AMENDMENT
2 TO TERM LOAN AGREEMENT


 


THIS
AMENDMENT 2, dated as of August 6, 2015 (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 (the “Loan Agreement”), with the Subsidiary Guarantors from time
to time party thereto.


 


WHEREAS,
the parties hereto desire to amend the Loan Agreement on the terms and subject to the conditions set forth herein.


 


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, the Loan Agreement is hereby amended as follows:


 


(a)The
definition of “Loan Documents” in Section 1.01 of the Loan Agreement is amended and restated in its entirety
as follows:


 


“Loan
Documents” means, collectively, this Agreement, the Fee Letter, the Notes, the Security Documents, each Warrant
(other than for purposes of Section 5 hereof), any subordination agreement or any intercreditor agreement entered into
by Lenders with any other creditors of Obligors and with any Obligors, and any other present or future document, instrument, agreement
or certificate executed by Obligors for the benefit of Lenders in connection with this Agreement or any of the other Loan Documents,
all as amended, restated, supplemented or otherwise modified.


 


(b)The
definition of “Obligations” in Section 1.01 of the Loan Agreement is amended by adding the following sentence
as the final sentence of such definition:


 






    	 



    	 



    

 


“Obligations
shall exclude Warrant Obligations.”


 


(c)Section
1.01 of the Loan Agreement is amended to add the following definitions thereto in the appropriate alphabetical order:


 


“Warrant”
means each warrant to purchase Equity Interests of Borrower, issued by Borrower to the Lenders pursuant to Section 6.02(g)
in connection with the Transactions.


 


“Warrant
Obligations” means, with respect to any Obligor, all amounts, obligations, liabilities, covenants and duties of
every type and description owing by such Obligor to any Lender, any other indemnitee hereunder or any participant arising out
of, under or in connection with, any Warrant, whether or not evidenced by any instrument or for the payment of money.


 


(d)Section
6.02(a) of the Loan Agreement is amended and restated in its entirety as follows:


 


“(a)
Borrowing Date. Such Borrowing shall occur on or before November 16, 2015.”


 


(e)Section
6.02(c) of the Loan Agreement is amended and restated in its entirety as follows:


 


“(c)
[Reserved].”


 


(f)Section
6.02(d) of the Loan Agreement is amended and restated in its entirety as follows:


 


“(d)
[Reserved].”


 


(g)Section
6.02(e) of the Loan Agreement is amended and restated in its entirety as follows:


 


“The
Lenders shall have received a Notice of Borrowing at least 10 Business Days prior to the second Borrowing Date.”


 






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(h)Section
6.02 of the Loan Agreement is amended by inserting “(f)” before the following language:


 


“Financing
Fee. Each Lender shall have received its portion of the fees payable pursuant to the Fee Letter.”


 


(i)Section
6.02 of the Loan Agreement is amended by adding the following provision thereto:


 


“(g)
Warrants. Borrower shall have issued to the Lenders in accordance with their Proportionate Shares, Warrants with a five
(5) year term on the second Borrowing Date, to purchase 350,000 shares of the common stock of the Borrower, such shares to be
apportioned as indicated on Schedule 1. All Warrants issued pursuant to this Section 6.02(g) will have an initial
exercise price per share of common stock equal to $5.00.”


 


(j)Section
13.01 of the Loan Agreement is amended by adding “(excluding the Warrants)” after each instance of “Loan
Document” or “Loan Documents” contained therein.


 


(k)Schedule
1 of the Loan Agreement is replaced in its entirety by the Schedule 1 attached hereto.


 


SECTION
3.Conditions of Effectiveness. The effectiveness of Section 2 shall be subject to the following conditions precedent:


 


(a)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.


 


(b)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 condition set forth in Section 3(a) 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.


 


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


 






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(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.


 


(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.


 


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.


 






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(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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of page intentionally left blank]


 




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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/ Wes Brazell
	 	Name:	Wes
    Brazell
	 	Title:	Chief
    Financial Officer
	 	 	 
	 	SUBSIDIARY GUARANTORS:
	 	 	 
	 	TEARLAB RESEARCH, INC.
	 	 	 
	 	By:	/s/ William
    Dumencu
	 	Name:	William Dumencu
	 	Title:	Chief Financial
Officer
	 	 	 
	 	OCUHUB HOLDINGS, INC.
	 	 	 
	 	By:	/s/ William
    Dumencu
	 	Name:	William
    Dumencu
	 	Title:	Chief
    Financial Officer 
	 	 	 
	 	OCUHUB LLC
	 	 	 
	 	By:	/s/ Barry Barresi
	 	Name:	Barry
    Barresi
	 	Title:	CEO
	 	 	 
	 	OCCULOGIX CANADA CORP.
	 	 	 
	 	By:	/s/ William
    Dumencu
	 	Name:	William
    Dumencu
	 	Title:	Chief
    Financial Officer 


 


[Signature Page to Amendment No. 2 to Term Loan Agreement]


 




    	 



    	 



    


 





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	 
	Name: 	Nathan Hukill	 
	Title: 	Authorized Signatory	 


 


CAPITAL ROYALTY PARTNERS II – PARALLEL FUND “A”
L.P.


By CAPITAL ROYALTY PARTNERS II – PARALLEL FUND
“A” GP L.P., its General Partner


By CAPITAL ROYALTY PARTNERS II – PARALLEL FUND
“A” GP LLC, its General Partner


 





	By:	/s/ Nathan Hukill	 
	Name:	 Nathan Hukill	 
	Title: 	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	 
	Name:	Nathan Hukill	 
	Title: 	Authorized Signatory	 


 


CAPITAL ROYALTY PARTNERS II – PARALLEL FUND “B”
(CAYMAN) L.P.


By CAPITAL ROYALTY PARTNERS II (CAYMAN) GP L.P., its
General Partner


By CAPITAL ROYALTY PARTNERS II (CAYMAN) GP LLC, its
General Partner


 


	By 	/s/ Nathan
    Hukill	 
	Name: 	Nathan Hukill	 
	Title:	Authorized Signatory	 


 


	WITNESS: 	/s/ Nicole Nesson	 
	Name: 	Nicole Nesson	 







 


[Signature
Page to Amendment No. 2 to Term Loan Agreement]


 




    	 



    	 



    


 


Schedule
1

to Term Loan Agreement


 


COMMITMENTS



 


	Lender	 	Commitment	 	 	Proportionate Share	 
	Capital Royalty Partners II L.P.	 	$	4,666,667	 	 	 	13.33	%
	Capital Royalty Partners II – Parallel Fund “A” L.P.	 	$	16,333,333	 	 	 	46.67	%
	Parallel Investment Opportunities Partners II L.P.	 	$	14,000,000	 	 	 	40.00	%
	TOTAL	 	$	35,000,000	 	 	 	100	%



 


WARRANT
SHARES


 


	Lender	 	Number of Warrant Shares
 of Common Stock
 (Second Borrowing)
	 
	Capital Royalty Partners II L.P.	 	 	46,667	 
	Capital Royalty Partners II – Parallel Fund “A” L.P.	 	 	163,333	 
	Parallel Investment Opportunities Partners II L.P.	 	 	140,000	 
	TOTAL	 	 	350,000