Transitional Services Agreement

CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.


TRANSITIONAL SERVICES AGREEMENT


TRANSITIONAL SERVICES AGREEMENT ("Agreement"), dated as of the 31st day of July, 2001 ("Effective Date"), by and among BECTON, DICKINSON AND COMPANY, a New Jersey corporation ("BD"), TRIPATH IMAGING, INC., a Delaware corporation ("TriPath"), and TriPath Oncology, Inc., a Delaware corporation ("Newco").


WITNESSETH:


WHEREAS, pursuant to the Development and License Agreement (the "Development Agreement"), dated as of the date hereof, by and among BD, TriPath and Newco, Newco has agreed, among other things, to perform certain research and development obligations of BD under that certain Collaboration and License Agreement, dated as of February 21, 1999, as amended, by and between BD and Millenium Pharmaceuticals, Inc., as successor to Millennium Predictive Medicine, Inc. (the "R&D Activities"); and


WHEREAS, in order to enable Newco to perform the R&D Activities, Newco wishes to use certain facilities of BD at its building located at 54 Loveton Circle, Sparks, Maryland (the "Building"), and has requested that BD provide certain other services, for the transitional period described herein; and


WHEREAS, BD is willing to provide access to such facilities and provide such services during said period; and


WHEREAS, it is a condition to the effectiveness of the Development Agreement that the parties hereto execute and deliver this Agreement;


NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto hereby agree as follows:


1. Use of Facilities.


1.1 Facilities. (a) BD hereby represents that it owns the Building and has the corporate power to give Newco the right to occupy and use the Facilities and Common Areas (as such terms are defined herein) as described herein. BD further represents that the Facilities meet all FDA GLP and GMP standards and are appropriately equipped and otherwise in a condition reasonably adequate to enable Newco to perform the R&D Activities as currently conducted by the BD Gene business of BD ("BD Gene"). During the Term (as defined herein), BD shall provide Newco with (i) the use of the laboratory, office and cubicle space (the "Facilities") described in Exhibit A attached hereto and the FF&E (as defined herein), and including, without limitation, access (to the extent permitted by BD's agreements with third parties) to all books, journals, market reports, software and other documents and information 2


purchased for or used by BD's molecular oncology effort, access to all laboratory notebooks currently assigned to BD Gene or otherwise attributable to BD's oncology effort, access to all electronic files of all current and (to the extent existing on the date hereof) former BD Gene employees, access to and use of the BD PACE and Quality Systems; and (ii) those support services (the "Services") described in Exhibit B attached hereto. Newco shall use the Facilities for the sole purpose of performing its R&D Activities under the Development Agreement. BD shall, [*****] FDA GLP and GMP standards at all times during the term of this Agreement. As used herein, "FF&E" shall mean [*****].


(b) BD hereby represents and warrants that it owns and has good title to the FF&E, free and clear of all claims, liens, security interests or other encumbrances (except for such encumbrances which would not, individually or in the aggregate, adversely impact Newco's use of the assets). BD hereby agrees during the Term of this Agreement: (i) to maintain good title to the FF&E and not to sell or otherwise dispose of such FF&E (except as part of a capital replacement), and (ii) not to create, incur or permit any claims, liens, security interests or other encumbrances whatsoever with respect to such assets (except for such encumbrances which would not, individually or in the aggregate, adversely impact Newco's use of the assets).


(c) BD and Newco acknowledge that the Facilities occupy only a small portion of the Building and that BD occupies and uses the remaining portions of the Building for its own laboratory, research and other purposes. Accordingly, BD agrees that it will use the Building, and Newco agrees that it will use the Facilities and Common Areas (as defined below), in such manner as to prevent and/or minimize any interference to the laboratory, research and other activities of the other party to the extent reasonably practicable and will take reasonable steps to prevent any unauthorized access to the Facilities or other parts of the Building, as applicable, by its Affiliates (as defined herein) in light of the reasonable business security and confidentiality needs of the other party. BD shall have the right from time to time, exercisable upon prior written notice reasonable under the circumstances and at BD's expense, to relocate Newco to other facilities located in the Building, provided such substitute facilities are reasonably similar in size, quality and utility at the time of the move.


(d) Newco shall give BD reasonable advance notice of any invitee or visitor (other than a Newco or TriPath employee) of Newco to the Building. BD reserves the right to deny access to the Building to any of Newco's invitees or visitors if BD, in its discretion, determines that denial of access is needed to protect BD's business security and confidentiality needs. Newco shall maintain written records that indicate the name, company, date, time and purpose of visit for all invitees and visitors to the Facilities. Such visitor records shall be open to inspection by BD during all regular business hours and Newco shall, upon demand therefor by BD from time to time, provide BD with copies of all such records.


1.2. Common Areas. During the Term, Newco shall also have the right to use, in common with BD and others entitled to use them, the Common Areas. For purposes of this Agreement, "Common Areas" shall mean the cafeteria, library, meeting rooms, videoconference rooms, rest rooms, hallways, cold room, dark room, radiation lab, autoclave, glassware room, lobby and stairwells, along with Building entrances, exits, sidewalks, and the parking area located immediately adjacent to the Building.


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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.


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1.3 Rules and Procedures; Access by BD. (a) Newco agrees to fully comply, and to cause all Newco Affiliates to fully comply, with all current policies and procedures of which BD has given Newco written notice, and such other policies and procedures as BD may from time to time establish and provide Newco with written notice thereof, relating to the Building, Facilities and Common Areas. BD shall have the right, exercisable upon prior notice reasonable under the circumstances (except in emergencies, in which case no notice shall be required), to temporarily bar Newco's access and that of its Affiliates (as herein defined) to the Building, Facilities and/or Common Areas for health and safety reasons or under emergency conditions, and to otherwise operate, maintain and perform such other acts in and to the Building, Facilities and Common Areas in such a manner as BD shall reasonably determine from time to time.


(b) BD and its agents and representatives shall have the right to enter into and upon any part of the Facilities at all reasonable hours upon reasonable prior notice to Newco (and in emergencies, or when required by government regulatory inspectors, at all times without the requirement for any prior notice) to inspect the same and to make repairs to the Facilities, and Newco shall not be entitled to any reduction in any amount due hereunder by reason thereof. BD agrees that in exercising its access right hereunder, BD shall be subject to and shall comply with all reasonable requests of Newco with respect to Newco's business safety, security and confidentiality needs; and except in emergencies, any such entry shall be accompanied by a representative of Newco; in addition, any such entry shall be exercised in such a manner so as to minimize any disruption to Newco's business to the extent reasonably practicable, and BD shall restore any damage to the Facilities occasioned by such entry.


1.4. Alterations and Repairs. Newco shall not alter, make any improvements to or add any fixtures at the Facilities or any other part of the Building without the prior written consent of BD. Newco shall, at its expense, service, keep, and maintain all the FF&E in good order, repair and condition, ordinary wear and tear excepted. Notwithstanding the foregoing, in no event shall Newco have any obligation to make any capital repairs to, or replacements of, the FF&E to the extent due to ordinary wear and tear. Newco covenants and agrees to promptly reimburse BD for the cost to repair any damage (other than ordinary wear and tear) to the Facilities, Common Areas or any other area of the Building caused by Newco or Newco's Affiliates; provided that Newco shall only be obligated to reimburse for such repairs as are required to restore the Facilities, Common Areas and any other area of the Building to as good a condition as existed prior to such damage.


1.5. Casualty Damage; Condemnation. If during the Term, the Facilities, or any other portions of the Building or the Common Areas, are damaged or destroyed or lawfully taken or condemned for any public or quasi-public use or purpose, thereby rendering the Facilities unusable or inaccessible or otherwise materially adversely effecting Newco's ability to perform its obligations under the Development Agreement, then BD shall use reasonable efforts to relocate Newco to other comparable facilities in the Building to the extent possible. If relocation of Newco to other facilities in the Building is not reasonably possible, the parties agree to cooperate to find a mutually acceptable resolution. In the event the parties are unable to mutually agree on a resolution, Newco shall have the right to terminate this Agreement upon written notice to BD.


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1.6 Hazardous Substances. Except for necessary quantities of customary cleaning supplies used in cleaning and maintaining the Facilities, and for quantities used by Newco and related to the R&D Activities (collectively, "Permitted Quantities"), which Permitted Quantities shall be properly stored and used in strict accordance with all applicable Hazardous Substances laws and regulations and BD's then existing safety and environmental policies and procedures, Newco shall not generate, use, store, possess, transport or dispose of any Hazardous Substances in or about the Building without the express prior written consent of BD and compliance in a timely manner (at Newco's sole cost and expense) with all applicable laws and BD's then existing safety and environmental policies and procedures. Notwithstanding the foregoing, to the extent that Newco is involved in any activity involving Hazardous Substances which is merely a continuation of an activity currently conducted by BD, Newco shall not be required to obtain any consent in connection with such activity, and shall not be responsible for any cost or expense necessary to bring the Building into compliance with applicable laws or BD's safety and environmental policies and procedures with respect to such activity to the extent BD is not in compliance therewith on the date hereof. The term "Hazardous Substance" as used in this Agreement shall mean pollutant, contaminant, waste or chemical or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substance, waste or material, or any substance, waste or material having any constituent elements displaying any of the foregoing characteristics, including, without limitation, petroleum, its derivatives, by-products and other hydrocarbons, and any substance, waste or material regulated under any environmental law.


(b) Duty to Inform BD. If Newco knows, or has reasonable cause to believe, that a Hazardous Substance, or a condition involving or resulting from same, has been brought into or about the Building, other than as permitted hereunder or as previously consented to by BD, Newco shall immediately give written notice of such fact to BD.


(c) Indemnification by Newco and TriPath. Newco and TriPath, jointly and severally, shall indemnify, protect, defend and hold BD and its officers, directors, agents and employees, harmless from and against any and all damages, liabilities, judgments, costs, claims, liens, expenses, penalties, permits and reasonable attorney's fees arising out of or involving any Hazardous Substance brought into the Building by or for Newco or under Newco's control after the ...