Exhibit 10.3

 

EXECUTION VERSION

 

PLEDGE AGREEMENT

 

THIS PLEDGE AGREEMENT dated as of March 30, 2016 (as amended, modified, restated
or supplemented from time to time, this “Pledge Agreement”) is by and among the
parties identified as “Pledgors” on the signature pages hereto and such other
parties as may become Pledgors hereunder after the date hereof (individually a
“Pledgor”, and collectively, the “Pledgors”) and Visium Healthcare Partners, LP,
as administrative agent (in such capacity, the “Administrative Agent”) for the
Secured Parties (defined below).

 

W I T N E S S E T H

 

WHEREAS, a credit facility has been established in favor of Veracyte, Inc., a
Delaware corporation (the “Borrower”), pursuant to the terms of that certain
Credit Agreement dated as of March 25, 2016 (as amended, modified, restated,
supplemented or extended from time to time, the “Credit Agreement”) among the
Borrower, the Guarantors from time to time party thereto, the Lenders from time
to time party thereto and the Administrative Agent;

 

WHEREAS, it is required under the terms of the Credit Agreement that the
Pledgors shall have granted, pledged and assigned the security interests and
undertaken the obligations contemplated by this Pledge Agreement; and

 

WHEREAS, this Pledge Agreement is required under the terms of the Credit
Agreement.

 

NOW, THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

1.                                      Definitions.

 

(a)                                 Capitalized terms used and not otherwise
defined herein shall have the meanings provided in the Credit Agreement.

 

(b)                                 As used herein, the following terms shall
have the meanings assigned thereto in the UCC (defined below): Accession,
Financial Asset, Investment Company Security, Proceeds and Security.

 

(c)                                  As used herein, the following terms shall
have the meanings set forth below:

 

“Administrative Agent” has the meaning provided in the introductory paragraph
hereof.

 

“Borrower” has the meaning provided in the recitals hereof.

 

“Credit Agreement” has the meaning provided in the recitals hereof.

 

“Non-Voting Equity” has the meaning provided in Section 2 hereof.

 

“Pledge Agreement” has the meaning provided in the introductory paragraph
hereof.

 

“Pledged Collateral” has the meaning provided in Section 2 hereof.

 

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“Pledged Shares” has the meaning provided in Section 2 hereof.

 

“Secured Obligations” means, without duplication, (a) all Obligations and
(b) all costs and expenses incurred in connection with enforcement and
collection of the Obligations, including the fees, charges and disbursements of
counsel.

 

“Secured Parties” means, collectively, the Administrative Agent, the Lenders and
any holder of the Secured Obligations and “Secured Party” means any one of them.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York, except as such term may be used in connection with the
perfection of the Pledged Collateral and then the applicable jurisdiction with
respect to such affected Pledged Collateral shall apply.

 

“Voting Equity” has the meaning provided in Section 2 hereof.

 

2.                                      Pledge and Grant of Security Interest. 
To secure the prompt payment and performance in full when due, whether by lapse
of time, acceleration, mandatory prepayment or otherwise, of the Secured
Obligations, each Pledgor hereby grants, pledges and assigns to the
Administrative Agent, for the benefit of the Secured Parties, a continuing
security interest in any and all right, title and interest of such Pledgor in
and to the following, whether now owned or existing or owned, acquired, or
arising hereafter (collectively, the “Pledged Collateral”):

 

(a)                                 Pledged Shares.  (i) One hundred percent
(100%) of the issued and outstanding Equity Interests of each Domestic
Subsidiary (other than a Foreign Subsidiary Holding Company) owned directly by
such Pledgor set forth on Schedule 2(a) attached hereto and (ii) sixty-five
percent (65%) (or such greater percentage that, due to a change in an applicable
Law after the date hereof, (1) could not reasonably be expected to cause the
undistributed earnings of such Foreign Subsidiary or any Foreign Subsidiary of a
Foreign Subsidiary Holding Company as determined for United States federal
income tax purposes to be treated as a deemed dividend to such Foreign
Subsidiary’s United States parent, such Foreign Subsidiary Holding Company or
such Foreign Subsidiary Holding Company’s United States parent and (2) could not
reasonably be expected to cause any material adverse tax consequences) of the
issued and outstanding Equity Interests entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) (“Voting Equity”) and one hundred percent
(100%) of the issued and outstanding Equity Interests not entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) (“Non-Voting Equity”)
owned by such Pledgor of each Foreign Subsidiary and each Foreign Subsidiary
Holding Company, in each case, directly owned by such Pledgor set forth on
Schedule 2(a) attached hereto, in each case together with the certificates (or
other agreements or instruments), if any, representing such Equity Interests,
and all options and other rights, contractual or otherwise, with respect thereto
(collectively, together with the Equity Interests described in Section 2(b) and
2(c) below, the “Pledged Shares”), including, but not limited to, the following:

 

(i)                                     all shares, securities, membership
interests and other Equity Interests or other property representing a dividend
or other distribution on or in respect of any of the Pledged Shares, or
representing a distribution or return of capital upon or in respect of the
Pledged Shares, or resulting from a stock split, revision, reclassification or
other exchange therefor, and any other dividends, distributions, subscriptions,
warrants, cash, securities, instruments, rights, options or other property
issued to or received or receivable by the holder of, or otherwise in respect
of, the Pledged Shares; and

 

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(ii)                                  without affecting the obligations of the
Pledgors under any provision prohibiting such action hereunder or under the
Credit Agreement, in the event of any consolidation or merger involving the
issuer of any Pledged Shares and in which such issuer is not the surviving
Person, all Equity Interests of the successor Person (or such lower amount as
specified above in the case of successor Persons that are Foreign Subsidiaries
or Foreign Subsidiary Holding Companies) formed by or resulting from such
consolidation or merger.

 

(b)                                 Additional Shares.  (i) One hundred percent
(100%) of the issued and outstanding Equity Interests of any Person that
hereafter becomes a Domestic Subsidiary (other than a Foreign Subsidiary Holding
Company) directly owned by such Pledgor and (ii) sixty-five percent (65%) (or
such greater percentage that, due to a change in an applicable Law after the
date hereof, (1) could not reasonably be expected to cause the undistributed
earnings of such Foreign Subsidiary or any Foreign Subsidiary of a Foreign
Subsidiary Holding Company as determined for United States federal income tax
purposes to be treated as a deemed dividend to such Foreign Subsidiary’s United
States parent, such Foreign Subsidiary Holding Company or such Foreign
Subsidiary Holding Company’s United States parent and (2) could not reasonably
be expected to cause any material adverse tax consequences) of the Voting Equity
and one hundred percent (100%) of the Non-Voting Equity owned by such Pledgor of
any Person that hereafter becomes a Foreign Subsidiary or a Foreign Subsidiary
Holding Company, in each case, directly owned by such Pledgor, including,
without limitation, the certificates (or other agreements or instruments)
representing such Equity Interests and all options and other rights, contractual
or otherwise, with respect thereto.

 

(c)                                  Accessions and Proceeds.  All Accessions
and all Proceeds of any and all of the foregoing.

 

Without limiting the generality of the foregoing, it is hereby specifically
understood and agreed that a Pledgor may from time to time hereafter deliver
additional Equity Interests to the Administrative Agent as collateral security
for the Secured Obligations.  Upon delivery to the Administrative Agent, such
additional Equity Interests shall be deemed to be part of the Pledged Collateral
of such Pledgor and shall be subject to the terms of this Pledge Agreement
whether or not Schedule 2(a) is amended to refer to such additional Equity
Interests.

 

3.                                      Security for Secured Obligations.  The
security interest created hereby in the Pledged Collateral of each Pledgor
constitutes continuing collateral security for all of the Secured Obligations,
whether now existing or hereinafter arising.

 

4.                                      Delivery of the Pledged Collateral. 
Each Pledgor hereby agrees that:

 

(a)                                 Delivery of Certificates.  Each Pledgor
shall deliver to the Administrative Agent (i) simultaneously with or promptly
following the execution and delivery of this Pledge Agreement, all certificates
(if any) representing the Pledged Shares of such Pledgor and (ii) promptly upon
the receipt thereof by or on behalf of a Pledgor, all other certificates and
instruments constituting Pledged Collateral of a Pledgor.  Prior to delivery to
the Administrative Agent, all such certificates and instruments constituting
Pledged Collateral of a Pledgor shall be held in trust by such Pledgor for the
benefit of the Administrative Agent pursuant hereto.  All such certificates and
instruments shall be delivered in suitable form for transfer by delivery or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, substantially in the form provided in Exhibit 4(a) attached hereto.

 

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(b)                                 Additional Securities.  If such Pledgor
shall receive (or become entitled to receive) by virtue of its being or having
been the owner of any Pledged Collateral, any (i) certificate or instrument,
including without limitation, any certificate representing a dividend or
distribution in connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets, combination of shares
or membership or other Equity Interests, stock splits, spin-off or split-off,
promissory notes or other instruments, (ii) option or right, whether as an
addition to, substitution for, conversion of, or an exchange for, any Pledged
Collateral or otherwise in respect thereof, (iii) dividends payable in
securities or (iv) distributions of securities or other Equity Interests, cash
or other property in connection with a partial or total liquidation, dissolution
or reduction of capital, capital surplus or paid-in surplus, then such Pledgor
shall accept and receive each such certificate, instrument, option, right,
dividend or distribution in trust for the benefit of the Administrative Agent,
shall segregate it from such Pledgor’s other property and shall deliver it
forthwith to the Administrative Agent in the exact form received together with
any necessary endorsement and/or appropriate stock power duly executed in blank,
substantially in the form provided in Exhibit 4(a), to be held by the
Administrative Agent as Pledged Collateral and as further collateral security
for the Secured Obligations.

 

(c)                                  Financing Statements.  Each Pledgor
authorizes the Administrative Agent to file one or more financing statements
(including authorization to describe the Pledged Collateral as “all assets” or
words of similar meaning) disclosing the Administrative Agent’s security
interest in the Pledged Collateral.  Each Pledgor agrees to execute and deliver
to the Administrative Agent such financing statements and other filings as may
be reasonably requested by the Administrative Agent in order to perfect and
protect the security interest created hereby in the Pledged Collateral of such
Pledgor.

 

5.                                      Representations and Warranties.  Each
Pledgor hereby represents and warrants to the Administrative Agent, for the
benefit of the Secured Parties, that:

 

(a)                                 Authorization of Pledged Shares.  The
Pledged Shares are duly authorized and validly issued, are fully paid and
nonassessable and are not subject to the preemptive rights of any Person.

 

(b)                                 Title.  Each Pledgor has good and
indefeasible title to the Pledged Collateral of such Pledgor and is the legal
and beneficial owner of such Pledged Collateral free and clear of any Lien,
other than Permitted Liens.  There exists no “adverse claim” within the meaning
of Section 8-102 of the UCC with respect to the Pledged Shares of such Pledgor,
other than Permitted Liens.

 

(c)                                  Exercising of Rights.  The exercise by the
Administrative Agent of its rights and remedies hereunder will not violate any
Law or governmental regulation applicable to such Pledgor or any material
contractual restriction binding on or affecting a Pledgor or any of its
property.  There are no restrictions in any Organization Document governing any
Pledged Collateral or any document related thereto which would limit or restrict
the grant of a Lien pursuant to this Pledge Agreement on such Pledged
Collateral, the perfection of such Lien or the exercise of remedies in respect
of such perfected Lien in the Pledged Collateral as contemplated by this Pledge
Agreement.

 

(d)                                 Pledgor’s Authority.  No authorization,
approval or action by, and no notice or filing with any Governmental Authority
or with the issuer of any Pledged Shares or any other

 

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Person is required either (i) for the pledge made by a Pledgor or for the
granting of the security interest by a Pledgor pursuant to this Pledge Agreement
(except as have been already obtained) or (ii) for the exercise by the
Administrative Agent or the Secured Parties of their rights and remedies
hereunder (except as may be required by the UCC or applicable foreign laws or
laws affecting the offering and sale of securities).

 

(e)                                  Security Interest/Priority.  This Pledge
Agreement creates a valid security interest in favor of the Administrative Agent
for the benefit of the Secured Parties, in the Pledged Collateral.  The taking
of possession by the Administrative Agent of the certificates representing the
Pledged Shares and all other certificates and instruments constituting Pledged
Collateral will perfect and establish the first priority of the Administrative
Agent’s security interest in the Pledged Shares and, when properly perfected by
filing a UCC financing statement or registration, in all other Pledged
Collateral represented by such Pledged Shares and instruments securing the
Secured Obligations to the extent such security interest can be perfected by
filing a UCC financing statement.  Except as set forth in this Section 5(e), no
action is necessary to perfect or otherwise protect such security interest.

 

(f)                                   Partnership and Membership Interests. 
Except as disclosed to the Administrative Agent by written notice, none of the
Pledged Shares consisting of partnership or limited liability company interests
(i) is dealt in or traded on a securities exchange or in a securities market,
(ii) by its terms expressly provides that it is a security governed by Article 8
of the UCC, (iii) is an Investment Company Security, (iv) is held in a
securities account or (v) constitutes a Security or a Financial Asset.

 

(g)                                  No Other Interests.  As of the date hereof,
no Pledgor owns any Equity Interests in any Subsidiary other than as set forth
on Schedule 2(a) attached hereto.

 

6.                                      Covenants.  Each Pledgor hereby
covenants, that so long as any of the Secured Obligations (other than contingent
indemnification obligations for which no claim has been asserted) remain
outstanding and until all of the Commitments relating thereto have been
terminated, such Pledgor shall:

 

(a)                                 Defense of Title.  Warrant and defend title
to and ownership of the Pledged Collateral of such Pledgor at its own expense
against the claims and demands of all other parties claiming an interest
therein, keep the Pledged Collateral free from all Liens, except for Permitted
Liens, and not sell, exchange, transfer, assign, lease or otherwise dispose of
Pledged Collateral of such Pledgor or any interest therein, except as permitted
under the Credit Agreement and the other Loan Documents.

 

(b)                                 Further Assurances.  Promptly execute and
deliver at its expense all further instruments and documents and take all
further action that may be necessary and desirable or that the Administrative
Agent may reasonably request in order to (i) perfect and protect the security
interest created hereby in the Pledged Collateral of such Pledgor (including,
without limitation, any and all other action reasonably necessary to satisfy the
Administrative Agent that the Administrative Agent has obtained a first priority
perfected security interest in all Pledged Collateral), (ii) enable the
Administrative Agent to exercise and enforce its rights and remedies hereunder
in respect of the Pledged Collateral of such Pledgor and (iii) otherwise effect
the purposes of this Pledge Agreement, including, without limitation and if
requested by the Administrative Agent, delivering to the Administrative Agent
upon its request following the

 

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occurrence and continuation of an Event of Default, irrevocable proxies in
respect of the Pledged Collateral of such Pledgor.

 

(c)                                  Amendments.  Not make or consent to any
amendment or other modification or waiver with respect to any of the Pledged
Collateral of such Pledgor or enter into any agreement or allow to exist any
restriction with respect to any of the Pledged Collateral of such Pledgor other
than as may be permitted under the Credit Agreement.

 

(d)                                 Compliance with Securities Laws.  File all
reports and other information now or hereafter required to be filed by such
Pledgor with the SEC and any other state, federal or foreign agency in
connection with the ownership of the Pledged Collateral of such Pledgor.

 

(e)                                  Books and Records.  Mark its books and
records (and shall cause the issuer of the Pledged Shares of such Pledgor to
mark its books and records) to reflect the security interest granted pursuant to
this Pledge Agreement.

 

(f)                                   Issuance or Acquisition of Equity
Interests.  Not, without promptly executing and delivering, or causing to be
executed and delivered, to the Administrative Agent such agreements, documents
and instruments as the Administrative Agent may reasonably request (or as
required under the Credit Agreement) for the purpose of perfecting its security
interest therein, issue or acquire any Equity Interests constituting Pledged
Collateral consisting of an interest in a partnership or a limited liability
company that (i) is dealt in or traded on a securities exchange or in a
securities market, (ii) by its terms expressly provides that it is a security
governed by Article 8 of the UCC, (iii) is an Investment Company Security,
(iv) is held in a securities account or (v) constitutes a Security or a
Financial Asset.

 

7.                                      Advances. On failure of any Pledgor to
perform any of the covenants and agreements contained herein or in any other
Loan Document, the Administrative Agent may, at its sole option and in its sole
discretion, perform the same and in so doing may expend such sums as the
Administrative Agent may reasonably deem advisable in the performance thereof,
including, without limitation, the payment of any insurance premiums, the
payment of any taxes, a payment to obtain a release of a Lien or potential Lien,
expenditures made in defending against any adverse claim and all other
expenditures that the Administrative Agent may make for the protection of the
security hereof or may be compelled to make by operation of law.  All such sums
and amounts so expended shall be repayable by the Pledgors on a joint and
several basis (subject to Section 23 hereof) promptly upon timely notice thereof
and demand therefor, shall constitute additional Secured Obligations and shall
bear interest from the date said amounts are expended at the Default Rate.  No
such performance of any covenant or agreement by the Administrative Agent on
behalf of any Pledgor, and no such advance or expenditure therefor, shall
relieve the Pledgors of any Default or Event of Default.  The Administrative
Agent may make any payment hereby authorized in accordance with any bill,
statement or estimate procured from the appropriate public office or holder of
the claim to be discharged without inquiry into the accuracy of such bill,
statement or estimate or into the validity of any tax assessment, sale,
forfeiture, tax lien, title or claim except to the extent such payment is being
contested in good faith by a Pledgor in appropriate proceedings and against
which adequate reserves are being maintained in accordance with GAAP.

 

8.                                      Remedies.

 

(a)                                 General Remedies.  Upon the occurrence of an
Event of Default and during the continuation thereof, the Administrative Agent
shall have, in addition to the rights and remedies provided herein, in the Loan
Documents, in any other documents relating to the Secured

 

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Obligations, or by law (including, without limitation, levy of attachment and
garnishment), the rights and remedies of a secured party under the Uniform
Commercial Code of the jurisdiction applicable to the affected Pledged
Collateral.

 

(b)                                 Sale of Pledged Collateral.  Upon the
occurrence of an Event of Default and during the continuation thereof, without
limiting the generality of this Section 8 and without notice, the Administrative
Agent may, in its sole discretion, sell or otherwise dispose of or realize upon
the Pledged Collateral, or any part thereof, in one or more parcels, at public
or private sale, at any exchange or broker’s board or elsewhere, at such price
or prices and on such other terms as the Administrative Agent may deem
commercially reasonable, for cash, credit or for future delivery or otherwise in
accordance with applicable law.  To the extent permitted by law, any Secured
Party may in such event, bid for the purchase of such securities.  Each Pledgor
agrees that, to the extent notice of sale shall be required by law and has not
been waived by such Pledgor, any requirement of reasonable notice shall be met
if notice, specifying the place of any public sale or the time after which any
private sale is to be made, is personally served on or mailed, postage prepaid,
to such Pledgor, in accordance with the notice provisions of Section 11.02 of
the Credit Agreement at least ten (10) Business Days before the time of such
sale.  The Administrative Agent shall not be obligated to make any sale of
Pledged Collateral of such Pledgor regardless of notice of sale having been
given.  The Administrative Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned.

 

(c)                                  Private Sale.  Upon the occurrence of an
Event of Default and during the continuation thereof, the Pledgors recognize
that the Administrative Agent may be unable or deem it impracticable to effect a
public sale of all or any part of the Pledged Shares or any of the securities
constituting Pledged Collateral and that the Administrative Agent may,
therefore, determine to make one or more private sales of any such Pledged
Collateral to a restricted group of purchasers who will be obligated to agree,
among other things, to acquire such Pledged Collateral for their own account,
for investment and not with a view to the distribution or resale thereof.  Each
Pledgor acknowledges and agrees that any such private sale may be at prices and
on other terms less favorable than the prices and other terms that might have
been obtained at a public sale and, notwithstanding the foregoing, agrees that
such private sale shall be deemed to have been made in a commercially reasonable
manner and that the Administrative Agent shall have no obligation to delay sale
of any such Pledged Collateral for the period of time necessary to permit the
issuer of such Pledged Collateral to register such Pledged Collateral for public
sale under the Securities Act or under applicable state securities laws.  Each
Pledgor further acknowledges and agrees that any offer to sell such Pledged
Collateral that has been publicly advertised on a bona fide basis in a newspaper
or other publication of general circulation in the financial community of New
York, New York (to the extent that such offer may be advertised without prior
registration under the Securities Act) shall be deemed to involve a “public
sale” under the UCC, notwithstanding that such sale may not constitute a “public
offering” under the Securities Act, and the Administrative Agent may, in such
event, bid for the purchase of such Pledged Collateral.

 

(d)                                 Retention of Pledged Collateral.  To the
extent permitted by applicable law, in addition to the rights and remedies
hereunder, upon the occurrence of an Event of Default and during the
continuation thereof, the Administrative Agent may, after providing the notices
required by Sections 9-620 and 9-621 of the UCC (or any successor section) or
otherwise complying with the requirements of applicable law of the relevant
jurisdiction, retain all or any

 

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portion of the Pledged Collateral in satisfaction of the Secured Obligations. 
Unless and until the Administrative Agent shall have provided such notices,
however, the Administrative Agent shall not be deemed to have retained any
Pledged Collateral in satisfaction of any Secured Obligations for any reason.

 

(e)                                  Deficiency.  In the event that the proceeds
of any sale, collection or realization are insufficient to pay all amounts to
which the Administrative Agent or the Secured Parties are legally entitled, the
Pledgors shall be jointly and severally liable (subject to Section 23 hereof)
for the deficiency, together with interest thereon at the Default Rate, together
with the costs of collection and the reasonable fees, charges and disbursements
of counsel.  Any surplus remaining after the full payment and satisfaction of
the Secured Obligations shall be returned to the Pledgors or to whomsoever a
court of competent jurisdiction shall determine to be entitled thereto.

 

9.                                      Rights of the Administrative Agent.

 

(a)                                 Power of Attorney.  Each Pledgor hereby
designates and appoints the Administrative Agent, on behalf of the Secured
Parties, and each of its designees or agents, as attorney-in-fact of such
Pledgor, irrevocably and with power of substitution, with authority to take any
or all of the following actions upon the occurrence and during the continuation
of an Event of Default:

 

(i)                                     to demand, collect, settle, compromise
and adjust, and give discharges and releases concerning the Pledged Collateral,
all as the Administrative Agent may deem reasonably appropriate;

 

(ii)                                  to commence and prosecute any actions at
any court for the purposes of collecting any of the Pledged Collateral and
enforcing any other right in respect thereof;

 

(iii)                               to defend, settle or compromise any action
brought in respect of the Pledged Collateral and, in connection therewith, give
such discharge or release as the Administrative Agent may deem reasonably
appropriate;

 

(iv)                              to pay or discharge taxes, liens, security
interests or other encumbrances levied or placed on or threatened against the
Pledged Collateral;

 

(v)                                 to direct any parties liable for any payment
in connection with any of the Pledged Collateral to make payment of any and all
monies due and to become due thereunder directly to the Administrative Agent or
as the Administrative Agent shall direct;

 

(vi)                              to receive payment of and receipt for any and
all monies, claims and other amounts due and to become due at any time in
respect of or arising out of any Pledged Collateral;

 

(vii)                           to sign and endorse any drafts, assignments,
proxies, stock powers, verifications, notices and other documents relating to
the Pledged Collateral;

 

(viii)                        to execute and deliver all assignments,
conveyances, statements, financing statements, renewal financing statements,
security and pledge agreements,

 

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affidavits, notices and other agreements, instruments and documents that the
Administrative Agent may deem reasonably appropriate in order to perfect and
maintain the security interests and liens granted in this Pledge Agreement and
in order to fully consummate all of the transactions contemplated therein;

 

(ix)                              to institute any foreclosure proceedings that
the Administrative Agent may deem appropriate;

 

(x)                                 to exchange any of the Pledged Collateral or
other property upon any merger, consolidation, reorganization, recapitalization
or other readjustment of the issuer thereof and, in connection therewith,
deposit any of the Pledged Collateral with any committee, depository, transfer
agent, registrar or other designated agency upon such terms as the
Administrative Agent may deem reasonably appropriate;

 

(xi)                              to vote for a shareholder or member
resolution, or to sign an instrument in writing, sanctioning the transfer of any
or all of the Pledged Collateral into the name of the Administrative Agent or
one or more of the Secured Parties or into the name of any transferee to whom
the Pledged Collateral or any part thereof may be sold pursuant to Section 8
hereof; and

 

(xii)                           to do and perform all such other acts and things
as the Administrative Agent may deem reasonably necessary or appropriate in
connection with the Pledged Collateral.

 

This power of attorney is a power coupled with an interest and shall be
irrevocable for so long as any of the Secured Obligations (other than contingent
indemnification obligations for which no claim has been asserted) shall remain
outstanding and until all of the Commitments relating thereto shall have been
terminated.  The Administrative Agent shall be under no duty to exercise or
withhold the exercise of any of the rights, powers, privileges and options
expressly or implicitly granted to the Administrative Agent in this Pledge
Agreement, and shall not be liable for any failure to do so or any delay in
doing so.  The Administrative Agent shall not be liable for any act or omission
or for any error of judgment or any mistake of fact or law in its individual
capacity or its capacity as attorney-in-fact except acts or omissions resulting
from its gross negligence or willful misconduct. This power of attorney is
conferred on the Administrative Agent solely to protect, preserve and realize
upon its security interest in the Pledged Collateral.

 

(b)                                 Assignment by the Administrative Agent.  The
Administrative Agent may from time to time assign the Secured Obligations to a
successor administrative agent in accordance with the Credit Agreement, and such
successor shall be entitled to all of the rights and remedies of the
Administrative Agent under this Pledge Agreement in relation thereto.

 

(c)                                  The Administrative Agent’s Duty of Care. 
Other than the exercise of reasonable care to assure the safe custody of the
Pledged Collateral while being held by the Administrative Agent hereunder and to
account for all proceeds thereof, the Administrative Agent shall have no duty or
liability to preserve rights pertaining thereto, it being understood and agreed
that the Pledgors shall be responsible for preservation of all rights in the
Pledged Collateral, and the Administrative Agent shall be relieved of all
responsibility for the Pledged Collateral upon surrendering it or tendering the
surrender of it to the Pledgors.  The Administrative Agent shall be deemed to
have exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equal to

 

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that which the Administrative Agent accords its own property, which shall be no
less than the treatment employed by a reasonable and prudent agent in the
industry, it being understood that the Administrative Agent shall not have
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any of the Pledged Collateral.  In the event of a public
or private sale of the Pledged Collateral pursuant to Section 8 hereof, the
Administrative Agent shall have no responsibility for ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relating to any Pledged Collateral, whether or not the
Administrative Agent has or is deemed to have knowledge of such matters.

 

(d)                                 Voting Rights in Respect of the Pledged
Collateral.

 

(i)                                     So long as no Event of Default shall
have occurred and be continuing, each Pledgor may exercise any and all voting
and other consensual rights pertaining to the Pledged Collateral of such Pledgor
or any part thereof for any purpose not inconsistent with the terms of this
Pledge Agreement or the Credit Agreement; and

 

(ii)                                  Upon the occurrence and during the
continuance of an Event of Default, and delivery by the Administrative Agent to
the applicable Pledgor of notice of its intent to exercise its rights under this
Section 9(d), all rights of a Pledgor to exercise the voting and other
consensual rights that it would otherwise be entitled to exercise pursuant to
paragraph (i) of this subsection shall cease and all such rights shall thereupon
become vested in the Administrative Agent, which shall then have the sole right
to exercise such voting and other consensual rights.

 

(e)                                  Dividend Rights in Respect of the Pledged
Collateral.

 

(i)                                     So long as no Event of Default shall
have occurred and be continuing and subject to Section 4(b) hereof, each Pledgor
may receive and retain any and all dividends and distributions (other than stock
dividends and other dividends and distributions constituting Pledged Collateral
addressed hereinabove) or interest paid in respect of the Pledged Collateral to
the extent permitted under the Credit Agreement.

 

(ii)                                  Upon the occurrence and during the
continuance of an Event of Default, and delivery by the Administrative Agent to
the applicable Pledgor of notice of its intent to exercise its rights under this
Section 9(e):

 

(A)                               all rights of a Pledgor to receive the
dividends, distributions and interest payments that it would otherwise be
authorized to receive and retain pursuant to paragraph (i) of this subsection
shall cease and all such rights shall thereupon be vested in the Administrative
Agent, which shall then have the sole right to receive and hold as Pledged
Collateral such dividends, distributions and interest payments; and

 

(B)                               all dividends and interest payments that are
received by a Pledgor contrary to the provisions of paragraph (ii)(A) of this
subsection shall be received in trust for the benefit of the Administrative
Agent, shall be segregated from other property or funds of such Pledgor, and
shall be promptly paid over to the Administrative Agent as Pledged Collateral in
the exact form received, to be held by the Administrative Agent as Pledged
Collateral and as further collateral security for the Secured Obligations.

 

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(f)                                   Release of Pledged Collateral.  The
Administrative Agent may release any of the Pledged Collateral from this Pledge
Agreement or may substitute any of the Pledged Collateral for other Pledged
Collateral without altering, varying or diminishing in any way the force,
effect, lien, pledge or security interest of this Pledge Agreement as to any
Pledged Collateral not expressly released or substituted, and this Pledge
Agreement shall continue as a first priority lien on all Pledged Collateral not
expressly released or substituted.  If any of the Pledged Collateral shall be
sold, transferred or otherwise disposed of by any Pledgor in a transaction
permitted by the Credit Agreement, then the Administrative Agent, at the request
and sole expense of such Pledgor, shall execute and deliver to such Pledgor all
releases or other documents reasonably necessary for the release of the Liens
created hereby on such Pledged Collateral.

 

10.                               Application of Proceeds.  Upon the
acceleration of the Obligations pursuant to Section 9.02 of the Credit
Agreement, any payments in respect of the Secured Obligations and any proceeds
of the Pledged Collateral, when received by the Administrative Agent or any of
the Secured Parties in cash or its equivalent, will be applied in reduction of
the Secured Obligations in the order set forth in Section 9.03 of the Credit
Agreement, and each Pledgor irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees that the
Administrative Agent shall have the continuing and exclusive right to apply and
reapply any and all such payments and proceeds in the Administrative Agent’s
sole discretion, notwithstanding any entry to the contrary upon any of its books
and records.

 

11.                               Continuing Agreement.

 

(a)                                 This Pledge Agreement shall be a continuing
agreement in every respect and shall remain in full force and effect so long as
any of the Secured Obligations (other than contingent indemnification
obligations for which no claim has been asserted) remains outstanding and until
all of the Commitments relating thereto have been terminated.  Upon payment or
other satisfaction of all Secured Obligations (other than contingent
indemnification obligations for which no claim has been asserted) and
termination of the Commitments related thereto, this Pledge Agreement and the
liens and security interests of the Administrative Agent hereunder shall be
automatically terminated and the Administrative Agent shall, upon the request
and at the expense of the Pledgors, execute and deliver all UCC termination
statements and/or other documents reasonably requested by the Pledgors
evidencing such termination and return to Pledgors all Pledged Collateral in its
possession.  Notwithstanding the foregoing, all releases and indemnities
provided hereunder shall survive termination of this Pledge Agreement.

 

(b)                                 This Pledge Agreement shall continue to be
effective or be automatically reinstated, as the case may be, if at any time
payment, in whole or in part, of any of the Secured Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent or any
Secured Party as a preference, fraudulent conveyance or otherwise under any
bankruptcy, insolvency or similar law, all as though such payment had not been
made; provided that in the event payment of all or any part of the Secured
Obligations is rescinded or must be restored or returned, all costs and expenses
(including, without limitation, reasonable attorneys’ fees and disbursements)
incurred by the Administrative Agent or any Secured Party in defending and
enforcing such reinstatement shall be deemed to be included as a part of the
Secured Obligations.

 

12.                               Amendments and Waivers.  This Pledge Agreement
and the provisions hereof may not be amended, waived, modified, changed,
discharged or terminated except as set forth in Section 11.01 of the Credit
Agreement.

 

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13.                               Successors in Interest.  This Pledge Agreement
shall create a continuing security interest in the Pledged Collateral and shall
be binding upon each Pledgor, its successors and assigns, and shall inure,
together with the rights and remedies of the Administrative Agent and the
Secured Parties hereunder, to the benefit of the Administrative Agent and the
Secured Parties and their successors and permitted assigns; provided, however,
none of the Pledgors may assign its rights or delegate its duties hereunder
without the prior written consent of the requisite Lenders under the Credit
Agreement.

 

14.                               Notices.  All notices required or permitted to
be given under this Pledge Agreement shall be given as provided in Section 11.02
of the Credit Agreement.

 

15.                               Counterparts.  This Pledge Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract.  Delivery of an executed
counterpart of a signature page of this Pledge Agreement by facsimile or other
electronic imaging means (e.g. “pdf” or “tif”) shall be effective as delivery of
a manually executed counterpart of this Pledge Agreement.

 

16.                               Headings.  Section headings herein are
included for convenience of reference only and shall not affect the
interpretation of this Pledge Agreement.

 

17.                               Governing Law; Submission to Jurisdiction;
Waiver of Venue, Service of Process, Waiver of Right to Jury Trial.  The terms
of Section 11.14 of the Credit Agreement and Section 11.15 of the Credit
Agreement with respect to governing law, submission to jurisdiction, waiver of
venue, service of process and waiver of the right to a jury trial are each
incorporated herein by reference, mutatis mutandis, and the parties hereto agree
to such terms.

 

18.                               Severability.  If any provision of this Pledge
Agreement is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Pledge Agreement
shall not be affected or impaired thereby and (b) the parties shall endeavor in
good faith negotiations to replace the illegal, invalid or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the illegal, invalid or unenforceable provisions.  The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

19.                               Entirety.  This Pledge Agreement, the other
Loan Documents and the other documents relating to the Secured Obligations
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
proposal letters or correspondence relating to the Loan Documents, any other
documents relating to the Secured Obligations, or the transactions contemplated
herein and therein.

 

20.                               Survival.  All representations and warranties
of the Pledgors hereunder shall survive the execution and delivery of this
Pledge Agreement, the other Loan Documents and the other documents relating to
the Secured Obligations, the delivery of the Notes and the extension of credit
thereunder or in connection therewith.

 

21.                               Other Security.  To the extent that any of the
Secured Obligations are now or hereafter secured by property other than the
Pledged Collateral (including, without limitation, real and other personal
property and securities owned by a Pledgor), or by a guarantee, endorsement or
property of any other Person, then to the extent permitted by applicable law the
Administrative Agent shall have the right to proceed against such other
property, guarantee or endorsement upon the occurrence and during the
continuation of any Event of Default, and the Administrative Agent shall have
the right, in its sole

 

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discretion, to determine which rights, security, liens, security interests or
remedies the Administrative Agent shall at any time pursue, relinquish,
subordinate, modify or take with respect thereto, without in any way modifying
or affecting any of them or the Secured Obligations or any of the rights of the
Administrative Agent or the Secured Parties under this Pledge Agreement, under
any of the other Loan Documents or under any other document relating to the
Secured Obligations.

 

22.                               Rights of Required Lenders.  All rights of the
Administrative Agent hereunder, if not exercised by the Administrative Agent,
may be exercised by the Required Lenders.

 

23.                               Joint and Several Obligations of Pledgors.

 

(a)                                 Subject to subsection (c) of this
Section 23, each of the Pledgors is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided by the
Secured Parties, for the mutual benefit, directly and indirectly, of each of the
Pledgors and in consideration of the undertakings of each of the Pledgors to
accept joint and several liability for the obligations of each of them.

 

(b)                                 Subject to subsection (c) of this
Section 23, each of the Pledgors jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Pledgors with respect to the payment and
performance of all of the Secured Obligations arising under this Pledge
Agreement, the other Loan Documents and any other documents relating to the
Secured Obligations, it being the intention of the parties hereto that all the
Secured Obligations shall be the joint and several obligations of each of the
Pledgors without preferences or distinction among them.

 

(c)                                  Notwithstanding any provision to the
contrary contained herein, in any other of the Loan Documents or in any other
documents relating to the Secured Obligations, the obligations of each Guarantor
under the Credit Agreement, the other Loan Documents and the other documents
relating to the Secured Obligations shall be limited to an aggregate amount
equal to the largest amount that would not render such obligations subject to
avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provisions of any applicable state law.

 

24.                               Joinder.  At any time after the date of this
Pledge Agreement, one or more additional Domestic Subsidiaries may become party
hereto by executing and delivering to the Administrative Agent a Joinder
Agreement.  Immediately upon such execution and delivery of such Joinder
Agreement (and without any further action), each such additional Domestic
Subsidiary will become a party to this Pledge Agreement as a “Pledgor” and have
all the rights and obligations of a Pledgor hereunder and this Pledge Agreement
and the schedules hereto shall be deemed amended by such Joinder Agreement.

 

25.                               Consent of Issuers of Pledged Shares.  Each
issuer of Pledged Shares party to this Pledge Agreement hereby acknowledges,
consents and agrees to the grant of the security interest in such Pledged Shares
by the applicable Pledgors pursuant to this Pledge Agreement, together with all
rights accompanying such security interest as provided by this Pledge Agreement
and applicable law, notwithstanding any anti-assignment provisions in any
operating agreement, limited partnership agreement or similar organizational or
governance documents of such issuer.

 

[Signature Pages Follow]

 

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Each of the parties hereto has caused a counterpart of this Pledge Agreement to
be duly executed and delivered as of the date first above written.

 

PLEDGOR:

VERACYTE, INC.,

 

a Delaware corporation

 

 

 

By:

/s/ Bonnie Anderson

 

Name: Bonnie Anderson

 

Title: President & CEO

 

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Accepted and agreed to as of the date first above written.

 

ADMINISTRATIVE AGENT:

VISIUM HEALTHCARE PARTNERS, LP,

 

a Delaware limited partnership

 

 

 

By:

VISIUM HEALTHCARE ADVISORS, LP,

 

its General Partner

 

 

 

By:

       JG ASSET II, LLC,

 

 

its General Partner

 

 

 

 

 

 

By:

/s/ Mark Gottlieb

 

 

Name:

Mark Gottlieb

 

 

Title:

Authorized Member

 

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