agent of the U.S. Borrower shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and related interest amounts) of the Loans, L/C Obligations (specifying the Unreimbursed Amounts), L/C Borrowings and amounts due under Section 2.03, owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, absent manifest error, and the U.S. Borrower, the Agents and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The registration of an assignment or transfer or all or part of any Commitments, Loans, L/C Obligations or L/C Borrowings shall be recorded by the Administrative Agent on the Register only upon acceptance by the Administrative Agent of a properly executed and delivered assignment agreement and assumption agreement pursuant to this Section 12.07(d). Coincident with the delivery of such an assignment and assumption agreement to the Administrative Agent for acceptance and registration of assignment or transfer of all or part of a Loan, or as soon thereafter as practicable, the assigning or transferor Lender shall surrender the Note evidencing such Loan, and thereupon one or more new Notes in the same aggregate principal amount shall be issued to the assigning or transferor Lender and/or the new Lender. The Register shall be available for inspection by the respective Borrower, any Agent and any Lender, at any reasonable time and from time to time upon reasonable prior notice. The Borrowers agree to indemnify the Administrative Agent from and against any and all losses, claims, damages and liabilities of whatsoever nature which may be imposed on, asserted against or incurred by the Administrative Agent in performing its duties under this Section 12.07(d).

(e) Any Lender may at any time, without the consent of, or notice to, the U.S. Borrower, the Administrative Agent, the L/C Issuers or the Swing Line Lender, sell participations to any Person (other than a natural person, the U.S. Borrower or any of its affiliates or a Disqualified Institution) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s participations in L/C Obligations and/or Swing Line

-155-

Loans) owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the U.S. Borrower, the Agents and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and the other Loan Documents and to approve any amendment, modification or waiver of any provision of this Agreement or the other Loan Documents; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 12.01 that directly affects such Participant. Subject to Section 12.07(f), the U.S. Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 12.07(c) but shall not be entitled to recover greater amounts under such Sections than the selling Lender would be entitled to recover. To the extent permitted by applicable Law, each Participant also shall be entitled to the benefits of Section 12.09 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.13 as though it were a Lender.

(f) A Participant shall not be entitled to receive any greater payment under Section 3.01, 3.04 or 3.05 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the U.S. Borrower’s prior written consent. A Participant shall not be entitled to the benefits of Section 3.01 unless the U.S. Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the U.S. Borrower, to comply with Section 3.01 as though it were a Lender.

(g) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(h) Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the U.S. Borrower (an “SPC”) the option to provide all or any part of any Loan that such Granting Lender would otherwise be obligated to make pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof. Each party hereto hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of any U.S. Borrower under this Agreement (including its obligations under Section 3.01, 3.04 or 3.05), (ii) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender would be liable, and (iii) the Granting Lender shall for all purposes, including the approval of

-156-

any amendment, waiver or other modification of any provision of any Loan Document, remain the lender of record hereunder. The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender. Notwithstanding anything to the contrary contained herein, any SPC may (i) with notice to, but without prior consent of the U.S. Borrower and the Administrative Agent and with the payment of a processing fee of $3,500, assign all or any portion of its right to receive payment with respect to any Loan to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Loans to any rating agency, commercial paper dealer or provider of any surety or Guarantee or credit or liquidity enhancement to such SPC.

(i) Notwithstanding anything to the contrary contained herein, (1) any Lender may in accordance with applicable Law create a security interest in all or any portion of the Loans owing to it and the Note, if any, held by it and (2) any Lender that is a Fund may create a security interest in all or any portion of the Loans owing to it and the Note, if any, held by it to the trustee for holders of obligations owed, or securities issued, by such Fund as security for such obligations or securities; provided that unless and until such trustee actually becomes a Lender in compliance with the other provisions of this Section 12.07, (i) no such pledge shall release the pledging Lender from any of its obligations under the Loan Documents and (ii) such trustee shall not be entitled to exercise any of the rights of a Lender under the Loan Documents even though such trustee may have acquired ownership rights with respect to the pledged interest through foreclosure or otherwise.

(j) Notwithstanding anything to the contrary contained herein, any L/C Issuer or the Swing Line Lender may, upon thirty (30) days’ notice to the U.S. Borrower and the Lenders, resign as an L/C Issuer or the Swing Line Lender, respectively; provided that on or prior to the expiration of such 30-day period with respect to such resignation, the relevant L/C Issuer or the Swing Line Lender shall have identified a successor L/C Issuer or Swing Line Lender reasonably acceptable to the U.S. Borrower willing to accept its appointment as successor L/C Issuer or Swing Line Lender, as applicable. In the event of any such resignation of an L/C Issuer or the Swing Line Lender, the U.S. Borrower shall be entitled to appoint from among the Lenders willing to accept such appointment a successor L/C Issuer or Swing Line Lender hereunder; provided that no failure by the U.S. Borrower to appoint any such successor shall affect the resignation of the relevant L/C Issuer or the Swing Line Lender, as the case may be, except as expressly provided above. If an L/C Issuer resigns as an L/C Issuer, it shall retain all the rights and obligations of an L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If the Swing Line Lender resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c).

SECTION 12.08. Confidentiality. Each of the Agents and the Lenders agrees to maintain the confidentiality of the Information, except that Information may be disclosed (a) to its Affiliates and its and its Affiliates’ directors, officers, employees, trustees, investment

-157-

advisors and agents, including accountants, legal counsel and other advisors (“Related Parties”) (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential in accordance with its customary procedure for handling confidential information of this nature and in accordance with safe and sound banking practice (in the case of any Person that is a bank) and that the relevant Agent or Lender shall be responsible for the compliance by its Affiliates and its and its Affiliates’ Related Parties with the foregoing provision); (b) to the extent requested by any Governmental Authority; (c) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process; (d) to any other party to this Agreement; (e) subject to an agreement containing provisions substantially the same as those of this Section 12.08 (or as may otherwise be reasonably acceptable to the U.S. Borrower), to any pledgee referred to in Section 12.07(g), counterparty to a Swap Contract, Eligible Assignee of or Participant in, or any prospective Eligible Assignee of or Participant in, any of its rights or obligations under this Agreement; (f) with the written consent of the U.S. Borrower; (g) to the extent such Information becomes publicly available other than as a result of a breach of this Section 12.08; (h) to any Governmental Authority or examiner (including the National Association of Insurance Commissioners or any other similar organization) regulating any Lender; or (i) to any rating agency when required by it (it being understood that, prior to any such disclosure, such rating agency shall undertake to preserve the confidentiality of any Information relating to the Loan Parties received by it from such Lender). In addition, the Agents and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry, and service providers to the Agents and the Lenders in connection with the administration and management of this Agreement, the other Loan Documents, the Commitments, and the Credit Extensions. For the purposes of this Section 12.08, “Information” means all information received from any Loan Party relating to any Loan Party or its business, other than any such information that is publicly available to any Agent or any Lender prior to disclosure by any Loan Party other than as a result of a breach of this Section 12.08; provided that, in the case of information received from a Loan Party after the date hereof, such information is clearly identified at the time of delivery as confidential or (ii) is delivered pursuant to Section 6.01, 6.02 or 6.03 hereof.

SECTION 12.09. Setoff. In addition to any rights and remedies of the Lenders provided by Law, upon the occurrence and during the continuance of any Event of Default, each Lender and its Affiliates is authorized at any time and from time to time, without prior notice to the U.S. Borrower or any other Loan Party, any such notice being waived by the U.S. Borrower (on its own behalf and on behalf of each Loan Party and its Subsidiaries) to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other Indebtedness at any time owing by, such Lender and its Affiliates to or for the credit or the account of the respective Loan Parties and their Subsidiaries against any and all Obligations owing to such Lender and its Affiliates hereunder or under any other Loan Document, now or hereafter existing, irrespective of whether or not such Agent or such Lender or Affiliate shall have made demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured or denominated in a currency different from that of the applicable deposit or Indebtedness. Each Lender agrees promptly to notify in writing the U.S. Borrower and the Administrative Agent after any such set off and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such setoff and application. The rights of the

-158-

Administrative Agent and each Lender under this Section 12.09 are in addition to other rights and remedies (including other rights of setoff) that the Administrative Agent and such Lender may have.

SECTION 12.10. Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If any Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the U.S. Borrower. In determining whether the interest contracted for, charged, or received by an Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

SECTION 12.11. Counterparts. This Agreement and each other Loan Document 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. Delivery by telecopier of an executed counterpart of a signature page to this Agreement and each other Loan Document shall be effective as delivery of an original executed counterpart of this Agreement and such other Loan Document. The Agents may also require that any such documents and signatures delivered by telecopier be confirmed by a manually signed original thereof; provided that the failure to request or deliver the same shall not limit the effectiveness of any document or signature delivered by telecopier.

SECTION 12.12. Integration. This Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter. In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall control; provided that the inclusion of supplemental rights or remedies in favor of the Agents or the Lenders in any other Loan Document shall not be deemed a conflict with this Agreement. Each Loan Document was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof.

SECTION 12.13. Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by each Agent and each Lender, regardless of any investigation made by any Agent or any Lender or on their behalf and notwithstanding that any Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied (other than Obligations under Secured Hedge Agreements, Cash

-159-

Management Obligations or contingent indemnification obligations, in any such case, not then due and payable) or any Letter of Credit shall remain outstanding.

SECTION 12.14. Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 12.15. GOVERNING LAW. (a) THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) ANY LEGAL ACTION OR PROCEEDING ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE U.S. BORROWER, THE P.R. BORROWER, HOLDINGS, EACH AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE U.S. BORROWER, THE P.R. BORROWER, HOLDINGS, EACH AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.

SECTION 12.16. WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 12.16 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

-160-

SECTION 12.17. Binding Effect. This Agreement shall become effective when it shall have been executed by the Borrowers and Holdings and the Administrative Agent shall have been notified by each Lender, Swing Line Lender and L/C Issuer that each such Lender, Swing Line Lender and L/C Issuer has executed it and thereafter shall be binding upon and inure to the benefit of the Borrowers, each Agent and each Lender and their respective successors and assigns, except that each Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lenders, except as permitted by Section 7.04.

SECTION 12.18. Lender Action. Each Lender agrees that it shall not take or institute any actions or proceedings, judicial or otherwise, for any right or remedy against any Loan Party or any other obligor under any of the Loan Documents or the Secured Hedge Agreements (including the exercise of any right of setoff, rights on account of any banker’s lien or similar claim or other rights of self-help), or institute any actions or proceedings, or otherwise commence any remedial procedures, with respect to any Collateral or any other property of any such Loan Party, without the prior written consent of the Administrative Agent. The provisions of this Section 12.18 are for the sole benefit of the Lenders and shall not afford any right to, or constitute a defense available to, any Loan Party.

SECTION 12.19. USA PATRIOT Act. Each Lender hereby notifies the Borrowers that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies each Borrower, which information includes the name and address of such Borrower and other information that will allow such Lender to identify such Borrower in accordance with the Act.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

-161-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

APP PHARMACEUTICALS, LLC, as the U.S. Borrower
By:	/s/ Patrick Soon-Shiong
	Name:	Patrick Soon-Shiong
		Chief Executive Officer

ABRAXIS BIOSCIENCE MANUFACTURING LLC, as the P.R. Borrower
By:	/s/ Patrick Soon-Shiong
	Name:	Patrick Soon-Shiong
		Chief Executive Officer of APP Pharmaceuticals, LLC, the sole member

APP PHARMACEUTICALS, INC., as a Guarantor
By:	/s/ Patrick Soon-Shiong
	Name:	Patrick Soon-Shiong
	Title:	Chief Executive Officer

DEUTSCHE BANK AG NEW YORK BRANCH, as Administrative Agent, L/C Issuer and Swing Line Lender
By:	/s/ Carin Keegan
	Name:	Carin Keegan
	Title:	Vice President
By:	/s/ Scottye Lindsey
	Name:	Scottye Lindsey
	Title:	Director

DEUTSCHE BANK SECURITIES INC., as an Arranger
By:	/s/ Darren Campili
	Name:	Darren Campili
	Title:	Director
By:	/s/ Stephanie Perry
	Name:	Stephanie Perry
	Title:	Director

WACHOVIA CAPITAL MARKETS, LLC, as an Arranger
By:	/s/ Charles Edwards, III
	Name:	Charles Edwards, III
	Title:	Director

FIRST AMENDMENT TO CREDIT AGREEMENT

FIRST AMENDMENT TO CREDIT AGREEMENT (this “First Amendment”), dated as of December 13, 2007, among APP Pharmaceuticals, Inc., a Delaware corporation (“Holdings”), APP Pharmaceuticals, LLC, a Delaware limited liability company (the “U.S. Borrower”), Abraxis Bioscience Manufacturing, LLC (to be renamed APP Pharmaceuticals Manufacturing, LLC) a Puerto Rico limited liability company (the “P.R. Borrower” and together with the U.S. Borrower, the “Borrowers”), Deutsche Bank AG New York Branch, as Administrative Agent, Swing Line Lender and an L/C Issuer, certain lenders party to the Credit Agreement (collectively, the “Lenders” and individually, each a “Lender”), and Deutsche Bank Securities Inc. and Wachovia Capital Markets, LLC, as Joint Lead Arrangers and Joint Bookrunners. Unless otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement referred to below are used herein as therein defined.

W I T N E S S E T H :

WHEREAS, Holdings, the U.S. Borrower, the P.R. Borrower, various Lenders, the Administrative Agent and certain other Agents have entered into a Credit Agreement, dated as of November 13, 2007 (as amended, modified and/or supplemented to, but not including, the date hereof, the “Credit Agreement”);

WHEREAS, subject to the terms and conditions of this First Amendment, the parties hereto wish to amend certain provisions of, and enter into certain agreements with respect to, the Credit Agreement, in each case as herein provided;

NOW, THEREFORE, it is agreed;

A. Amendments to the Credit Agreement.

1. The “Preliminary Statements” to the Credit Agreement are hereby amended by deleting the second paragraph thereof in its entirety and inserting in lieu thereof the following new paragraph:

“The Borrowers have requested that simultaneously with the consummation of the Spin-off, the Lenders extend credit to the Borrowers in the form of (i) term loans to the U.S. Borrower in an aggregate principal amount of $965,000,000, (ii) term loans to the P.R. Borrower in an aggregate principal amount of $35,000,000 and (iii) a revolving credit facility to the U.S. Borrower in an aggregate principal amount of $150,000,000.”

2. The definition of “Applicable Rate” appearing in Section 1 of the Credit Agreement is hereby amended by deleting the existing text thereof in its entirety and inserting in lieu thereof the following new text:

““Applicable Rate” means a percentage per annum equal to, with respect to (w) U.S. Tranche B Term Loans maintained as (A) Eurocurrency Rate Loans, 2.50%

(or, on and after the date of the most recent Incremental Facility Closing Date in respect of any Incremental Term Loans bearing interest utilizing the Applicable Increased Term Loan Rate, the Applicable Increased Term Loan Rate for such Incremental Term Loans) and (B) Base Rate Loans, 1.50% (or, on and after the date of the most recent Incremental Facility Closing Date in respect of any Incremental Term Loans bearing interest utilizing the Applicable Increased Term Loan Rate, the Applicable Increased Term Loan Rate for such Incremental Term Loans), (x) U.S. Tranche A Term Loans, P.R. Term Loans, Revolving Credit Loans and Letter of Credit fees, (i) until delivery of financial statements for the first full fiscal quarter ending after the Closing Date pursuant to Section 6.01, (A) for U.S. Tranche A Term Loans, P.R. Term Loans and Revolving Credit Loans maintained as Eurocurrency Rate Loans, 2.25% (or, on and after the date of the most recent Incremental Facility Closing Date in respect of any Incremental Term Loans bearing interest utilizing the Applicable Increased Term Loan Rate, the Applicable Increased Term Loan Rate for such Incremental Term Loans), (B) for U.S. Tranche A Term Loans, P.R. Term Loans and Revolving Credit Loans maintained as Base Rate Loans, 1.25% (or, on and after the date of the most recent Incremental Facility Closing Date in respect of any Incremental Term Loans bearing interest utilizing the Applicable Increased Term Loan Rate, the Applicable Increased Term Loan Rate for such Incremental Term Loans) and (C) for Letter of Credit fees, 2.125% and (ii) thereafter, the percentages per annum set forth in the table below applicable to the respective Type of U.S. Tranche A Term Loans or P.R. Term Loans (or, on and after the date of the most recent Incremental Facility Closing Date in respect of any Incremental Term Loans bearing interest utilizing the Applicable Increased Term Loan Rate, the Applicable Increased Term Loan Rate for such Incremental Term Loans) or Revolving Credit Loans or Letter of Credit fees, as the case may be, based upon the Total Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(b):

Pricing Level	Total Leverage Ratio	Applicable Rate for U.S. Tranche A Term Loans, P.R. Term Loans, and Revolving Credit Loans maintained as Eurocurrency Rate Loans		Applicable Rate for U.S. Tranche A Term Loans, P.R. Term Loans and Revolving Credit Loans maintained as Base Rate Loans		Applicable Rate for Letter of Credit Fees
1	Less than 2.00:1.00	1.75	%	0.75	%	1.625	%
2	Greater than or equal to 2.00:1.00, but less than 3.00:1.00	2.00	%	1.00	%	1.875	%
3	Greater than or equal to 3.00:1.00	2.25	%	1.25	%	2.125	%

(y) unused Revolving Credit Commitments, 0.375% and (z) any Type of Incremental Term Loan of a given Tranche that is not a U.S. Tranche A Term Loan or a U.S. Tranche B Term Loan, that percentage per annum set forth in, or calculated in accordance with, Section 2.14 and the respective Incremental Amendment (or, on and after the date of the

-2-

most recent Incremental Facility Closing Date in respect of any Incremental Term Loans bearing interest utilizing the Applicable Increased Term Loan Rate, the Applicable Increased Term Loan Rate for such Incremental Term Loans).

Any increase or decrease in the Applicable Rate resulting from a change in the Total Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b); provided that at the option of the Administrative Agent or the Required Lenders, the highest Pricing Level shall apply (x) as of the first Business Day after the date on which a Compliance Certificate was required to have been delivered but was not delivered, and shall continue to so apply to and including the date on which such Compliance Certificate is so delivered (and thereafter the Pricing Level otherwise determined in accordance with this definition shall apply) and (y) as of the first Business Day after an Event of Default under Section 8.01(a) shall have occurred and be continuing, and shall continue to so apply to but excluding the date on which such Event of Default is cured or waived (and thereafter the Pricing Level otherwise determined in accordance with this definition shall apply).

Notwithstanding anything to the contrary contained above in the definition or elsewhere in this Agreement, if it is subsequently determined that the Total Leverage Ratio set forth in any Compliance Certificate delivered to the Administrative Agent is inaccurate for any reason and the result thereof is that the Lenders received interest or fees for any period based on an Applicable Rate that is less than that which would have been applicable had the Total Leverage Ratio been accurately determined, then, for all purposes of this Agreement, the “Applicable Rate” for any day occurring within the period covered by such Compliance Certificate shall retroactively be deemed to be the relevant percentage as based upon the accurately determined Total Leverage Ratio for such period, and any shortfall in the interest or fees theretofore paid by any Borrower for the relevant period pursuant to Sections 2.08 and 2.09 as a result of the miscalculation of the Total Leverage Ratio shall be deemed to be (and shall be) due and payable as of (i) the date on which the Administrative Agent notified the U.S. Borrower of such inaccuracy or (ii) if such inaccuracy was caused by willful misconduct or gross negligence by the U.S. Borrower, at the time the interest or fees for such period were required to be paid pursuant to Section 2.08 or 2.09 (and shall remain due and payable until paid in full, together with all amounts owing under Section 2.08, in accordance with the terms of this Agreement).”

3. The definition “Available Amount” appearing in Section 1 of the Credit Agreement is hereby amended by deleting the text “this clause (i)” appearing therein and inserting the text “this clause (ii)” in lieu thereof.

4. The definition “U.S. Tranche A Term Commitment” appearing in Section 1 of the Credit Agreement is hereby amended by deleting the last sentence of such definition in its entirety.

5. The definition “U.S. Tranche B Term Commitment” appearing in Section 1 of the Credit Agreement is hereby amended by deleting the last sentence of such definition in its entirety.

-3-

6. Section 2.04(a) of the Credit Agreement is hereby amended by deleting the first proviso contained therein in its entirety and replacing it with the following text:

“provided that, (i) except as otherwise provided above in this clause (a) after giving effect to any Swing Line Loan, in no event shall the aggregate Outstanding Amount of the Revolving Credit Loans of any Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus such Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans exceed such Lender’s Revolving Credit Commitment then in effect and (ii) notwithstanding the foregoing, the Swing Line Lender shall not be obligated to make any Swing Line Loans at a time when any Revolving Credit Lender is a Defaulting Lender, unless the Swing Line Lender has entered into arrangements reasonably satisfactory to it and the U.S. Borrower to eliminate the Swing Line Lender’s risk with respect to such Defaulting Lender’s participation in such Swing Line Loans, including by cash collateralizing such Defaulting Lender’s or Defaulting Lenders’ Pro Rata Share of the outstanding Swing Line Loans;”

7. Section 2.05(b) of the Credit Agreement is hereby amended by (i) inserting the text “(A)” immediately after the text “(ii)” at the beginning of the second paragraph thereof and (ii) deleting the text “(A)” at the beginning of the third paragraph thereof and inserting in lieu thereof the text “(B)”.

8. Section 2.07(a) of the Credit Agreement is hereby amended by deleting said Section in its entirety and replacing it with the following text:

“(a) U.S. Tranche A Term Loans. On each date set forth below, the U.S. Borrower shall repay to the Administrative Agent for the ratable account of the U.S. Tranche A Term Lenders that principal amount of U.S. Tranche A Term Loans, to the extent then outstanding (after giving effect to reductions as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.05), as is set forth opposite each such date below:

U.S. Tranche A Term Loan Repayment Date	Amount
March 31, 2009	$	2,906,250
June 30, 2009	$	2,906,250
September 30, 2009	$	2,906,250
December 31, 2009	$	2,906,250
March 31, 2010	$	11,625,000
June 30, 2010	$	11,625,000
September 30, 2010	$	11,625,000
December 31, 2010	$	11,625,000
March 31, 2011	$	17,437,500
June 30, 2011	$	17,437,500
September 30, 2011	$	17,437,500

-4-

U.S. Tranche A Term Loan Repayment Date	Amount
December 31, 2011	$	17,437,500
March 31, 2012	$	23,250,000
June 30, 2012	$	23,250,000
September 30, 2012	$	23,250,000
December 31, 2012	$	23,250,000
March 31, 2013	$	61,031,250
June 30, 2013	$	61,031,250
September 30, 2013	$	61,031,250
Maturity Date for U.S. Tranche A Term Loans	$	61,031,250”

9. Section 2.07(b) of the Credit Agreement is hereby amended by deleting said Section in its entirety and replacing it with the following text:

“(b) U.S. Tranche B Term Loans. On each date set forth below, the U.S. Borrower shall repay to the Administrative Agent for the ratable account of the U.S. Tranche B Term Lenders that principal amount of U.S. Tranche B Term Loans, to the extent then outstanding (after giving effect to reductions as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.05), as is set forth opposite each such date below:

U.S. Tranche B Term Loan Repayment Date	Amount
March 31, 2008	$	1,250,000
June 30, 2008	$	1,250,000
September 30, 2008	$	1,250,000
December 31, 2008	$	1,250,000
March 31, 2009	$	1,250,000
June 30, 2009	$	1,250,000
September 30, 2009	$	1,250,000
December 31, 2009	$	1,250,000
March 31, 2010	$	1,250,000
June 30, 2010	$	1,250,000
September 30, 2010	$	1,250,000
December 31, 2010	$	1,250,000
March 31, 2011	$	1,250,000

-5-

U.S. Tranche B Term Loan Repayment Date	Amount
June 30, 2011	$	1,250,000
September 30, 2011	$	1,250,000
December 31, 2011	$	1,250,000
March 31, 2012	$	1,250,000
June 30, 2012	$	1,250,000
September 30, 2012	$	1,250,000
December 31, 2012	$	1,250,000
March 31, 2013	$	1,250,000
June 30, 2013	$	1,250,000
September 30, 2013	$	1,250,000
Maturity Date for U.S. Tranche B Term Loans	$	471,250,000”

10. Section 2.07(c) of the Credit Agreement is hereby amended by deleting said Section in its entirety and replacing it with the following text:

“(c) P.R. Term Loans. On each date set forth below, the P.R. Borrower shall repay to the Administrative Agent for the ratable account of the P.R. Term Lenders that principal amount of P.R. Term Loans, to the extent then outstanding (after giving effect to reductions as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.05), as is set forth opposite each such date below:

P.R. Term Loan Repayment Date	Amount
March 31, 2009	$	218,750
June 30, 2009	$	218,750
September 30, 2009	$	218,750
December 31, 2009	$	218,750
March 31, 2010	$	875,000
June 30, 2010	$	875,000
September 30, 2010	$	875,000
December 31, 2010	$	875,000
March 31, 2011	$	1,312,500
June 30, 2011	$	1,312,500
September 30, 2011	$	1,312,500
December 31, 2011	$	1,312,500
March 31, 2012	$	1,750,000

-6-

P.R. Term Loan Repayment Date	Amount
June 30, 2012	$	1,750,000
September 30, 2012	$	1,750,000
December 31, 2012	$	1,750,000
March 31, 2013	$	4,593,750
June 30, 2013	$	4,593,750
September 30, 2013	$	4,593,750
Maturity Date for P.R. Term Loans	$	4,593,750”

11. Section 4.01(a) of the Credit Agreement is hereby amended by deleting the text “within sixty (60) days after the Closing Date” appearing at the end thereof and inserting the text “within seventy-five (75) days after the Closing Date (or such later date as may be agreed to by the Administrative Agent)” in lieu thereof.

12. Section 6.13(b) of the Credit Agreement is hereby amended by deleting the text “within sixty (60) days of the Closing Date in the case of real property described in Schedule 1.01A” appearing therein and inserting the text “within seventy-five (75) days of the Closing Date (or such later date as may be agreed to by the Administrative Agent) in the case of real property described in Schedule 1.01A” in lieu thereof.

B. Conversion of $100M of U.S. Tranche A Term Loans to U.S. Tranche B Term Loans.

1. The Lenders (as defined below) hereby agree to convert $100,000,000 of U.S. Tranche A Term Loans to U.S. Tranche B Term Loans under the Credit Agreement (such new U.S. Tranche B Term Loans, the “New U.S. Tranche B Term Loans”). Such conversion shall apply to convert each U.S. Tranche A Term Lenders outstanding U.S. Tranche A Term Loans ratably (its “Ratable Share”) based on the relative outstanding amounts of each U.S. Tranche A Term Loans held by each U.S. Tranche A Term Lender.

2. On the First Amendment Effective Date, $100,000,000 of outstanding U.S. Tranche A Term Loans shall be converted, as described below, into New U.S. Tranche B Term Loans having the following terms: (i) the borrower of the New U.S. Tranche B Term Loans shall be the U.S. Borrower, (ii) the aggregate principal amount of the New U.S. Tranche B Term Loans on the First Amendment Effective Date shall equal $100,000,000, (iii) after giving effect to this First Amendment, all terms applicable to the New U.S. Tranche B Term Loans (including, without limitation, maturity) shall be the same as those that theretofore applied to the U.S. Tranche B Term Loans under the Credit Agreement; and (iv) such New U.S. Tranche B Term Loans shall for all purposes of the Credit Agreement be referred to as (and constitute) U.S. Tranche B Term Loans, with all provisions of the Credit Agreement and related Loan Documents applicable to U.S. Tranche B Term Loans to fully apply to said New U.S. Tranche B Term Loans (which shall thereafter be called (and constitute) U.S. Tranche B Term Loans under the Credit Agreement and for purposes of the Loan Documents).

-7-

3. On the First Amendment Effective Date, each U.S. Tranche A Term Lender hereby agrees to convert its Ratable Share of the outstanding U.S. Tranche B Term Loans into New U.S. Tranche B Term Loans as provided above in this Part B.

4. All Interest Periods applicable to U.S. Tranche B Term Loans shall continue in effect after the First Amendment Effective Date and such Interest Periods shall also apply pro ratably to the New U.S. Tranche B Term Loans made on the First Amendment Effective Date (until such Interest Periods expire, at which time subsequent Interest Periods shall be determined in accordance with the provisions of Section 2.02 of the Credit Agreement). The New U.S. Tranche B Term Loans of the various Lenders shall be allocated pro ratably to such Interest Periods (based upon the relative principal amounts subject thereto immediately prior to the First Amendment Effective Date), with the effect being that the existing U.S. Tranche B Term Loans shall continue to be subject to the same Interest Periods and the New U.S. Tranche B Term Loans converted on the First Amendment Effective Date shall be ratably allocated to the various Interest Periods as described above.

5. The U.S. Borrower hereby agrees that, upon request to the Administrative Agent by any Lender made on or prior to the First Amendment Effective Date, in order to evidence such Lender’s New U.S. Tranche B Term Loans hereunder, the U.S. Borrower will execute and deliver to such Lender a U.S. Tranche B Term Note, with appropriate insertions therein as to payee, date and principal amount, payable to the order of such Lender and in a principal amount equal to the unpaid principal amount of the New U.S. Tranche B Term Loans held by such Lender. Each such U.S. Tranche B Term Note evidencing a New U.S. Tranche B Term Loan shall (x) be dated the First Amendment Effective Date, (y) be payable as provided in Section 2.07 of the Credit Agreement and (z) provide for the payment of interest in accordance with Section 2.08 of the Credit Agreement.

C. Miscellaneous Provisions.

1. In order to induce the Lenders to enter into this First Amendment, each of Holdings and each of the Borrowers hereby represents and warrants to each of the Lenders that:

(i) all of the representations and warranties contained in the Credit Agreement are true and correct in all material respects on and as of the First Amendment Effective Date, both before and after giving effect to this First Amendment, with the same effect as though such representations and warranties had been made on and as of the First Amendment Effective Date (unless such representations and warranties relate to a specific earlier date, in which case such representations and warranties shall be true and correct as of such earlier date); and

(ii) there exists no Default or Event of Default on the First Amendment Effective Date, both before and after giving effect to this First Amendment.

2. This First Amendment is limited as specified and shall not constitute a modification, acceptance or waiver of any other provision of the Credit Agreement.

3. This First Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and

-8-

delivered shall be an original, but all of which shall together constitute one and the same instrument. A complete set of counterparts executed by all the parties hereto shall be lodged with the U.S. Borrower and the Administrative Agent.

4. THIS FIRST AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

5. This First Amendment shall become effective on the date (the “First Amendment Effective Date”) when Holdings, the U.S. Borrower, the P.R. Borrower, each Lender, the Administrative Agent, and the Collateral Agent shall have each signed a counterpart hereof (whether the same or different counterparts) and shall have delivered (including by way of facsimile transmission) the same to White & Case LLP, 1155 Avenue of the Americas, New York, NY 10036 Attention: Aliza Feldman (facsimile number 212-354-8113; e-mail address: afeldman@whitecase.com).

6. From and after the First Amendment Effective Date, all references in the Credit Agreement and each of the other Loan Documents to the Credit Agreement shall be deemed to be references to the Credit Agreement, as modified hereby on the First Amendment Effective Date.

-9-

IN WITNESS WHEREOF, the undersigned have caused this First Amendment to be duly executed and delivered as of the date first above written.

APP PHARMACEUTICALS, INC.
By:	/s/ Lisa Gopala
	Name: Lisa Gopala
	Title: EVP and CFO
APP PHARMACEUTICALS, LLC
By:	/s/ Lisa Gopala
	Name: Lisa Gopala
	Title: EVP and CFO
ABRAXIS BIOSCIENCE MANUFACTURING, LLC (to be renamed APP PHARMACEUTICALS MANUFACTURING, LLC)
By:	Lisa Gopala
	Name: Lisa Gopala
	Title: EVP and CFO

DEUTSCHE BANK AG NEW YORK BRANCH, Individually, as Administrative Agent as Swing Line Lender and as an L/C Issuer
By:	/s/ Carin Keegan
	Name: Carin Keegan
	Title: Vice President
By:	/s/ Evelyn Thierry
	Name: Evelyn Thierry
	Title: Vice President
DEUTSCHE BANK SECURITIES INC., as Joint Lead Arranger
By:	/s/ William Frauen
	Name: William Frauen
	Title: MD
By:	/s/ Michael Busam
	Name: Michael Busam
	Title: VP

WACHOVIA CAPITAL MARKETS, LLC, as Joint Lead Arranger
By:	/s/ Charles Edwards, III
	Name: Charles Edwards, III
	Title: Director
WACHOVIA BANK NATIONAL ASSOCIATION
By:	/s/ Charles Edwards, III
	Name: Charles Edwards, III
	Title: Director

EX-21.1

Exhibit 21.1

APP Pharmaceuticals, Inc.

List of Subsidiaries

The following is a list of subsidiaries of APP Pharmaceuticals, Inc. as of December 31, 2007.

Name	Where Incorporated
APP Pharmaceuticals, LLC	Delaware
Pharmaceuticals Partners of Canada, Inc.	Ontario, Canada
APP Pharmaceuticals Manufacturing, LLC	Puerto Rico

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements (Form S-8 Nos. 333-75606, 333-141034, 333-84280, 333-103894) of APP Pharmaceuticals, Inc. of our reports dated March 17, 2008, with respect to the consolidated financial statements and schedule of APP Pharmaceuticals, Inc. and the effectiveness of internal control over financial reporting of APP Pharmaceuticals, Inc. incorporated by reference in this Annual Report (Form 10-K) for the year ended December 31, 2007.

/s/ Ernst & Young, LLP

Chicago, Illinois

March 17, 2008

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Patrick Soon-Shiong, certify that:

1. I have reviewed this annual report on Form 10-K for the year ended December 31, 2007 (this “report”) of Abraxis BioScience, Inc. (“registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial data information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 17, 2008

/s/    PATRICK SOON-SHIONG, M.D.        

Patrick Soon-Shiong, M.D.

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Lisa Gopalakrishnan, certify that:

1. I have reviewed this annual report on Form 10-K for the year ended December 31, 2007 (this “report”) of Abraxis BioScience, Inc. (“registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial data information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 17, 2008

/s/    LISA GOPALAKRISHNAN        

Lisa Gopalakrishnan

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

In connection with the periodic report of Abraxis BioScience, Inc. (the “Company”) on Form 10-K for the year ending December 31, 2007 as filed with the Securities and Exchange Commission (the “Report”), I, Patrick Soon-Shiong, Chief Executive Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

Date: March 17, 2008	/s/    PATRICK SOON-SHIONG, M.D.
	Patrick Soon-Shiong, M.D.
	Chief Executive Officer

This certification accompanies this Report on Form 10-K pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

EX-32.2

Exhibit 32.2

CERTIFICATION

In connection with the periodic report of Abraxis BioScience, Inc. (the “Company”) on Form 10-K for the year ending December 31, 2007 as filed with the Securities and Exchange Commission (the “Report”), I, Lisa Gopalakrishnan, Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

Date: March 17, 2008	/s/    LISA GOPALAKRISHNAN
	Lisa Gopalakrishnan
	Chief Financial Officer

This certification accompanies this Report on Form 10-K pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.