On August 9, 2018, TearLab Corporation entered into a manufacturing, supply and development agreement (the "Agreement") with MiniFAB (Aust) Pty Ltd. Pursuant to the terms of the Agreement, MiniFAB will manufacture and supply test cards for the Company's next generation platform, the TearLab Discovery System. The Agreement is exclusive through the first term of 10 years and automatically renews for an additional term of 5 years unless either party cancels. TearLab will pay for 65% of the capital expenditures under the Agreement ("capex") as incurred and MiniFAB will pay for the remaining 35% of capex, which will be recoverable from TearLab through an amortized cost component in the price for the product charged to TearLab once the monthly card volumes reach 200,000 per month. The capex amounts are limited to an aggregate of AUD 1.0 million for the initial development and production phase ("Phase 1") and anticipated to be in the vicinity of AUD 3.0 million for further investment of production capacity ("Phase 2"). In addition, TearLab will be responsible for the payment or reimbursement of all non-recurrent expenditure and tooling, limited to AUD 1.2 million for Phase 1 and estimated at AUD 2.0 million for Phase 2.