Execution Version

 

AMENDMENT 7 TO TERM LOAN AGREEMENT

 

THIS AMENDMENT 7, dated as of November 12, 2018 (this “Amendment”), is made
among TearLab Corporation, a Delaware corporation (“Borrower”), the subsidiary
guarantors listed on the signature pages hereof under the heading “SUBSIDIARY
GUARANTORS” (each a “Subsidiary Guarantor” and, collectively, the “Subsidiary
Guarantors”) and the lenders listed on the signature pages hereof under the
heading “LENDERS” (each a “Lender” and, collectively, the “Lenders”), with
respect to the Loan Agreement referred to below.

 

RECITALS

 

WHEREAS, the Borrower and the Lenders are parties to a Term Loan Agreement,
dated as of March 4, 2015, as amended by the Omnibus Amendment Agreement, dated
as of April 2, 2015, Amendment 2, dated as of August 6, 2015, Amendment 3, dated
as of December 31, 2015, Amendment 4, dated as of April 7, 2016, Amendment 5,
dated as of October 12, 2017, and Amendment 6, dated as of April 4, 2018 (the
“Loan Agreement”), with the Subsidiary Guarantors from time to time party
thereto.

 

WHEREAS, the Borrower has requested, and the Lenders have agreed, on the terms
and subject to the conditions set forth herein, to amend the Loan Agreement.

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:

 

SECTION 1. Definitions; Interpretation.

 

(a)       Terms Defined in Loan Agreement. All capitalized terms used in this
Amendment (including in the recitals hereof) and not otherwise defined herein
shall have the meanings assigned to them in the Loan Agreement.

 

(b)       Interpretation. The rules of interpretation set forth in Section 1.03
of the Loan Agreement shall be applicable to this Amendment and are incorporated
herein by this reference.

 

SECTION 2. Amendment. Subject to Section 3:

 

(a)       The definition of “Interest-Only Period” in Section 1.01 of the Loan
Agreement is hereby amended by replacing “sixteenth (16th)” with “twentieth
(20th)”.

 

(b)       Section 3.02(d) of the Loan Agreement is hereby amended as follows:

 

(i)       by replacing the percentage “8.50%” in clause (i) thereof with the
phrase “8.50% (or, in the case of the Interest Periods ending on March 31, 2019
and June 30, 2019, none)”,

 

(ii)       by replacing the percentage “4.50%” in clause (ii) thereof with the
phrase “(or, in the case of the Interest Periods ending on March 31, 2019 and
June 30, 2019, all)”; and

 

 

 

 

(iii)       by inserting the following immediately prior to the “.” at the end
of the first sentence thereof: “; provided that, following notice from the
Federal Drug Administration, on or before June 30, 2019, of its receipt and
acceptance for review of Borrower’s application for review of its Discovery
Platform application, Borrower may elect to pay the interest on the outstanding
principal amount of the Loans payable during the quarter ending September 30,
2019 entirely in the form of a PIK Loan.”

 

(c)       Section 10.02(d) of the Loan Agreement is hereby amended by replacing
the number “25,000,000” therein with the number “24,000,000”.

 

SECTION 3. Conditions of Effectiveness.

 

(a)       The effectiveness of Section 2 shall be subject to the following
conditions precedent:

 

(i)       The Borrower shall have paid or reimbursed Lenders for Lenders’
reasonable out of pocket costs and expenses incurred in connection with this
Amendment, including Lenders’ reasonable and documented out of pocket legal fees
and costs, pursuant to Section 12.03(a)(i)(z) of the Loan Agreement.

 

(ii)       The representations and warranties in Section 4 shall be true in all
material respects on the date hereof and on the first date on which the
conditions set forth in Section 3 shall have been satisfied.

 

SECTION 4. Representations and Warranties; Reaffirmation.

 

(a)       The Borrower hereby represents and warrants to each Lender as follows:

 

(i)       The Borrower has full power, authority and legal right to make and
perform this Amendment. This Amendment is within the Borrower’s corporate powers
and has been duly authorized by all necessary corporate and, if required, by all
necessary shareholder action. This Amendment has been duly executed and
delivered by the Borrower and constitutes a legal, valid and binding obligation
of the Borrower, enforceable against the Borrower in accordance with its terms,
except as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability affecting
the enforcement of creditors’ rights and (b) the application of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). This Amendment (x) does not require any
consent or approval of, registration or filing with, or any other action by, any
Governmental Authority or any third party, except for such as have been obtained
or made and are in full force and effect, (y) will not violate any applicable
law or regulation or the charter, bylaws or other organizational documents of
the Borrower and its Subsidiaries or any order of any Governmental Authority,
other than any such violations that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, (z) will not violate
or result in an event of default under any material indenture, agreement or
other instrument binding upon the Borrower and its Subsidiaries or assets, or
give rise to a right thereunder to require any payment to be made by any such
Person.

 

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(ii)       No Default has occurred or is continuing or will result after giving
effect to this Amendment.

 

(iii)       The representations and warranties made by or with respect to the
Borrower in Section 7 of the Loan Agreement are true in all material respects
(taking into account any changes made to schedules updated in accordance with
Section 7.21 of the Loan Agreement or attached hereto), except that such
representations and warranties that refer to a specific earlier date were true
in all material respects on such earlier date.

 

(iv)       There has been no Material Adverse Effect since the date of the Loan
Agreement.

 

(v)       As of the date hereof, the Warrants represent 1.22% of Borrower’s
fully diluted shares outstanding.

 

(b)       The Borrower hereby ratifies, confirms, reaffirms, and acknowledges
its obligations under the Loan Documents to which it is a party and agrees that
the Loan Documents remain in full force and effect, undiminished by this
Amendment, except as expressly provided herein. By executing this Amendment, the
Borrower acknowledges that it has read, consulted with its attorneys regarding,
and understands, this Amendment.

 

SECTION 5. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

 

(a)       Governing Law. This Amendment and the rights and obligations of the
parties hereunder shall be governed by, and construed in accordance with, the
law of the State of New York, without regard to principles of conflicts of laws
that would result in the application of the laws of any other jurisdiction;
provided that Section 5-1401 of the New York General Obligations Law shall
apply.

 

(b)       Submission to Jurisdiction. The Borrower agrees that any suit, action
or proceeding with respect to this Amendment or any other Loan Document to which
it is a party or any judgment entered by any court in respect thereof may be
brought initially in the federal or state courts in Houston, Texas or in the
courts of its own corporate domicile and irrevocably submits to the
non-exclusive jurisdiction of each such court for the purpose of any such suit,
action, proceeding or judgment. This Section 5 is for the benefit of the Lenders
only and, as a result, no Lender shall be prevented from taking proceedings in
any other courts with jurisdiction. To the extent allowed by applicable Laws,
the Lenders may take concurrent proceedings in any number of jurisdictions.

 

(c)       Waiver of Jury Trial. The Borrower and each Lender hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any suit, action or proceeding arising out of or relating to
this Amendment, the other Loan Documents or the transactions contemplated hereby
or thereby.

 

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SECTION 6. Miscellaneous.

 

(a)       No Waiver. Nothing contained herein shall be deemed to constitute a
waiver of compliance with any term or condition contained in the Loan Agreement
or any of the other Loan Documents or constitute a course of conduct or dealing
among the parties. Except as expressly stated herein, the Lenders reserve all
rights, privileges and remedies under the Loan Documents. Except as amended
hereby, the Loan Agreement and other Loan Documents remain unmodified and in
full force and effect. All references in the Loan Documents to the Loan
Agreement shall be deemed to be references to the Loan Agreement as amended
hereby.

 

(b)       Severability. In case any provision of or obligation under this
Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

 

(c)       Headings. Headings and captions used in this Amendment (including the
Exhibits, Schedules and Annexes hereto, if any) are included for convenience of
reference only and shall not be given any substantive effect.

 

(d)       Integration. This Amendment constitutes a Loan Document and, together
with the other Loan Documents, incorporates all negotiations of the parties
hereto with respect to the subject matter hereof and is the final expression and
agreement of the parties hereto with respect to the subject matter hereof.

 

(e)       Counterparts. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Amendment by signing
any such counterpart.

 

(f)       Controlling Provisions. In the event of any inconsistencies between
the provisions of this Amendment and the provisions of any other Loan Document,
the provisions of this Amendment shall govern and prevail. Except as expressly
modified by this Amendment, the Loan Documents shall not be modified and shall
remain in full force and effect.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment, as of
the date first above written.

 

BORROWER:         TEARLAB CORPORATION         By: /s/ Seph Jensen   Name: Seph
Jensen   Title: Chief Executive Officer         SUBSIDIARY GUARANTORS:        
TEARLAB RESEARCH, INC.       By /s/ Seph Jensen   Name: Seph Jensen   Title:
Chief Executive Officer         OCUHUB HOLDINGS, INC.       By /s/ Seph Jensen 
  Name: Seph Jensen   Title: Chief Executive Officer         OCCULOGIX CANADA
CORP.        By /s/ Seph Jensen    Name: Seph Jensen     Title: Chief Executive
Officer

 

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LENDERS:             CAPITAL ROYALTY PARTNERS II L.P.     By CAPITAL ROYALTY
PARTNERS II GP L.P., its General Partner        By CAPITAL ROYALTY PARTNERS II
GP LLC, its General Partner                  By /s/ Nathan Hukill         Nathan
Hukill         Authorized Signatory             PARALLEL INVESTMENT
OPPORTUNITIES PARTNERS II L.P.     By PARALLEL INVESTMENT OPPORTUNITIES PARTNERS
II GP L.P., its General Partner       By PARALLEL INVESTMENT OPPORTUNITIES
PARTNERS II GP LLC, its General Partner                  By /s/ Nathan Hukill  
      Nathan Hukill         Authorized Signatory             CRG ISSUER 2015-1  
By CRG Servicing LLC, as Administrator             By /s/ Nathan Hukill    
Nathan Hukill     President  

  

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