Item 1.01. Entry Into a Material Definitive Agreement.





Merger Agreement

On May 11, 2020, TearLab Corporation, a Delaware corporation (the "Company"), entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among the Company, Accelmed Partners II LP, a Cayman Islands exempted limited partnership ("Buyer"), and Accelmed Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Buyer ("Merger Sub"). The Merger Agreement provides that, subject to the terms and conditions set forth therein, Merger Sub will merge with and into the Company (the "Merger"), with the Company surviving the Merger and becoming a wholly owned subsidiary of Buyer. Capitalized terms used herein but not otherwise defined have the meaning set forth in the Merger Agreement.

The terms of the Merger Agreement provide that, unless otherwise specified in the Merger Agreement, at the effective time of the Merger (the "Effective Time"), each issued and outstanding share of common stock and preferred stock of the Company will be canceled and converted into the right to receive an amount equal to $0.0586 per share in cash (other than (a) shares that are then owned by Buyer, Merger Sub, certain affiliate funds of CRG L.P. ("CRG"), or any of their respective Affiliates, or (b) shares that are then owned by the Company or any of its subsidiaries).

The terms of the Merger Agreement also provide that each stock option of the Company that is outstanding and unexercised immediately prior to the Effective Time, whether or not then vested or exercisable, will be cancelled without any consideration payable therefor and each holder of such stock options will cease to have any rights with respect to such stock options.

The terms of the Merger Agreement also provide that each warrant to purchase stock of the Company will be cancelled and terminated and of no further force or effect.

The Merger and the Merger Agreement have been approved by the board of directors of the Company.

Completion of the transaction is subject to closing conditions set forth in Article VI of the Merger Agreement, including (i) the absence of any order, judgment or decree by any governmental entity that has the effect of making the transactions contemplated by the Merger Agreement illegal, otherwise restraining or prohibiting the consummation of such transactions or causing any of such transactions to be rescinded following completion, (ii) subject to certain exceptions, the accuracy of each party's representations and warranties, (iii) compliance in all material respects by each party with its obligations under the Merger Agreement, (iv) that the Amendment (as defined below) is in full force and effect, (v) achievement of certain threshold figures for free cash and transaction expenses of the Company, (vi) the amendment of certain employee agreements, and (vii) a minimum number of shares subject to appraisal claims under applicable law. The transaction is not subject to a financing condition.

The Merger Agreement contains customary representations and warranties of both the Company and Buyer. The Company has also agreed to customary covenants regarding the operation of the Company and its subsidiaries prior to the closing of the Merger, including covenants not to, during the pendency of the Merger, solicit alternative transactions or, subject to certain exceptions, enter into discussions concerning, or provide confidential information in connection with, an alternative transaction.

The Merger Agreement contains certain customary termination rights for the Company and Buyer, including a right for either party to terminate the Merger Agreement if the Merger is not completed by August 31, 2020. The Merger Agreement further provides that, upon termination of the Merger Agreement under certain specified circumstances, the Company will be obligated to pay Buyer a termination fee of $500,000. Additionally, Buyer will have the right to terminate the Merger Agreement under certain circumstances in connection with its due diligence findings or, subject to the payment to the Company of a . . .

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01, "Entry into a Material Definitive Agreement, Amendment to Loan Agreement and Trigger Exchange Agreement" is incorporated herein by reference.

Item 2.04. Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

The information set forth under Item 1.01, "Entry into a Material Definitive Agreement, Amendment to Loan Agreement and Trigger Exchange Agreement" is incorporated herein by reference.

Item 3.02. Unregistered Sales of Equity Securities.

The information set forth in Item 1.01 above with respect to the issuance of shares of common stock to the affiliate funds of CRG is incorporated into this Item 3.02 by reference. Such shares of common stock will, when issued, not be registered under the Securities Act of 1933, as amended (the "Securities Act") or any state securities laws and will be issued in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act, or in the case of the shares of common stock of the Company issued pursuant to the Trigger Exchange Agreement, under Section 3(a)(9) of the Securities Act.

Item 5.01. Change in Control of Registrant.

The information set forth in Item 1.01 above with respect to the issuance of shares of common stock to certain affiliates of CRG is incorporated into this Item 5.01 by reference.




Item 8.01. Other Events.

On May 11, 2020, the Company issued a press release announcing the entry into the Merger Agreement. A copy of the press release is filed as Exhibit 99.1 hereto and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.





(d) Exhibits



Exhibit Number                              Description
     2.1           Agreement and Plan of Merger, dated May 11, 2020, by and among
                 Buyer, Merger Sub, and the Company *
     10.1          Consent and Amendment No. 9 to Term Loan Agreement, dated May
                 11, 2020
     10.2          Trigger Exchange Agreement, dated May 11, 2020
     99.1          Press release, dated May 11, 2020

* The schedules to the Agreement and Plan of Merger have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. The Company will furnish copies of any such schedules to the U.S. Securities and Exchange Commission upon request.

Cautionary Note Regarding Forward-Looking Statements

This announcement contains forward-looking statements (including within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended) concerning the Company and Buyer. These statements include, but are not limited to, statements regarding the expected completion and timing of the proposed transaction, expected benefits and costs of the proposed transaction, and management plans relating to the proposed transaction, and statements that address each company's expected future business and financial performance and other statements identified by words such as "will", "expect", "believe", "anticipate", "estimate", "should", "intend", "plan", "potential", "predict" "project", "aim", and similar words, phrases or expressions. These forward-looking statements are based on current expectations and beliefs of the management of the Company and Buyer (as the case may be), as well as assumptions made by, and information currently available to, such management, current market trends and market conditions and involve risks and uncertainties, many of which are outside of each company's and each company's management's control, and which may cause actual results to differ materially from those contained in forward-looking statements. Accordingly, you should not place undue reliance on such statements.

Those risks, uncertainties and assumptions include: the risk that the proposed transaction may not be completed in a timely manner or at all, which may adversely affect the Company's business and the price of the common stock of the Company; the failure to satisfy any of the conditions to the consummation of the proposed transaction; the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; the effect of the announcement or pendency of the proposed transaction on the Company's business relationships, operating results and business generally; risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the proposed transaction; risks related to diverting management's attention from ongoing business operations; the outcome of any legal proceedings that may be instituted related to the Merger Agreement or the proposed transaction; unexpected costs, charges or expenses resulting from the proposed transaction; and other risks described in the Company's filings with the United States Securities and Exchange Commission, such as Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K.

Forward-looking statements speak only as of the date of this communication. Neither the Company nor Buyer undertake any intent or obligation to publicly update or revise any of the estimates and other forward-looking statements made in this announcement, whether as a result of new information, future events or otherwise, except as required by law.

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