Item 1.01. Entry into a Material Definitive Agreement.
Note Purchase Agreement
On February 9, 2021, Nemaura Medical Inc. a
Nevada corporation, together with its following wholly owned subsidiaries: Dermal Diagnostics Limited (“Dermal Diagnostics”),
an England and Wales corporation and Trial Clinic Limited (“Trial Clinic”), an England and Wales corporation (the foregoing
referred to together herein as the “Company”) entered into a Note Purchase Agreement (the “Purchase Agreement”)
with Uptown Capital, LLC, a Utah limited liability company ( the “Lender”) to be effective as of February 8, 2021 (the
“Effective Date’). Pursuant to the Purchase Agreement, the Company agreed to sell, and the Lender agreed to purchase,
a Secured Promissory Note (the “Note”) in the original principal amount of $24,015,000.
The Note carries an original issue discount
of $4,000,000.00 (the “OID”). In addition, pursuant to the Purchase Agreement, the Company agreed to pay $15,000.00
to the Lender to cover the Lender’s legal fees, accounting costs, due diligence, monitoring and other transaction costs incurred
in connection with the purchase and sale of the Note (the “Transaction Expense Amount”), all of which amount is included
in the initial principal balance of the Note. The “Purchase Price,” under the Purchase Agreement, therefore, is $20,000,000.00,
computed as follows: $24,015,000.00 initial principal balance, less the OID, less the Transaction Expense Amount.
The Company has previously issued to Chicago
Venture Partners, L.P. (“CVP”), a promissory note dated April 15, 2020 which is secured by, among other things, a Security
Agreement (“CVP Security Agreement”) dated as of September 14, 2020 pursuant to which Trial Clinic and Dermal Diagnostics
granted to CVP a first-position security interest (intended to have effect as a first fixed charge under English law) to secure
all “Obligations” (as such term is defined in the CVP Security Agreement). Pursuant to an Assignment and Assumption
Agreement dated as of December 30, 2020, CVP assigned to the Lender (then named Irving Park Capital, LLC) all its rights under
the promissory note dated April 15, 2020 and all documents related to the promissory note including, without limitation, the CVP
Security Agreement. Pursuant to the Note Purchase Agreement, each the Lender, Trial Clinic and Dermal Diagnostics agreed that Trial
Clinic’s and Dermal Diagnostics’ obligations under the Note Purchase Agreement are “Obligations” (as such
term is defined in the CVP Security Agreement) and are secured by the CVP Security Agreement.
Pursuant to the Purchase Agreement, the Company
agreed that until all of the obligations under the Note ae paid and performed in full, that: (i) the Company will timely file on
the applicable deadline all reports required to be filed with the Securities and Exchange Commission (the “SEC”) pursuant
to Sections 13 or 15(d) of the 1934 Act, as amended (the “1934 Act”) and take all reasonable action under its control
to ensure that adequate current public information with respect to Company, as required in accordance with Rule 144 of the Securities
Act of 1933, as amended, is publicly available, and will not terminate its status as an issuer required to file reports under the
1934 Act even if the 1934 Act or the rules and regulations thereunder would permit such termination; (ii) the Company’s common
stock will be listed or quoted for trading on any of (a) NYSE, (b) NASDAQ, (c) OTCQX, or (d) OTCQB; (iii) trading in the Company’s
common stock will not, for a period of fifteen (15) consecutive days, be suspended, halted, chilled, frozen, reach zero bid or
otherwise cease trading on the Company’s principal trading market; (iv) the Company will not enter into any financing transaction
with a certain party as set forth in the Purchase Agreement or any entity owned by or affiliated with such certain party; (v) if
the Company purchases a specific target company (the “Target”) by July 1, 2021, Company will cause such Target to guarantee
repayment of the Note using a form of guaranty designated by the Lender and (vi) if Company does not purchase such Target by July
1, 2021, then the Company will cause all companies purchased by Company after February 8, 2021, until the Note is paid in full
to guarantee repayment of the Note using a form of guaranty designated by the Lender.
The Note Purchase Agreement contains customary
representations, warranties and covenants. The foregoing description of the material terms of the Purchase Agreement is not complete
and is qualified in its entirety by reference to the full text thereof, a copy of which is filed herewith as Exhibit 10.1 to this
Current Report on Form 8-K and is incorporated herein by reference.
Promissory Note
On February 9, 2021, the Company issued the
Note to the Lender to be effective as of the Effective Date. The Note carries an OID of $4,000,000.00. The maturity date of the
Note is twenty-four (24) months after the date the purchase price for the Note was delivered by the Company to the Lender (the
“Purchase Price Date”). Further, pursuant to the Note, beginning on March 1, 2021 and continuing on the first day of
each month thereafter until the Note has been paid in full, a monitoring fee equal to 0.833% of the then current outstanding balance
under the Note will automatically be added to the outstanding balance under the Note.
The Note can be prepaid by the Company at any
time, and if the Company chooses to prepay the Note, the Company will have to pay the Lender an amount of cash equal to 100% multiplied
by the portion of the outstanding balance of the Note that the Company elects to prepay. The Note is secured by the collateral
set forth in the Security Agreement, as further described below. Beginning on the date that is six (6) months after the Purchase
Price Date, the Lender will have the right, exercisable at any time in its sole and absolute discretion, to redeem any amount of
the Note (the “Redemption Amount”) up to $400,000.00 per month until January 31, 2022 and $2,000,000.00 per month thereafter
(the “Maximum Monthly Redemption Amount”) per calendar month by providing written notice to the Company (each, a “Redemption
Notice”). The Lender may submit to the Company one (1) or more Redemption Notices in any given calendar month so long as
the aggregate amount being redeemed in such month does not exceed the Maximum Monthly Redemption Amount. Upon receipt of any Redemption
Notice, the Company shall pay the applicable Redemption Amount in cash to Lender within five (5) trading days of the Company’s
receipt of such Redemption Notice.
If at any time while the Note is outstanding,
there is an “Event of Default” as such term is defined in the Note, under the Note, the Lender will have the right
to accelerate the Note by written notice to the Company, with the then outstanding balance becoming immediately due and payable
in cash at the “Mandatory Default Amount.” “Mandatory Default Amount” is defined in the Note as the outstanding
balance of the Note following the application of the Default Effect. “Default Effect” is defined in the Note as multiplying
the outstanding balance of the Note as of the date the Event of Default occurred by ten percent (10%). Notwithstanding the foregoing,
at any time following the occurrence of any Event of Default, the Lender may, at its option, elect to increase the outstanding
balance of the Note by applying the Default Effect, subject to certain limitations as set forth in the Note, via written notice
to the Company without accelerating the outstanding balance of the Note, in which event the outstanding balance of the Note shall
be increased as of the date of the occurrence of the applicable Event of Default pursuant to the Default Effect, but the outstanding
balance will not be immediately due and payable unless so declared by the Lender.
If the Lender elects to apply the Default Effect,
it will reserve the right to declare the outstanding balance of the Note immediately due and payable at any time and no such election
by the Lender shall be deemed to be a waiver of its right to declare the outstanding balance of the Note immediately due. Notwithstanding
the foregoing, upon the occurrence of certain Events of Default, as set forth in the Note, the outstanding balance of the Note
as of the date of acceleration shall become immediately and automatically due and payable in cash at the Mandatory Default Amount,
without any written notice required by the Lender. At any time following the occurrence of any Event of Default, upon written notice
given by the Lender to the Company, monitoring fees shall accrue on the outstanding balance of the Note beginning on the date the
applicable Event of Default occurred at a rate equal to the lesser of twenty-two percent (22%) per annum or the maximum rate permitted
under applicable law.
The foregoing description of the material terms
of the Note is not complete and is qualified in its entirety by reference to the full text thereof, a copy of which is filed herewith
as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
Security Agreement
On February 9, 2021, the Company entered into
a Security Agreement (the “Security Agreement’) with the Lender to be effective as of the Effective Date. Pursuant
to the Security Agreement, the Company granted to the Lender, a first-position security interest under U.S. law and a first fixed
charge under English law, as applicable, in all right, title, interest, claims and demands of the Company in and to the property
described in Schedule A to the Security Agreement, and all replacements, proceeds, products, and accessions thereof (collectively,
the “Collateral”) as security for the obligations of the Company under the Note and to induce the Lender to extend
the credit evidenced by the Note.
The Collateral includes, but is not limited
to: (i) all equity interests in all wholly or partially owned subsidiaries of the Company (ii) all customer accounts, insurance
contracts, and clients underlying such insurance contracts of the Company (iii) all goods and equipment now owned or hereafter
acquired by the Company, including, without limitation, all laboratory equipment, growing equipment, computer equipment, office
equipment, machinery, containers, fixtures, vehicles, and any interest in any of the foregoing, and all attachments, accessories,
accessions, replacements, substitutions, additions, and improvements to any of the foregoing, wherever located (iv) all inventory
now owned or hereafter acquired by the Company, including, without limitation, all merchandise, raw materials, parts, supplies,
packing and shipping materials, work in process and finished products including such inventory as is temporarily out of the Company’s
custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds,
resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and the
Company’s books relating to any of the foregoing and (v) all accounts receivable, revenues or royalties, contract rights,
general intangibles, healthcare insurance receivables, payment intangibles and commercial tort claims, now owned by the Company
or hereafter acquired, including, without limitation, all patents, patent rights and patent applications.
As discussed above, the Company has previously
issued to CVP, a promissory note dated April 15, 2020 which is secured by, among other things, the CVP Security Agreement dated
as of September 14, 2020 pursuant to which Trial Clinic and Dermal Diagnostics granted to CVP a first-position security interest
(intended to have effect as a first fixed charge under English law) to secure all “Obligations” (as defined in the
CVP Security Agreement) and pursuant to an Assignment and Assumption Agreement dated as of December 30, 2020, CVP assigned to the
Lender all its rights under the promissory note dated April 15, 2020 and all documents related to the promissory note including,
without limitation, the CVP Security Agreement. Pursuant to the Security Agreement, each the Lender, Trial Clinic and Dermal Diagnostics
agreed that Trial Clinic’s and Dermal Diagnostics’ obligations under the Note Purchase Agreement are “Obligations”
(as defined in the CVP Security Agreement) and are secured by the CVP Security Agreement.
The Security Agreement contains customary representations,
warranties and covenants of the Company. The foregoing description of the material terms of the Security Agreement is not complete
and is qualified in its entirety by reference to the full text thereof, a copy of which is filed herewith as Exhibit 10.3 to this
Current Report on Form 8-K and is incorporated herein by reference.