Exhibit 10.3


 


CONSENT TO
SUBLEASE


 


This Consent to Sublease (this “Consent”) is made as of February 10,
2010, by ARE-SAN FRANCISCO NO. 17, LLC,  a
Delaware limited liability company having an address of 385 East Colorado
Blvd., Suite 299, Pasadena, California 91101 (“Landlord”), PONIARD
PHARMACEUTICALS, INC.,
a Washington corporation, having an address of 750 Battery Street, Suite 600,
San Francisco, California  94111 (“Tenant”), and VERACYTE, INC.,
a Delaware corporation, having an address of 7000 Shoreline Court, South San
Francisco, California  94080 (“Sublessee”) with reference to the following
Recitals.


 


R E C I T A L S


 


A.            Landlord
and Tenant have entered into that certain Lease Agreement (the “Lease”) dated July 10, 2006, wherein
Landlord leased to Tenant certain premises (the “Premises”) located at 7000 Shoreline Court, South San
Francisco, California and more particularly described in the Lease.


 


B.            Tenant
desires to sublease to Sublessee the entire Premises pursuant to the provisions
of that certain Sublease dated February 10, 2010 (the “Sublease”), a copy of which is attached
hereto as Exhibit A.


 


C.            Tenant
desires to obtain Landlord’s consent to the Sublease.


 


D.            Concurrent with the execution of
this Consent, Landlord and Sublessee are entering into a lease agreement
pursuant to which Sublessee shall lease the Premises directly from Landlord
upon the expiration or earlier termination of the Lease (“Direct Lease”).  Pursuant to the terms of the Direct Lease,
Landlord will enter onto the Premises from and after the date hereof to
construct certain improvements within the Premises, as more specifically
described on the space plan attached hereto as Exhibit B and the
construction budget attached hereto as Exhibit C (“Landlord’s Work”); provided, that, the
cased opening shown on Exhibit B will not be constructed until
after September 1, 2010.


 


NOW,
THEREFORE, in
consideration of the foregoing and the agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Landlord hereby consents to the sublease of the Premises
to Sublessee, such consent being subject to and upon the following terms and
conditions to which Tenant and Sublessee hereby agree:


 


1.                                       All initially capitalized terms not
otherwise defined in this Consent shall have the meanings set forth in the
Lease unless the context clearly indicates otherwise.


 


2.                                       This Consent shall not be effective and
the Sublease shall not be valid unless and until Landlord shall have received: (a) a
fully executed copy of the Sublease, (b) a fully executed counterpart of
this Consent, and (c) an
insurance certificate from Sublessee, as insured, evidencing no less than the
insurance requirements set forth in the Lease.    Tenant and Sublessee each represent
and warrant to Landlord that the copy of the Sublease attached hereto as Exhibit A
is true, correct and complete in all material respects.


 


3.                                       Landlord neither approves nor disapproves
the terms, conditions and agreements contained in the Sublease, all of which
shall be subordinate and at all times subject to:


 


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(a) all of the covenants, agreements, terms,
provisions and conditions contained in the Lease, (b) superior ground
leases, mortgages, deeds of trust, or any other hypothecation or security now
existing or hereafter placed upon the real property of which the Premises are a
part and to any and all advances secured thereby and to all renewals,
modifications, consolidations, replacements and extensions thereof, and (c) all
matters of record affecting the Premises and all laws, ordinances and
regulations now or hereafter affecting the Premises.


 


4.                                       Except as expressly set forth in this
Consent, nothing contained herein or in the Sublease shall be construed to:


 


a.                                       modify, waive, impair, or affect any of
the terms, covenants or conditions contained in the Lease (including, without
limitation, Tenant’s obligation to obtain any required consents for any other
or future sublettings), or to waive any breach thereof, or any rights or
remedies of Landlord under the Lease against any person, firm, association or
corporation liable for the performance thereof, or to enlarge or increase
Landlord’s obligations or liabilities under the Lease (including, without
limitation, any liability to Sublessee for any portion of the security deposit
held by Tenant under the Sublease), and all terms, covenants and conditions of
the Lease are hereby declared by each of Landlord and Tenant to be in full
force and effect.


 


b.                                      require Landlord to accept any payments
from Sublessee on behalf of Tenant, except as expressly provided in Section 7
hereof.


 


Tenant shall remain liable and responsible for the
due keeping, performance and observance of all the terms, covenants and conditions
set forth in the Lease on the part of the Tenant to be kept, performed and
observed and for the payment of the annual rent, additional rent and all other
sums now and hereafter becoming payable thereunder for all of the Premises,
including, without limitation, the Premises.


 


5.                                       Notwithstanding anything in the Sublease
to the contrary:


 


a.                                       Sublessee does hereby expressly agree to
be bound by and to perform and comply with, for the benefit of Landlord, each
and every obligation of Tenant under the Lease but only to the extent
applicable to the Premises and only to the extent Sublessee is required to
comply with such obligations pursuant to the Sublease; provided, however, in no
event shall Sublessee commit any act or omission in violation of the Lease.  Landlord and Sublessee each hereby release
the other, and waive their respective rights of recovery against the other for
direct or consequential loss or damage arising out of or incident to the perils
covered by property insurance carried by such party or required to be carried
under the Lease or Sublease, as applicable, and waive any right of subrogation
which might otherwise exist in or accrue to any person on account thereof.


 


b.                                      Tenant and Sublessee agree to each of the
terms and conditions of this Consent, and upon any conflict between the terms
of the Sublease and this Consent, the terms of this Consent shall control.


 


c.                                       The Sublease shall be deemed and agreed
to be a sublease only and not an assignment and there shall be no further
subletting or assignment of all or any


 


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portion of the
Premises demised under the Lease except in accordance with the terms and
conditions of the Lease; provided, however, that as between Landlord and
Sublessee, Landlord’s consent shall not be required for Permitted Assignments
(as defined in the Direct Lease).


 


d.                                      If Landlord terminates the Lease as a
result of a default by Tenant thereunder or the Lease terminates for any other
reason, the Sublease shall automatically terminate concurrently therewith; provided,
however, that as between Landlord and Sublessee, the Direct Lease shall
commence immediately upon such termination as set forth in Section 2 of
the Direct Lease.


 


e.                                       Tenant and Sublessee acknowledge and
agree that if Tenant or Landlord elects to terminate the Lease pursuant to the
terms thereof, or if Landlord and Tenant voluntarily elect to terminate the
Lease, Landlord shall have no responsibility, liability or obligation to
Sublessee except as provided in the Direct Lease, and the Sublease shall
terminate.


 


f.                                         Notwithstanding anything in the Lease,
Tenant agrees to reimburse all of Landlord’s costs and expenses in connection
with this Consent.


 


6.                                       Any act or omission of Sublessee or
anyone claiming under or through Sublessee that violates any of the provisions
of the Lease shall be deemed a violation of the Lease by Tenant.


 


7.                                       Upon a default by Tenant under the Lease,
Landlord may proceed directly against Tenant, any guarantors or anyone else
liable under the Lease without first exhausting Landlord’s remedies against any
other person or entity liable thereon to Landlord.  If Landlord gives Sublessee notice that
Tenant is in default under the Lease, Sublessee shall thereafter make directly
to Landlord all payments otherwise due Tenant, which payments will be received
by Landlord without any liability to Landlord except to credit such payments
against amounts due under the Lease.  The
mention in this Consent of any particular remedy shall not preclude Landlord
from any other remedy in law or in equity.


 


8.                                       Tenant shall pay any broker commissions
or fees that may be payable as a result of the Sublease and Tenant hereby
indemnifies and agrees to hold Landlord harmless from and against any loss or
liability arising therefrom or from any other commissions or fees payable in
connection with the Sublease which result from the actions of Tenant.  Sublessee hereby indemnifies and agrees to
hold Landlord harmless from and against any loss or liability arising from any
commissions or fees payable in connection with the Sublease which result from
the actions of Sublessee.


 


9.                                       Tenant and Sublessee agree that the
Sublease will not be modified or amended in any way without the prior written
consent of Landlord, which consent shall not be unreasonably withheld or
delayed.  Tenant and Sublessee hereby
agree that it shall be reasonable for Landlord to withhold its consent to any
modification or amendment of the Sublease which would change the permitted use
of the Premises or which would affect Landlord’s status as a real estate
investment trust.  Any modification or
amendment of the Sublease without Landlord’s prior written consent shall be
void and of no force or effect.


 


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10.                                 All notices or other communications
between the parties shall be in writing and shall be deemed duly given upon
delivery or refusal to accept delivery by the addressee thereof if delivered in
person, or upon actual receipt if delivered by reputable overnight guaranty courier,
addressed and sent to the Landlord and Tenant at their notice address set forth
in the Lease and to Sublessee at the address set forth below.  Each party may from time to time by written
notice to the other designate another address for receipt of future notices.


 


	
  Sublessee:

  	
  7000
  Shoreline Court

  
	
   

  	
  South
  San Francisco, CA 94080

  
	
   

  	
  Attn: Chief Executive Officer

  



 


11.                                 This Consent may not be changed orally,
but only by an agreement in writing signed by Landlord and the party against
whom enforcement of any change is sought.


 


12.                                 This Consent may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which when taken together shall constitute but one and the same instrument.


 


13.                                 This Consent and the legal relations
between the parties hereto shall be governed by and construed and enforced in
accordance with the internal laws of the State in which the Premises are
located, without regard to its principles of conflicts of law.


 


14.                                 Tenant hereby consents to the construction
of Landlord’s Work during the Term. 
Tenant and Sublessee hereby acknowledge and agree that the completion of
Landlord’s Work may have a material adverse effect on the use and quiet
enjoyment of the Premises, including, without limitation, the creation of dust,
noise and vibrations, none of which shall constitute a constructive eviction of
Tenant or Sublessee, an interruption of the use and quiet enjoyment of the
Premises or result in any offset or abatement of Rent whatsoever.  Notwithstanding anything to the contrary set
forth herein or in the Lease, Landlord shall have no liability to Tenant for
any Claims resulting from, arising out of or related to the performance of
Landlord’s Work except with respect to the covenants expressly set forth in this
Section 14.  In constructing the
Landlord’s Work, Landlord shall avoid interrupting utility and other services
to the Phase II Premises (as defined in the Sublease) except as may be
necessary in connection with construction of Landlord’s Work.  Without limiting the generality of the
foregoing, there shall be no interruption of any utilities or other services to
the Phase II Premises except with Tenant’s prior written consent and in no
event during normal business hours. 
Landlord shall take reasonable and prudent steps to minimize the adverse
effects of construction  of Landlord’s
Work on Tenant’s business operations in the Phase II Premises, and shall
consult with Tenant  regularly during the
construction period to that end.  In
performing Landlord’s Work, Landlord shall not have access to the portion of
the Premises occupied by Tenant without the prior written consent of Tenant not
to be unreasonably withheld.  Without
limiting the generality of the foregoing, Landlord shall not have any right to
use the main entrance of the Premises. 
Landlord shall construct the Landlord’s Work in accordance with Legal
Requirements. Nothing in this Section 14 shall impair or otherwise affect
in any way Tenant’s rights against Sublessee under the terms of the Sublease.


 


15.                                 Landlord acknowledges that pursuant to
the Sublease, Sublessee shall have the right to occupy the entire Premises
through the expiration or earlier termination of the Term.  Landlord hereby agrees that Sublessee’s
continued occupancy of the Premises following


 


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the termination of the Lease pursuant to Section 2
of the Direct Lease shall not constitute a holdover under the Lease.


 


16.                                 Notwithstanding anything in the Lease to
the contrary, Landlord does hereby expressly release Tenant from any
obligations: (i) under Sections 12 and 28 of the Lease with respect to the
removal of any Alterations and/or Installations to the Premises (including
Landlord’s Work), (ii) under Section 28 of the Lease with respect to
preparation of a Surrender Plan, (iii) under Section 2 of the Lease
with respect to the return and/or surrender of Landlord’s Property, and (iv) under
Section 18 of the Lease with respect to restoration of the Premises
following a casualty.  Furthermore, Tenant
shall have no obligation at the expiration of the Term to otherwise repair or
restore the Premises; provided, that nothing set forth in this Section 16
shall release Tenant from any of Tenant’s obligations under the Lease related
to Hazardous Materials in the Premises or at the Project.  If the Premises are damaged or destroyed by
fire or other insured casualty (and neither Landlord nor Sublessee terminates
the Direct Lease pursuant to Section 18 of the Direct Lease), then
Landlord shall repair the Premises as set forth in Section 18 of the
Direct Lease.


 


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IN
WITNESS WHEREOF,
Landlord, Tenant and Sublessee have caused their duly authorized
representatives to execute this Consent as of the date first above written.


 


	
  LANDLORD:

  	
  ARE-SAN FRANCISCO NO. 17, LLC,

  
	
   

  	
  a
  Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ALEXANDRIA
  REAL ESTATE EQUITIES, L.P., a Delaware limited partnership, its managing
  member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  ARE-QRS
  CORP.,

  
	
   

  	
   

  	
   

  	
  a
  Maryland corporation,

  
	
   

  	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:
  

  	
  /s/
  Gary Dean

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Gary Dean

  
	
   

  	
   

  	
   

  	
  Its:

  	
  VP — RE Legal Affairs

  



 


 


	
  TENANT:

  	
  PONIARD
  PHARMACEUTICALS, INC.,

  
	
   

  	
  a
  Washington corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gregory L. Weaver

  
	
   

  	
  Name:

  	
  Gregory
  L. Weaver

  
	
   

  	
  Its:

  	
  CFO

  
	
   

  	
   

  
	
  SUBLESSEE:

  	
  VERACYTE, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Bonnie Anderson

  
	
   

  	
  Name:

  	
  Bonnie
  Anderson

  
	
   

  	
  Its: 

  	
  CEO

  



 


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EXHIBIT A


 


[SUBLEASE DATED AS OF FEBRUARY 10, 2010 —FILED SEPARATELY]


 

















 


EXHIBIT B


 


[SPACE PLAN]


 

















 


EXHIBIT C


 


[CONSTRUCTION BUDGET]