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Sample Business Contracts

Pledge Agreement - American BIoScience Inc. and American Pharmaceutical Partners Inc.

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                               PLEDGE AGREEMENT

          THIS PLEDGE AGREEMENT (this "Agreement") dated as of November 20,
                                       ---------
2001, is made by AMERICAN BIOSCIENCE, INC., a California corporation, (the
"Pledgor"), in favor of AMERICAN PHARMACEUTICAL PARTNERS, INC., a California
 -------
corporation (the "Company").
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                                   RECITALS
                                   --------

          A.   Pledgor has previously executed in favor of the Company an
Amended and Restated Intercompany Demand Promissory Note, dated as of October
21, 2001, reflecting that the Company has loaned to Pledgor an aggregate of up
to $23,000,000 through the date hereof, and Pledgor and Company contemplate that
additional amounts may be similarly advanced in the future (all sums so loaned,
in the aggregate, the "Note").
                       ----

          B.   In exchange for the Company not demanding repayment of the Note
as of the date hereof, Pledgor has agreed to enter into this Agreement.

                                   AGREEMENT
                                   ---------

          NOW, THEREFORE, in consideration of the premises the Pledgor hereby
agrees with the Company as follows:

          SECTION 1.  Pledge. The Pledgor hereby pledges to the Company, and
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grants to the Company a security interest in shares of APP common stock having a
fair market value equal to 120% of the Note, as outstanding from time to time
(the "Pledged Collateral"); provided, however, such pledge shall be effective
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only within three business days of written notice by APP, which notice shall
only be given after the effective date of the initial public offering of APP's
common stock that is registered un the Securities Act of 1933, as amended ("APP
IPO"). For purposes of this section, "fair market value" of APP common stock
shall mean the average reported closing prices for the five days preceding the
written notice by APP.

          SECTION 2.  Security for Obligations. This Agreement secures the
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payment of all obligations of the Pledgor now or hereafter existing under the
Note or all obligations of the Pledgor now or hereafter existing under this
Agreement (collectively, the "Pledgor Obligations").
                              -------------------

          SECTION 3.  Delivery of Pledged Collateral. Within three business days
                      ------------------------------
of written notice by APP, all certificates or instruments representing or
evidencing the Pledged Collateral shall be delivered to and held by or on behalf
of the Company pursuant hereto and shall be in suitable form for transfer. The
Company shall have the right, at any time after the Pledgor shall have failed to
fully perform or pay any of the Pledgor Obligations (a "Default") and such
                                                        -------
Default shall be continuing, to transfer to or to register in the name of the
Company or any of its nominees any or all of the Pledged Collateral.

          SECTION 4.  Voting Rights.
                      -------------

               a.   So long as no Default shall have occurred and be continuing
the Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral or any part thereof for
any purpose not inconsistent with the terms of this Agreement.

               b.   Upon the occurrence and during the continuance of a Default;
all rights of the Pledgor to exercise the voting and other consensual rights
which it would otherwise be entitled to exercise

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pursuant to Section 4(a) shall cease, and all such rights shall there upon
become vested in the Company, which shall thereupon have the sole right to
exercise such voting and other consensual rights.

          SECTION 5.  Transfers and Other Liens. The Pledgor agrees that it will
                      -------------------------
not (i) sell or otherwise dispose of, or grant any option with respect to, any
of the Pledged Collateral owned by it, or (ii) create or permit to exist any
Lien upon or with respect to any such Pledged Collateral, except for the
security interest under this Agreement.

          SECTION 6.  Company Appointed Attorney-in-Fact. The Pledgor hereby
                      ----------------------------------
appoints the Company as its attorney-in-fact, with full authority in the place
and stead of the Pledgor and in the name of the Pledgor or otherwise, at any
time, upon the occurrence and during the continuance of any Default, to take any
action and to execute any instrument which the Company may deem necessary or
advisable to accomplish the purposes of this Agreement.

          SECTION 7.  Company May Perform. If the Pledgor fails to perform any
                      -------------------
agreement contained herein, the Company may itself perform, or cause performance
of, such agreement.

          SECTION 8.  Remedies upon Default. If any Default shall have occurred
                      ---------------------
and be continuing the Company may exercise in respect of the Pledged Collateral,
in addition to other rights and remedies provided for herein or otherwise
available to it under applicable law, all the rights of a secured party on
default under the California Uniform Commercial Code in effect at that time, and
the Company may also sell the Pledged Collateral or any part thereof in one or
more parcels at public or private sale, at any exchange, broker's board or at
any of the Company's offices or elsewhere, for cash.

          SECTION 9.  Expenses. The Pledgor will upon demand pay to the Company
                      --------
the amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which the Company may
incur in connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Company hereunder or (iv) the failure by
the Pledgor to perform or observe any of the provisions hereof.

          SECTION 10. Security Interest Absolute. All rights of the Company and
                      --------------------------
security interests hereunder, and all obligations of the Pledgor hereunder,
shall be absolute and unconditional irrespective of any lack of validity or
enforceability of the Note; any change in the time, manner or place of payment
of, or in any other term of, the principal amount under the Note or any other
amendment or waiver of or any consent to any departure from the Note; any
exchange, release or non-perfection of any other collateral, or any release or
amendment or waiver of or consent to departure from any guaranty, for any of the
Pledgor Obligations; or any other circumstances which might otherwise constitute
a defense available to, or a discharge of, the Pledgor.

          SECTION 11. Amendments, Etc. No amendment or waiver of any provision
                      ----------------
of this Agreement nor consent to any departure by the Pledgor herefrom shall be
effective unless the same shall be in writing and signed by the Company, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.

          SECTION 12. Addresses for Notices. All notices and other
                      ---------------------
communications provided for hereunder shall be in writing (including facsimile
communication) and mailed, teletransmitted or delivered to it, addressed to the
Pledgor or the Company in the manner and at its respective address specified in
Section 13(b) of the Stock Agreement.

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          SECTION 13. Continuing Security Interest; Transfer of Note. This
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Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) remain in full force and effect until performance or payment in
full of the Pledgor Obligations, (ii) be binding upon the Pledgor, its
successors and assigns, and (iii) inure, together with the rights and remedies
of the Company hereunder, to the benefit of the Company and its successors,
transferees and assigns (including assignees of the Note).

          SECTION 14. Governing Law; Terms. This Agreement shall be governed by,
                      --------------------
and construed in accordance with, the laws of the State of California, except to
the extent that the validity or perfection of the security interest hereunder,
or remedies hereunder, in respect of any particular Pledged Collateral are
governed by the laws of a jurisdiction other than the State of California.
Unless otherwise defined herein or in the Note, terms defined in Divisions 8 and
9 of the California Uniform Commercial Code are used herein as therein defined.

     IN WITNESS WHEREOF, the Pledgor and the Company have caused this Agreement
to be duly executed and delivered by as of the date first above written.


                                   AMERICAN BIOSCIENCE, INC.


                                   By: /s/ Patrick Soon-Shiong
                                      ----------------------------
                                      President



                                   AMERICAN PHARMACEUTICAL PARTNERS, INC.


                                   By: /s/ Jeffrey M. Yordon
                                      ----------------------------
                                      Chief Operating Officer

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