Escrow Agreement

Exhibit 10.1


ESCROW AGREEMENT

This Escrow Agreement (this " Escrow Agreement" ), is dated as of , 2006, by and among American Pharmaceutical Partners, Inc., a Delaware corporation (the " Company" ), Dr. Patrick Soon-Shiong, solely in his capacity as " Shareholder Representative" (the " Shareholders' Representative" ), and , as escrow agent (" Escrow Agent" ).


The Company and American BioScience, Inc., a California corporation (" ABI" ), and the other parties signatory thereto are parties to an Agreement and Plan of Merger, dated as of November 27, 2005 (the " Merger Agreement" ), providing for, among other things, the merger of ABI with and into the Company (the " Merger" ) with the Company as the corporation surviving the Merger. In the Merger, the outstanding shares of common stock, par value $0.001 per share, of ABI, held by the shareholders of ABI are being converted into a right to receive shares of common stock, par value $0.001 per share, of the Company (" Company Common Stock" ). Capitalized terms used but not otherwise defined in this Escrow Agreement have the respective meanings given to them in the Merger Agreement. This is the Escrow Agreement contemplated by Section 3.1(f) of the Merger Agreement.

Pursuant to the Merger Agreement, the Company is depositing with the Escrow Agent a number of the shares of Company Common Stock otherwise deliverable pursuant to the Merger to the holders of the ABI Common Stock pursuant to the Merger that is equal to 10% of the New Share Number (the " Former Shareholders" ) for the purpose of providing a fund (the " Escrow Fund" ) to reimburse the Indemnified Parties for the payment of any Losses for which the Indemnified Parties are entitled to indemnification pursuant to the terms of Article IX of the Merger Agreement.

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:


1. Establishment of Escrow .


(a) Pursuant to the Merger Agreement, at the Effective Time, the Company shall, on behalf of the Former Shareholders, deposit with the Escrow Agent stock certificates representing a number of shares of Company Common Stock equal to 10% of the New Share Number to create the Escrow Fund.


(b) Unless and until delivered to the Company in accordance with the terms hereof, that number of shares of Company Common Stock in the Escrow Fund (and the certificates representing such shares) equal to each Former Shareholder' s Pro Rata Percentage of the shares of Company Common Stock in the Escrow Fund shall be registered in the name of such Former Shareholder. The name and address of each of the Former Shareholders and the intial number of shares of Company Common Stock included in the Escrow Fund to be registered in the name of such Former Shareholder are set forth on Schedule A hereto. Each Former Shareholder' s " Pro Rata Percentage" of the shares of Company Common Stock in the Escrow Fund shall be equal to (a) the

number of shares of Company Common Stock of such Former Shareholder initially included in the Escrow Fund as set forth on Schedule A hereto, divided by (b) the total number of shares of Company Common Stock of all Former Shareholders initially included in the Escrow Fund as set forth on Schedule A hereto.


(c) The parties hereby designate and appoint the Escrow Agent to serve in accordance with the terms, conditions and provisions of this Escrow Agreement, and Escrow Agent hereby agrees to act as escrow agent and to hold in trust, safeguard, invest and disburse the Escrow Fund, pursuant to the terms and conditions hereof.

(d) Cash, if any, or other securities (other than shares of Company Common Stock) paid, issued or distributed in respect of shares of Company Common Stock of a Former Shareholder in the Escrow Fund (as a result of a merger, consolidation, reclassification, recapitalization, dividend, distribution or otherwise) shall not be added to the Escrow Fund but shall be distributed to the Former Shareholder in whose name such Company Common Stock is registered

(e) Voting and granting consents with respect to any shares of Company Common Stock in the Escrow Fund shall be as determined by the Former Shareholder in whose name such shares are registered in such Former Shareholder' s absolute discretion, (provided that the foregoing shall not affect the obligation of the parties to the Governance Agreement to comply with their contractual obligations thereunder as to the voting of such shares).


(f) To the extent that any portion of the Escrow Fund constitutes cash, the Escrow Agent shall invest and reinvest such cash portion of the Escrow Fund at the joint written instructions of the Company and the Shareholders' Representative. In the absence of joint written directions from the Company and the Shareholders' Representative, any cash in the Escrow Fund shall be invested in a money market account of a U.S. bank.


(g) The Escrow Agent shall, upon receipt of a written instruction from a Former Shareholder (with a copy to the Company) and subject to documentation of the validity of such transfer reasonably acceptable to the Company, present to the transfer agent of the Company, to be reregistered in the name of another person the name and address of which is identified in such written instruction (the " Replacement Former Shareholder" ), all or a portion of such Former Shareholder' s shares of Company Common Stock included in the Escrow Fund as shall be set forth in such written instruction. From and after such reregistration, the Replacement Former Shareholder shall be treated as the Former Shareholder pursuant to the terms of this Agreement with respect to the shares of Common Stock reregistered in the name of the Replacement Former Shareholder.


2. Indemnification Claims .


(a) An Indemnification Claim for Losses to be paid from the Escrow Fund pursuant to Article IX of the Merger Agreement may be made only if the Company delivers to the Shareholders' Representative (with a copy to the Escrow Agent) by the deadline for submitting such an Indemnification Claim under the Merger Agreement (the


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" Indemnity Termination Date" ) a Claim Notice that sets forth in reasonable detail the specific facts and circumstances giving rise to such claim and a good faith estimate of the dollar amount of the Losses for which the Indemnified Party claims it is entitled to indemnification pursuant to the terms of the Merger Agreement (the " Indemnification Amount" ). If, within thirty (30) days following receipt by the Shareholders' Representative of a Claim Notice, the Shareholders' Representative gives notice (a " Counter Notice" ) to the Company (with a copy to the Escrow Agent) disputing the applicable Indemnified Party' s entitlement to indemnification with respect to the Indemnification Claim set forth in a Claim Notice or disputing the estimate set forth in such Claim Notice of the dollar amount of the Losses for which the Indemnified Party is entitled to indemnification pursuant to the terms of the Merger Agreement, the applicable Indemnified Party' s entitlement to indemnification with respect to the Indemnification Claim and the dollar amount of the Losses for which the Indemnified Party is entitled to indemnification pursuant to the terms of the Merger Agreement shall be resolved as provided in Section 2(c) below.


(b) If no Counter Notice is received by the Escrow Agent within such thirty (30) day period, then the Indemnification Amount claimed in the applicable Claim Notice shall be deemed established for purposes of this Escrow Agreement, and, at the end of such thirty (30) day period, the Escrow Agent shall promptly deliver to the Company from the Escrow Fund shares of Company Common Stock with a Market Value (as defined below) as of the date of the Claim Notice equal to the Indemnification Amount as claimed in the Claim Notice. The shares of Company Common Stock so delivered to the Company from the Escrow Fund shall be disbursed from the shares of Company Common Stock of the Former Shareholders included in the Escrow Fund proportionally in accordance with their respective Pro Rata Percentages. The " Market Value" of a share of Company Common Stock as of any day shall be equal to average of the Company Stock Prices over the ten consecutive NASDAQ trading days (or, if the Company Common Stock is not traded on the NASDAQ National Market, such number of trading days on any other exchange or market on which the Company Common Stock is then trading) ending on and including the second full trading day preceding such day.

(c) (i) If a Counter Notice is given by the Shareholders' Representative with respect to an Indemnification Claim, the Escrow Agent shall promptly (but in any event within two business days) disburse the appropriate number of shares of Company Common Stock from the Escrow Fund in respect of such Indemnification Claim only in accordance with (A) joint written instructions of the Company and the Shareholders' Representative, or (B) a final judgment with no further right to appeal, upon an award rendered by a court of competent jurisdiction.


(ii) If the Indemnified Party and the Shareholders' Representative are unable to resolve any dispute within thirty (30) days of the Shareholders' Representative' s delivery of a Counter Notice, such dispute shall be resolved in accordance with Section 10.9 of the Merger Agreement or by means of a settlement reached between Shareholders' Representative and the Company with respect to the applicable Indemnification Claim.


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(d) If the Shareholders' Representative and the Indemnified Party reach a settlement with respect to any Indemnification Claim made by the Company or if the number of shares of Company Common Stock to be disbursed in respect of an Indemnification Claim is determined through a judgment not subject to appeal as provided in Section 2(c), the Shareholders' Representative and the Company shall jointly deliver written notice of such settlement or judgement to the Escrow Agent, including (if applicable) instructions to the Escrow Agent to disburse the appropriate number of shares of Company Common Stock from the Escrow Fund to the Company, and the Escrow Agent shall act promptly in accordance with such instructions. The shares of Company Common Stock so disbursed to the Company from the Escrow Fund shall be disbursed proportionally from the shares of Company Common Stock of the Former Shareholders in acco ...