Document:

ex10_4.htm

Exhibit 10.4

 

SECURITY AGREEMENT

 

This Security Agreement (this “Security Agreement”), dated as of July 15, 2009, is executed by OccuLogix, Inc. (dba TearLab Corporation), a Delaware corporation (together with its successors and assigns, “Company”),
in favor of Collateral Agent (as herein defined) on behalf of the Investors listed on the signature pages hereof.

 

RECITALS

 

A.            Company and the Investors have entered into a Note Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”), pursuant to which the Company has issued convertible promissory
notes, dated as of the dates listed on Schedule 1 thereto (as amended, modified or otherwise supplemented from time to time, each a “Note” and collectively, the “Notes”).

 

B.             In order to induce each Investor to extend the credit evidenced by the Notes, Company has agreed to enter into this Security Agreement and to grant Collateral Agent, for the benefit of itself and the Investors, the security interest in the Collateral described below.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Company hereby agrees with Collateral Agent and the Investors as follows:

 

1.              Definitions and Interpretation.  When used in this Security Agreement, the following terms have the following respective meanings:

 

“Collateral” has the meaning given to that term in Section 2 hereof.

 

“Obligations” means all loans, advances, debts, liabilities and obligations, howsoever arising, owed by Company to Collateral Agent and the Investors of every kind and description (whether or not evidenced by any note or instrument and whether or not for the payment of money),
now existing or hereafter arising under or pursuant to the terms of the Notes and the other Transaction Documents, including, all interest, fees, charges, expenses, attorneys’ fees and costs and accountants’ fees and costs chargeable to and payable by Company hereunder and thereunder, in each case, whether direct or indirect, absolute or contingent, due or to become due, and whether or not arising after the commencement of a proceeding under Title 11 of the United States Code (11 U.S.C. Section 101
et seq.), as amended from time to time (including post-petition interest) and whether or not allowed or allowable as a claim in any such proceeding.

  

  

  

 

“Permitted Liens” means (a) Liens for taxes not yet delinquent or Liens for taxes being contested in good faith and by appropriate proceedings for which adequate reserves have been established; (b) Liens in respect of property or assets imposed by law which were incurred
in the ordinary course of business, such as carriers’, warehousemen’s, materialmen’s and mechanics’ Liens and other similar Liens arising in the ordinary course of business which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings; (c) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment
insurance and other types of social security, and other Liens to secure the performance of tenders, statutory obligations, contract bids, government contracts, performance and return of money bonds and other similar obligations, incurred in the ordinary course of business, whether pursuant to statutory requirements, common law or consensual arrangements; (d) Liens in favor of the Collateral Agent; (e) Liens upon any equipment acquired or held by Company or any of its Subsidiaries to secure the purchase price
of such equipment or indebtedness incurred solely for the purpose of financing the acquisition of such equipment, so long as such Lien extends only to the equipment financed, and any accessions, replacements, substitutions and proceeds (including insurance proceeds) thereof or thereto; (f) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under  the Note; (g) Liens in favor of customs and revenue authorities arising as a matter of law to
secure payments of customs duties in connection with the importation of goods, (h) Liens which constitute rights of setoff of a customary nature or banker’s liens, whether arising by law or by contract; (i) Liens on insurance proceeds in favor of insurance companies granted solely as security for financed premiums; and (j) leases or subleases and licenses or sublicenses granted in the ordinary course of Company’s business.

 

“UCC” means the Uniform Commercial Code as in effect in the State of California from time to time.

 

All capitalized terms not otherwise defined herein shall have the respective meanings given in the Notes. Unless otherwise defined herein, all terms defined in the UCC have the respective meanings given to those terms in the UCC.

 

2.             Grant of Security Interest.  As security for the Obligations,
Company hereby pledges to Collateral Agent and grants to Collateral Agent a security interest of first priority in all right, title and interests of Company in and to the property described in Attachment 1 hereto, whether now existing or hereafter from time to time acquired (collectively, the “Collateral”).

 

Notwithstanding the foregoing, the security interest granted herein shall not extend to and the term “Collateral” shall not include any equipment or other property financed by a third party, provided that such third party’s Liens are Liens of the type described in subsection (e) of the definition of Permitted Liens; provided
further that such equipment or other property shall be deemed “Collateral” hereunder if such third party’s Lien is released or otherwise terminated.

 

3.             General Representations and Warranties.  Company represents and warrants to Collateral Agent and the Investors that (a) Company is the owner of the Collateral (or, in the case of after-acquired
Collateral, at the time Company acquires rights in the Collateral, will be the owner thereof) and that no other Person has (or, in the case of after-acquired Collateral, at the time Company acquires rights therein, will have) any right, title, claim or interest (by way of Lien or otherwise) in, against or to the Collateral, other than Permitted Liens; (b) upon the filing of UCC-1 financing statements in the appropriate filing offices, Collateral Agent has (or in the case of after-acquired Collateral, at
the time Company acquires rights therein, will have) a first priority perfected security interest in the Collateral to the extent that a security interest in the Collateral can be perfected by such filing, except for Permitted Liens; (c) all Inventory has been (or, in the case of hereafter produced Inventory, will be) produced in compliance with applicable laws, including the Fair Labor Standards Act; (d) all accounts receivable and payment intangibles are genuine and enforceable against the party obligated
to pay the same; (e) the originals of all documents evidencing all accounts receivable and payment intangibles of Company and the only original books of account and records of Company relating thereto are, and will continue to be, kept at the chief executive office of Company set forth on Schedule B or at such other locations as Company may establish in accordance with Section 5(d),
and (f) all information set forth in Schedules A and B hereto is true and correct.

  

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4.           Covenants Relating to Collateral.  Company hereby agrees (a) to perform all acts that may be necessary to maintain, preserve, protect and perfect the Collateral, the Lien granted to Collateral
Agent therein and the perfection and priority of such Lien, except for Permitted Liens; (b) not to use or permit any Collateral to be used (i) in violation in any material respect of any applicable law, rule or regulation, or (ii) in violation of any policy of insurance covering the Collateral; (c) to pay promptly when due all taxes and other governmental charges, all Liens and all other charges now or hereafter imposed upon or affecting any Collateral; (d) without written notice to Collateral
Agent, (i) not to change Company’s state of incorporation, and (ii) not to keep Collateral consisting of equipment or inventory at any location other than the locations set forth in item 4 of Schedule B hereto, and (f) to procure, execute and deliver from time to time any endorsements, assignments, financing statements and other writings reasonably deemed necessary
or appropriate by Collateral Agent to perfect, maintain and protect its Lien hereunder and the priority thereof and to deliver promptly upon the request of Collateral Agent all originals of Collateral consisting of instruments.

 

5.           Authorized Action by Collateral Agent.  Company hereby irrevocably appoints Collateral Agent as its attorney-in-fact (which appointment is coupled with an interest) and agrees that Collateral Agent
may perform (but Collateral Agent shall not be obligated to and shall incur no liability to Company or any third party for failure so to do) any act which Company is obligated by this Security Agreement to perform, and to exercise such rights and powers as Company might exercise with respect to the Collateral, including the right to (a) collect by legal proceedings or otherwise and endorse, receive and receipt for all dividends, interest, payments, proceeds and other sums and property now or hereafter payable
on or on account of the Collateral; (b) enter into any extension, reorganization, deposit, merger, consolidation or other agreement pertaining to, or deposit, surrender, accept, hold or apply other property in exchange for the Collateral; (c) make any compromise or settlement, and take any action it deems advisable, with respect to the Collateral; (d) insure, process and preserve the Collateral; (e) pay any indebtedness of Company relating to the Collateral; and (f) file UCC financing
statements and execute other documents, instruments and agreements required hereunder; provided, however, that Collateral Agent shall not exercise any such powers granted pursuant to subsections (a) through (e) prior to the occurrence of an Event of Default and shall only exercise such powers during the continuance of an Event of Default.  Company agrees to reimburse Collateral
Agent upon demand for any reasonable costs and expenses, including attorneys’ fees, Collateral Agent may incur while acting as Company’s attorney-in-fact hereunder, all of which costs and expenses are included in the Obligations.  It is further agreed and understood between the parties hereto that such care as Collateral Agent gives to the safekeeping of its own property of like kind shall constitute reasonable care of the Collateral when in Collateral Agent’s possession; provided, however,
that Collateral Agent shall not be required to make any presentment, demand or protest, or give any notice and need not take any action to preserve any rights against any prior party or any other person in connection with the Obligations or with respect to the Collateral.

  

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6.           Default and Remedies.

 

(a)           Default.  Company shall be deemed in default under this Security Agreement upon the occurrence and during the continuance of an Event of Default (as defined in the Notes).

 

(b)           Remedies.  Upon the occurrence and during the continuance of any such Event of Default, Collateral Agent shall have the rights of a secured creditor under the UCC, all rights granted by this Security
Agreement and by law, including the right to:  (a) require Company to assemble the Collateral and make it available to Collateral Agent and the Investors at a place to be designated by Collateral Agent and the Investors; and (b) prior to the disposition of the Collateral, store, process, repair or recondition it or otherwise prepare it for disposition in any manner and to the extent Collateral Agent and the Investors deem appropriate.  Company hereby agrees that ten (10) days’
notice of any intended sale or disposition of any Collateral is reasonable.  In furtherance of Collateral Agent’s rights hereunder, Company hereby grants to Collateral Agent an irrevocable, non-exclusive license, exercisable without royalty or other payment by Collateral Agent, and only in connection with the exercise of remedies hereunder, to use, license or sublicense any patent, trademark, trade name, copyright or other intellectual property in which Company now or hereafter has any right,
title or interest together with the right of access to all media in which any of the foregoing may be recorded or stored.

 

(c)           Application of Collateral Proceeds.  The proceeds and/or avails of the Collateral, or any part thereof, and the proceeds and the avails of any remedy hereunder (as well as any other amounts of any
kind held by Collateral Agent at the time of, or received by Collateral Agent after, the occurrence of an Event of Default) shall be paid to and applied as follows:

 

(i)      First, to the payment of reasonable costs and expenses, including all amounts expended to preserve the value of the Collateral, of foreclosure or suit, if any, and of such sale and the exercise of any other rights or remedies, and of
all proper fees, expenses, liability and advances, including reasonable legal expenses and attorneys’ fees, incurred or made hereunder by Collateral Agent;

 

(ii)    Second, to the payment to each Investor of the amount then owing or unpaid on such Investor’s Note, and in case such proceeds shall be insufficient to pay in full the whole amount so due, owing or unpaid upon such Note, then its Pro Rata
Share of the amount remaining to be distributed (to be applied first to accrued interest and second to outstanding principal);

 

(iii)   Third, to the payment of other amounts then payable to each Investor under any of the Transaction Documents, and in case such proceeds shall be insufficient to pay in full the whole amount so due, owing or unpaid under such Transaction Documents, then its
Pro Rata Share of the amount remaining to be distributed; and

  

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(iv)   Fourth, to the payment of the surplus, if any, to Company, its successors and assigns, or to whomsoever may be lawfully entitled to receive the same.

 

For purposes of this Security Agreement, the term “Pro Rata Share” shall mean, when calculating a Investor’s portion of any distribution or amount, that distribution or amount (expressed as a percentage) equal to a fraction (i) the numerator of which is the original outstanding principal amount of such Investor’s Note
and (ii) the denominator of which is the original aggregate outstanding principal amount of all Notes issued under the Purchase Agreement.  In the event that a Investor receives payments or distributions in excess of its Pro Rata Share, then such Investor shall hold in trust all such excess payments or distributions for the benefit of the other Investors and shall pay such amounts held in trust to such other Investors upon demand by such Investors.

 

7.           Collateral Agent.

 

(a)           Appointment.  The Investors hereby appoint Sasha Cucuz as collateral agent for the Investors under this Security Agreement (in such capacity, the “Collateral
Agent”) to serve from the date hereof until the termination of the Security Agreement.

 

(b)           Powers and Duties of Collateral Agent, Indemnity by Investors.

 

(i)     Each Investor hereby irrevocably authorizes the Collateral Agent to take such action and to exercise such powers hereunder as provided herein or as requested in writing by the Investors of a Majority in Interest (as defined in the Notes) in accordance with the terms hereof, together with such powers as are
reasonably incidental thereto.  Collateral Agent may execute any of its duties hereunder by or through agents or employees and shall be entitled to request and act in reliance upon the advise of counsel concerning all matters pertaining to its duties hereunder and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance therewith.

 

(ii)    Neither the Collateral Agent nor any of its directors, officers or employees shall be liable or responsible to any Investor or to Company for any action taken or omitted to be taken by Collateral Agent or any other such person hereunder or under any related agreement, instrument or document, except in the case
of gross negligence or willful misconduct on the part of the Collateral Agent, nor shall the Collateral Agent or any of its directors, officers or employees be liable or responsible for (i) the validity, effectiveness, sufficiency, enforceability or enforcement of the Notes, this Security Agreement or any instrument or document delivered hereunder or relating hereto; (ii) the title of Company to any of the Collateral or the freedom of any of the Collateral from any prior or other liens or security interests;
(iii) the determination, verification or enforcement of Company’s compliance with any of the terms and conditions of this Security Agreement; (iv) the failure by Company to deliver any instrument  or document required to be delivered pursuant to the terms hereof; or (v) the receipt, disbursement, waiver, extension or other handling of payments or proceeds made or received with respect to the collateral, the servicing of the Collateral or the enforcement or the collection of any
amounts owing with respect to the Collateral.

  

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(iii)   In the case of this Security Agreement and the transactions contemplated hereby and any related document relating to any of the Collateral, each of the Investors agrees to pay to the Collateral Agent, on demand, its Pro Rata Share of all fees and all expenses incurred in connection with the operation and enforcement
of this Security Agreement, the Notes or any related agreement to the extent that such fees or expenses have not been paid by Company.  In the case of this Security Agreement  and each instrument and document relating to any of the Collateral, each of the Investors and the Company hereby agrees to hold the Collateral Agent harmless, and to indemnify the Collateral Agent from and against any and all loss, damage, expense or liability which may be incurred by the Collateral Agent under this
Security Agreement and the transactions contemplated hereby and any related agreement or other instrument or document, as the case may be, unless such liability shall be caused by the willful misconduct or gross negligence of the Collateral Agent.

 

(c)           Resignation; Successor.

 

(i)     Collateral Agent may resign upon 15 days prior written notice to the Investors (unless such notice is waived by a Majority in Interest) and Company (provided that notice to the Company will not be required if an Event of Default exists or such notice is waived by Company).  If Collateral Agent
resigns under this Agreement, a Majority in Interest shall be entitled, (so long as no Event of Default has occurred and is continuing) with the consent of Company (such consent not to be unreasonably withheld, delayed, or conditioned), to appoint a successor Collateral Agent for the Investors.

 

(ii)    If no successor Collateral Agent is appointed prior to the effective date of the resignation of Collateral Agent, Collateral Agent may appoint, after consulting with the Investors and Company, a successor Collateral Agent.  If Collateral Agent has materially breached or failed to perform any material
provision of this Agreement or of applicable law, a Majority in Interest may agree in writing to remove and replace Collateral Agent with a successor Collateral Agent from among the Investors (so long as no Event of Default has occurred and is continuing) with the consent of Company (such consent not to be unreasonably withheld, delayed, or conditioned).

 

(iii)   In any such event, upon the acceptance of his, her or its appointment as successor Collateral Agent hereunder, such successor Collateral Agent shall succeed to all the rights, powers, and duties of the retiring Collateral Agent and the term "Collateral Agent" shall mean such successor Collateral Agent, and the retiring
Collateral Agent's appointment, powers, and duties as Collateral Agent shall be terminated.  After any retiring Collateral Agent's resignation hereunder as Collateral Agent, the provisions of this Section 7 shall inure to its benefit as to any actions taken or omitted to be taken by him, her or it while it was Collateral Agent under this Agreement.  If no successor Collateral Agent has accepted appointment as Collateral Agent by the date which is 15 days following a retiring Collateral Agent's
notice of resignation, the retiring Collateral Agent's resignation shall nevertheless thereupon become effective and the Investors shall perform all of the duties of Collateral Agent hereunder until such time, if any, as the Investors appoint a successor Collateral Agent, as provided for above.

 

(iv)  Notwithstanding the foregoing, in the event that the initial Collateral Agent or his employer is reasonably likely to have a conflict of interest as a result of his role as Collateral Agent, then Collateral Agent may resign, effective immediately upon written notice to the Investors and Company (provided that notice to
the Company will not be required if an Event of Default exists or such notice is waived by Company).

  

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8.             Miscellaneous.

 

(a)           Notices.  Except as otherwise provided herein, all notices, requests, demands, consents, instructions or other communications to or upon Company or Collateral Agent under this Security Agreement shall
be in writing and faxed, mailed or delivered to each party to the facsimile number or its address set forth below (or to such other facsimile number or address as the recipient of any notice shall have notified the other in writing).  All such notices and communications shall be effective (a) when sent by Federal Express or other overnight service of recognized standing, on the business day following the deposit with such service; (b) when mailed, by registered or certified mail, first class postage
prepaid and addressed as aforesaid through the United States Postal Service, upon receipt; (c) when delivered by hand, upon delivery; and (d) when faxed, upon confirmation of receipt.

 

	
Collateral Agent:
	  	  	  
	  	  	
Sasha Cucuz
	  
	  	  	
5090 Explorer Dr., suite 203
	  
	
 
	  	Mississauga, ON L4W 4T9	  
	  	  	
Telephone:
	
416-322-9700 x520
	  
	
Company:
	  	  	  
	  	  	
President
	  
	  	  	
OccuLogix, Inc.
	  
	  	  	
11025 Roselle Street, Suite 100
	  
	
 
	  	San Diego, CA  92121	  
	  	  	
Telephone:
	
(858) 794-1400
	  
	  	  	
Facsimile:
	
(858) 794-1493
	  
	
with a copy to:
	  	  	  
	  	  	
Martin J. Waters
	  
	  	  	
Wilson Sonsini Goodrich & Rosati, P.C.
	  
	  	  	
12235 El Camino Real, Suite 200
	  
	  	  	
San Diego, CA  92130
	  
	  	  	
Telephone:
	
(858) 350-2308
	  
	  	  	
Facsimile:
	
(858) 350-2399
	  

 

(b)           Termination of Security Interest.  Upon the payment in full of all Obligations including conversion pursuant to the terms of the Notes and the cancellation or termination of any commitment to purchase
Notes under the Purchase Agreement, the security interest granted herein shall terminate and all rights to the Collateral shall revert to Company.  Upon such termination Collateral Agent hereby authorizes Company to file any UCC termination statements necessary to effect such termination and Collateral Agent will, at Company’s expense, execute and deliver to Company any additional documents or instruments as Company shall reasonably request to evidence such termination.

  

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(c)           Nonwaiver.  No failure or delay on Collateral Agent’s part in exercising any right hereunder shall operate as a waiver thereof or of any other right nor shall any single or partial exercise
of any such right preclude any other further exercise thereof or of any other right.

 

(d)           Amendments and Waivers.  This Security Agreement may not be amended or modified, nor may any of its terms be waived, except by written instruments signed by Company and Collateral Agent.  Each
waiver or consent under any provision hereof shall be effective only in the specific instances for the purpose for which given.

 

(e)           Assignments.  This Security Agreement shall be binding upon and inure to the benefit of Collateral Agent and Company and their respective successors and assigns; provided, however,
that Company may not sell, assign or delegate rights and obligations hereunder without the prior written consent of Collateral Agent.

 

(f)           Cumulative Rights, etc.  The rights, powers and remedies of Collateral Agent under this Security Agreement shall be in addition to all rights, powers and remedies given to Collateral Agent by virtue
of any applicable law, rule or regulation of any governmental authority, any Transaction Document or any other agreement, all of which rights, powers, and remedies shall be cumulative and may be exercised successively or concurrently without impairing Collateral Agent’s rights hereunder.  Company waives any right to require Collateral Agent to proceed against any person or entity or to exhaust any Collateral or to pursue any remedy in Collateral Agent’s power.

 

(g)           Payments Free of Taxes, Etc.  All payments made by Company under the Transaction Documents shall be made by Company free and clear of and without deduction for any and all present and future taxes,
levies, charges, deductions and withholdings.  In addition, Company shall pay upon demand any stamp or other taxes, levies or charges of any jurisdiction with respect to the execution, delivery, registration, performance and enforcement of this Security Agreement.  Upon request by Collateral Agent, Company shall furnish evidence satisfactory to Collateral Agent that all requisite authorizations and approvals by, and notices to and filings with, governmental authorities and regulatory bodies
have been obtained and made and that all requisite taxes, levies and charges have been paid.

 

(h)           Partial Invalidity.  If at any time any provision of this Security Agreement is or becomes illegal, invalid or unenforceable in any respect under the law or any jurisdiction, neither the legality,
validity or enforceability of the remaining provisions of this Security Agreement nor the legality, validity or enforceability of such provision under the law of any other jurisdiction shall in any way be affected or impaired thereby.

 

(i)           Construction.  Each of this Security Agreement and the other Transaction Documents is the result of negotiations among, and has been reviewed by, Company, Investors, Collateral Agent and their respective
counsel.  Accordingly, this Security Agreement shall be deemed to be the product of all parties hereto, and no ambiguity shall be construed in favor of or against Company, Investors or Collateral Agent.

  

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(j)           Entire Agreement.  This Security Agreement taken together with the other Transaction Documents constitute and contain the entire agreement of Company, Investors and Collateral Agent and supersede
any and all prior agreements, negotiations, correspondence, understandings and communications among the parties, whether written or oral, respecting the subject matter hereof.

 

(k)           Other Interpretive Provisions.   References in this Security Agreement and each of the other Transaction Documents to any document, instrument or agreement (a) includes all exhibits, schedules
and other attachments thereto, (b) includes all documents, instruments or agreements issued or executed in replacement thereof, and (c) means such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified and supplemented from time to time and in effect at any given time.  The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Security Agreement or any other Transaction Document refer
to this Security Agreement or such other Transaction Document, as the case may be, as a whole and not to any particular provision of this Security Agreement or such other Transaction Document, as the case may be.  The words “include” and “including” and words of similar import when used in this Security Agreement or any other Transaction Document shall not be construed to be limiting or exclusive.

 

(l)            Governing Law.  This Security Agreement shall be governed by and construed in accordance with the laws of the State of New York without reference to conflicts of law rules (except to the extent governed
by the UCC).

 

(m)           Counterparts. This Security Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall be deemed to constitute one instrument.

 

[The remainder of this page is intentionally left blank]

  

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IN WITNESS WHEREOF, Company has caused this Security Agreement to be executed as of the day and year first above written.

 

	  	
OccuLogix, Inc. (dba TearLab Corporation)

	 	 
	  	
By:
	
/s/ William Dumencu

	  	
Name: William Dumencu

	  	
Title: CFO

 

AGREED:

 

COLLATERAL AGENT

 

/s/ Sasha Cucuz,

As Collateral Agent

 

INVESTOR

By: /s/ John Cornish

Holder Name: John Cornish

By: /s/ John Cornish

Name: John Cornish Properties Corporation

If signing on behalf of an entity:

Name: John Cornish

Title: President

By: /s/ Sunil Dattani

Holder Name: Sunil Dattani

By: /s/ Alfonso Principato

Holder Name: Alfonso Principato

By: /s/ Mary Pejic

Holder Name: Mary Pejic

By: /s/ John Fredricks

Holder Name: John Fredricks

  

  

  

By: /s/ Janet E. Wright

Holder Name: Janet E. Wright

By: /s/ Brock J. Wright

Holder Name: Brock J. Wright

By: /s/ Tyler S. Forbes

Holder Name: Tyler S. Forbes

By: /s/ David A. Hall , Cindy L. Hall

Holder Name: David A. Hall, Cindy L. Hall

By: /s/ Jim Schumer

Holder Name: Jim Schumer

By: /s/ Tom Davidson

Holder Name: Tom Davidson, RLT UTD 8/27/90

If signing on behalf of an entity:

Name: Tom Davidson

Title: Trustee

By: /s/ Ryan Selwood

Holder Name: Ryan Selwood

By: /s/ Jim Fasano

Holder Name: Jim Fasano

By: /s/ Hafiz Lalani

Holder Name: Hafiz Lalani

By: /s/ Tony Morgan

Holder Name: Tony Morgan

By: /s/ Glenys White

Holder Name: Glenys White

By: /s/ Lynn Warheit

Holder Name: Lynn Warheit

  

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By: /s/ Peter C. Meinig

Holder Name: Peter C. Meinig Revocable Trust

If signing on behalf of an entity:

Name: Peter C. Meinig

Title: Trustee

By: /s/ Elias Vamvakas

Holder Name: Greybrook Corporation

If signing on behalf of an entity:

Name: Elias Vamvakas

Title: President

By: /s/ Richard Lindstrom

Holder Name: Lindstrom Family LP

If signing on behalf of an entity:

Name: Richard Lindstrom

Title: Trustee

 

By: /s/ WS Investment Company (2009A)

Holder Name: WS Investment Company

If signing on behalf of an entity:

Name: James Terranova

Title: Director, WS Investments

  

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ATTACHMENT 1

 

TO SECURITY AGREEMENT

 

All right, title, interest, claims and demands of Company in and to the following property:

    (i)        All Accounts;

   (ii)        All Chattel Paper;

  (iii)        All Commercial Tort Claims listed on Exhibit A;

  (iv)       All Deposit Accounts and cash;

   (v)       All Documents;

  (vi)       All Equipment;

 (vii)       All General Intangibles;

(viii)       All Goods;

   (ix)       All Instruments;

    (x)       All Intellectual Property;

   (xi)       All Inventory;

  (xii)       All Investment Property;

 (xiii)       All Letter-of-Credit Rights

 (xiv)       To the extent not otherwise included, all Proceeds and products of any and all of the foregoing, and all accessions to, substitutions and replacements for, and rents and profits of each of the foregoing.

 

The term “Intellectual Property” means all intellectual and similar property of every kind and nature now owned or hereafter acquired by Company, including inventions, designs, patents (whether registered or unregistered),
copyrights (whether registered or unregistered), trademarks (whether registered or unregistered), trade secrets, domain names, confidential or proprietary technical and business information, know-how, methods, processes, drawings, specifications or other data or information and all memoranda, notes and records with respect to any research and development, software and databases and all embodiments or fixations thereof whether in tangible or intangible form or contained on magnetic media readable by machine together
with all such magnetic media and related documentation, registrations and franchises, and all additions, improvements and accessions to, and books and records describing or used in connection with, any of the foregoing. Company inventory that is currently being used in the Company’s clinical trials will not be included in the definition of “Collateral.”

 

All capitalized terms used in this Attachment 1 and not otherwise defined herein, shall have the respective meanings given to such terms in the Uniform Commercial Code of the State of California as in effect from time to time.

  

  

  

 

Exhibit A

 

to

 

Attachment 1 to Security Agreement

 

Commercial Tort Claims

  

  

  

 

SCHEDULE B

TO SECURITY AGREEMENT

 

COMPANY PROFILE

 

1.           Name.  The legal name of Company is and the address of its chief executive office is:

 

OccuLogix, Inc dba TearLab Corp.

 

Chairman & CEO – Elias Vamvakas – 11025 Roselle St., Suite 100 San Diego CA 92121

 

2.           Organizational Identification Number; Federal Employer Identification Number.

 

3.           State of Incorporation; Prior Names.  Company was incorporated on December 13, 1996 in the state of Delaware.  Since
its incorporation Company has had the following legal names (other than its current legal name):

 

	  	  	
Date Company’s Name

	
Prior Name
	  	
Was Changed From Such Name

	 	 	 
	
Vascular Sciences Corporation
	  	
July 2004

	 	 	 
	
OccuLogix Corporation
	  	
July 2002 (merged with newly created Vascular Sciences Corporation)

	 	 	 
	
Rheologix Corp. of America
	  	
Jan. 1999

 

 

4.           Company does business under the following trade names:

 

	
Trade Name
	
Is This Name Registered?
	
Registration No.
	
Registration Date

	 	 	 	 
	
TearLab Corporation
	
Yes
	
2009-000694
	
Jan 08, 2009

	
 
	  	
(registered in San Diego County)
	  

 

5.           Place of Business.  Company has the following places of business:

 

	  	
Brief Description

	
Address
	
Owner of Location
	
of Assets and Value

	 	 	 
	
11025 Roselle St., Suite 100, San Diego CA 92121
	
Leased premises
	
Office, computer, lab and medical equipment

 

6.           Assets in Possession of Third Parties.  The following are names and addresses of all persons or entities other than Company, such as lessees, consignees, warehousemen or purchasers
of chattel paper, which have possession or are intended to have possession of any of the Collateral consisting of instruments, chattel paper, inventory or equipment:

  

  

  

 

	
Name
	
Mailing Address
	
County
	
State

	 	 	 	 
	
Delphi
	  	  	  

 

7.           Qualification To Do Business.  Company is qualified to do business in the following states:

 

        California and Delaware

 

8.           Existing Security Interests.  Company’s assets are subject to the following security interest of Persons other than the Collateral Agent:

 

	
Assets
	
Name of Investor

	 	 
	
N/A
	  

 

9.           Tax Assessments.  The following tax assessments are currently outstanding and unpaid:

 

	
Assessing Authority
	
Amount and Description

	 	 
	
N/A
	  

 

10.           Guaranties.  Company has directly or indirectly guaranteed the following obligations of third parties:

 

	
Investor
	
Amount
	
Company

	 	 	 
	
N/A
	  	  

 

11.         Subsidiaries.  Company has the following subsidiaries (list jurisdiction and date of incorporation, federal employer identification number,
type and value of assets):

 

TearLab, Inc., incorporated in Delaware on Jan.7, 2003 Primary assets are    intellectual property as included in audited financial statements files with the SEC.

 

OccuLogix, Holdings Inc., incorporated in Delaware on July 8, 2002 Primary assets are the ownership interests in two somewhat inactive subsidiaries - OccuLogix Canada Corp. and OccuLogix LLC

 

 

12.         Securities; Instruments.  The following is a complete list of all stocks, bonds, debentures, notes and other securities and investment
property owned by Company (provide name of issuer, whether certificated or uncertificated, certificate no. (if applicable), number of shares):

 

N/A

  

  

  

 

13.        Bank Accounts; Securities Accounts.  The following is a complete list of all bank
accounts and securities accounts maintained by Company (provide name and address of depository bank (or brokerage firm), type of account and account number):

 

Bank of America:

 

             US$ Operating Account -

 

Royal Bank of Canada:

 

             Cdn.$ Operating Account-

 

             US$ Operating Account   -

 

             Cdn.$ Payroll clearing Account -

 

Wells Fargo:

 

             US$ Operating Account -

 

             US$ Merchant Account  -

 

            AUD$ Operating Account -

 

14.        Commercial Tort Claims.  The following is a complete list of all commercial tort claims held by Company:

 

N/Aex10_5.htm

[letterhead]

Exhibit 10.5

July 15, 2009

Via E-mail

[Director or Affiliate Name]

Re:           Bridge Financing Letter Agreement

Dear [Name]:

 

Reference is made to the OccuLogix, Inc., dba TearLab Corporation (the “Company”) bridge note financing (the “Financing”) pursuant to the Securities Purchase Agreement, 12% Convertible Notes (the “Notes”),
Warrant, and Security Agreement.  Capitalized terms used herein but not otherwise defined have the meanings defined in the Note.

 

As you know, after August 31, 2009, the Notes to be issued in the Financing will become convertible into shares of Common Stock of the Company at an Initial Conversion Price that represents a 20% discount to the volume weighted average price of the Common Stock for the ten Trading Days before August 31, 2009; except that the Initial Conversion
Price will not be below $0.25 per share and will not exceed $2.40 per share.  The conversion is subject to certain restrictions, including a provision that the Company will convert only that part of the Notes, on a pro rata basis, which will result in the issuance by the Company of no more than 19.9% of the voting stock of the Company (measured prior to the Financing).

 

Under Nasdaq Listing Rule 5635(c), any sales of discounted stock to employees, officers or directors constitute “equity compensation,” and therefore require stockholder consent prior to issuance.  This is true even though the sale is part of a larger financing, and not aimed at compensating the director.  Because
the Notes convert at a discount, Nasdaq will not allow the Company to issue the Notes to employees, officers or directors unless they agree to defer conversion of their Notes until stockholder approval is obtained.

 

In order to comply with the Nasdaq Listing Rules, the Company is asking you to agree to defer any right to convert your Note into shares of Common Stock unless and until the stockholders have approved the conversion of your Note. The Company agrees to seek stockholder approval for the conversion of all principal and interest of Notes issued
pursuant to the Financing at its next annual stockholder meeting.

 

If you agree with the foregoing, please sign below and return a copy of this letter to the Company at your earliest convenience.  This letter agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement. Facsimile copies of
signed signature pages will be deemed binding originals.

 

	
 
	 Sincerely,
	  	 
	
 
	 OCCULOGIX, INC.
	  	 
	  	 
	
 
	 _________________________________
	
 
	 William Dumencu, Chief Financial Officer

 

*           *           *

AGREED AND ACKNOWLEDGED:

 

By signing below, I agree and acknowledge that if the Financing is consummated on terms set forth in the Financing Documents, I will not convert my Note into shares of Common Stock unless and until the stockholders of the Company have approved such conversion in accordance with Nasdaq rules.

 

 

	  	 ________________________________	 
	
 
	 [Director or Affiliate Name]	 
	
 
	 Date:____________________________

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