Exhibit 10.2

 

 

 

SECURED PROMISSORY NOTE

 

Effective Date: April 15, 2020 U.S. $6,015,000.00

 

FOR VALUE RECEIVED, NEMAURA MEDICAL INC., a Nevada corporation (“Company”),
DERMAL DIAGNOSTICS LIMITED, an England and Wales corporation (“Dermal
Diagnostics”), and TRIAL CLINIC LIMITED, an England and Wales corporation
(“Trial Clinic,” and together with Dermal Diagnostics, “Borrower”), jointly and
severally promise to pay to CHICAGO VENTURE PARTNERS, L.P., a Utah limited
partnership, or its successors or assigns (“Lender”), $6,015,000.00 and any
fees, charges, and late fees accrued hereunder on the date that is twenty-four
(24) months after the Purchase Price Date (the “Maturity Date”) in accordance
with the terms set forth herein. This Secured Promissory Note (this “Note”) is
issued and made effective as of April 15, 2020 (the “Effective Date”). This Note
is issued pursuant to that certain Note Purchase Agreement dated April 15, 2020,
as the same may be amended from time to time, by and between Borrower and Lender
(the “Purchase Agreement”). Certain capitalized terms used herein are defined in
Attachment 1 attached hereto and incorporated herein by this reference.

 

This Note carries an OID of $1,000,000.00. In addition, Borrower agrees to pay
$15,000.00 to Lender to cover Lender’s legal fees, accounting costs, due
diligence, monitoring and other transaction costs incurred in connection with
the purchase and sale of this Note (the “Transaction Expense Amount”), all of
which amount is fully earned and included in the initial principal balance of
this Note. The purchase price for this Note shall be $5,000,000.00 (the
“Purchase Price”), computed as follows: $6,015,000.00 original principal
balance, less the OID, less the Transaction Expense Amount. The Purchase Price
shall be payable by Lender by delivery of the Investor Notes (as defined in the
Purchase Agreement) and payment of the Initial Cash Purchase Price (as defined
the Purchase Agreement) by wire transfer of immediately available funds.

 

1.Payment; Prepayment; Monitoring Fee.

 

1.1.           Payment. All payments owing hereunder shall be in lawful money of
the United States of America and delivered to Lender at the address or bank
account furnished to Borrower for that purpose. All payments shall be applied
first to (a) costs of collection, if any, then to (b) fees and charges, if any,
then to (c) accrued and unpaid monitoring fees, and thereafter, to (d)
principal.

 

1.2.           Prepayment. Borrower shall have the right to prepay all or any
portion of the Outstanding Balance. If Borrower exercises its right to prepay
this Note, Borrower shall make payment to Lender of an amount in cash equal to
110% multiplied by the portion of the Outstanding Balance Borrower elects to
repay.

 

1.3.           Monitoring Fee. Beginning on May 1, 2020 and continuing on the
first day of each month thereafter until this Note has been paid in full, a
monitoring fee equal to 0.833% of the then-current Outstanding Balance will
automatically be added to the Outstanding Balance.

 

2.                Security. This Note is secured by the Security Agreement (as
defined in the Purchase Agreement), executed by Borrower in favor of Lender
encumbering the collateral set forth therein, as more specifically set forth in
the Security Agreement, all the terms and conditions of which are hereby
incorporated into and made a part of this Note.

 

3.                Redemption. Beginning on the date that is six (6) months after
the Purchase Price Date, Lender shall have the right, exercisable at any time in
its sole and absolute discretion, to redeem any amount of this Note up to the
Maximum Monthly Redemption Amount (such amount, the “Redemption Amount”) per
calendar month by providing written notice to Borrower (each, a “Redemption
Notice”). For the

 

 

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avoidance of doubt, Lender may submit to Borrower 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, Borrower shall pay the applicable
Redemption Amount in cash to Lender within five (5) Trading Days of Borrower’s
receipt of such Redemption Notice.

 

4.Defaults and Remedies.

 

4.1.           Defaults. The following are events of default under this Note
(each, an “Event of Default”): (a) Borrower fails to pay any principal,
monitoring or other fees, charges, or any other amount when due and payable
hereunder; (b) a receiver, trustee or other similar official shall be appointed
over Borrower or a material part of its assets and such appointment shall remain
uncontested for twenty (20) days or shall not be dismissed or discharged within
sixty (60) days; (c) Borrower becomes insolvent or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any; (d) Borrower makes a general assignment for
the benefit of creditors; (e) Borrower files a petition for relief under any
bankruptcy, insolvency or similar law (domestic or foreign);

(f) an involuntary bankruptcy proceeding is commenced or filed against Borrower;
(g) Borrower or any pledgor, trustor, or guarantor of this Note defaults or
otherwise fails to observe or perform any covenant, obligation, condition or
agreement of Borrower or such pledgor, trustor, or guarantor contained herein or
in any other Transaction Document (as defined in the Purchase Agreement); (h)
the occurrence of a Fundamental Transaction without Lender’s prior written
consent; (i) any representation, warranty or other statement made or furnished
by or on behalf of Borrower or any pledgor, trustor, or guarantor of this Note
to Lender herein, in any Transaction Document, or otherwise in connection with
the issuance of this Note is false, incorrect, incomplete or misleading in any
material respect when made or furnished; and (j) any United States money
judgment, writ or similar process is entered or filed against Borrower or any
subsidiary of Borrower or any of its property or other assets for more than
$1,000,000.00, and shall remain unvacated, unbonded or unstayed for a period of
twenty (20) calendar days unless otherwise consented to by Lender. The
occurrence of any event described above in Section 4.1(g) – (j) shall not be
considered an Event of Default hereunder if such event is cured within fifteen
(15) days of the occurrence thereof.

 

4.2.           Remedies. At any time and from time to time after Lender becomes
aware of the occurrence of any Event of Default, Lender may accelerate this Note
by written notice to Borrower, with the Outstanding Balance becoming immediately
due and payable in cash at the Mandatory Default Amount. Notwithstanding the
foregoing, at any time following the occurrence of any Event of Default, Lender
may, at its option, elect to increase the Outstanding Balance by applying the
Default Effect (subject to the limitation set forth below) via written notice to
Borrower without accelerating the Outstanding Balance, in which event the
Outstanding Balance 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 shall not be immediately due and payable unless so declared by Lender
(for the avoidance of doubt, if Lender elects to apply the Default Effect
pursuant to this sentence, it shall reserve the right to declare the Outstanding
Balance immediately due and payable at any time and no such election by Lender
shall be deemed to be a waiver of its right to declare the Outstanding Balance
immediately due and payable as set forth herein unless otherwise agreed to by
Lender in writing). Notwithstanding the foregoing, upon the occurrence of any
Event of Default described in clauses (b), (c), (d), (e) or (f) of Section 4.1,
the Outstanding Balance 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 Lender. At any time following the
occurrence of any Event of Default, upon written notice given by Lender to
Borrower, monitoring fees shall accrue on the Outstanding Balance 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 (“Default Monitoring Fees”). In connection with acceleration
described herein, Lender need not provide, and Borrower hereby waives, any
presentment, demand, protest or other notice of any kind, and Lender

 

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may immediately and without expiration of any grace period enforce any and all
of its rights and remedies hereunder and all other remedies available to it
under applicable law. Such acceleration may be rescinded and annulled by Lender
at any time prior to payment hereunder and Lender shall have all rights as a
holder of the Note until such time, if any, as Lender receives full payment
pursuant to this Section 4.2. No such rescission or annulment shall affect any
subsequent Event of Default or impair any right consequent thereon. Nothing
herein shall limit Lender’s right to pursue any other remedies available to it
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief.

 

5.                Unconditional Obligation; No Offset. Borrower acknowledges
that this Note is an unconditional, valid, binding and enforceable obligation of
Borrower not subject to offset, deduction or counterclaim of any kind (except as
set forth in Section 16 below). Borrower hereby waives any rights of offset it
now has or may have hereafter against Lender, its successors and assigns, and
agrees to make the payments called for herein in accordance with the terms of
this Note.

 

6.                Waiver. No waiver of any provision of this Note shall be
effective unless it is in the form of a writing signed by the party granting the
waiver. No waiver of any provision or consent to any prohibited action shall
constitute a waiver of any other provision or consent to any other prohibited
action, whether or not similar. No waiver or consent shall constitute a
continuing waiver or consent or commit a party to provide a waiver or consent in
the future except to the extent specifically set forth in writing.

 

7.                Opinion of Counsel. In the event that an opinion of counsel is
needed for any matter related to this Note, Lender has the right to have any
such opinion provided by its counsel.

 

8.                Governing Law; Venue. This Note shall be construed and
enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Note shall be governed by, the
internal laws of the State of Utah, without giving effect to any choice of law
or conflict of law provision or rule (whether of the State of Utah or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Utah. The provisions set forth in the Purchase Agreement
to determine the proper venue for any disputes are incorporated herein by this
reference.

 

9.                Arbitration of Disputes. By its issuance or acceptance of this
Note, each party agrees to be bound by the Arbitration Provisions (as defined in
the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.

 

10.             Cancellation. After repayment of the entire Outstanding Balance,
this Note shall be deemed paid in full, shall automatically be deemed canceled,
and shall not be reissued.

 

11.             Amendments. The prior written consent of both parties hereto
shall be required for any change or amendment to this Note.

 

12.             Assignments. Borrower may not assign this Note without the prior
written consent of Lender. This Note may be offered, sold, assigned or
transferred by Lender without the consent of Borrower, so long as such transfer
is in accordance with applicable federal and state securities laws.

 

13.             Notices. Whenever notice is required to be given under this
Note, unless otherwise provided herein, such notice shall be given in accordance
with the subsection of the Purchase Agreement titled “Notices.”

 

14.             Liquidated Damages. Lender and Borrower agree that in the event
Borrower fails to comply with any of the terms or provisions of this Note,
Lender’s damages would be uncertain and difficult (if not impossible) to
accurately estimate because of the parties’ inability to predict future rates,
future share

 

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prices, future trading volumes and other relevant factors. Accordingly, Lender
and Borrower agree that any fees, balance adjustments, Default Monitoring Fees
or other charges assessed under this Note are not penalties but instead are
intended by the parties to be, and shall be deemed, liquidated damages.

 

15.             Severability. If any part of this Note is construed to be in
violation of any law, such part shall be modified to achieve the objective of
Borrower and Lender to the fullest extent permitted by law and the balance of
this Note shall remain in full force and effect.

 

16.             Offset Rights. Notwithstanding anything to the contrary herein
or in any of the other Transaction Documents, (a) the parties hereto acknowledge
and agree that Lender maintains a right of offset pursuant to the terms of the
Investor Notes that, under certain circumstances, permits Lender to deduct
amounts owed by Borrower under this Note from amounts otherwise owed by Lender
under the Investor Notes (the “Lender Offset Right”), and (b) at any time
Borrower shall be entitled to deduct and offset any amount owing by Lender under
any Investor Note plus the portion of the OID attributable to such Investor Note
from any amount owed by Borrower under this Note (the “Borrower Offset Right”).
In order to exercise the Borrower Offset Right, Borrower must deliver to Lender
written notice of its intent to exercise the Borrower Offset Right. For the
avoidance of doubt, Borrower shall not incur any prepayment premium set forth in
Section Error! Reference source not found. hereof with respect to any portions
of this Note that are satisfied by way of a Borrower Offset Right.

 

17.             Joint and Several Obligations. To the extent applicable, any
references in this Note to Borrower refer to each person or entity constituting
Borrower jointly and severally, and all promises, agreements, covenants,
waivers, consents, representations, warranties, and other provisions in this
Note are made by and are binding upon each such undersigned person or entity,
jointly and severally.

 

 

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IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed as of the
Effective

Date.

 

  BORROWER:       NEMAURA MEDICAL INC.           By:       /s/ Dewan F.H.
Chowdhury  

Name:

Title: 

Dewan F.H. Chowdhury
Chairman and CEO

 

      DERMAL DIAGNOSTICS LIMITED           By:       /s/ Dewan F.H. Chowdhury  

Name:

Title: 

Dewan F.H. Chowdhury
Chairman and CEO

 

  TRIAL CLINIC LIMITED       By:       /s/ Dewan F.H. Chowdhury  

Name:

Title: 

Dewan F.H. Chowdhury
Chairman and CEO

 

ACKNOWLEDGED, ACCEPTED AND AGREED:

LENDER:

  CHICAGO VENTURE PARTNERS, L.P.       By: Chicago Venture Management, L.L.C.,
its General Partner       By: CVM, Inc., its Manager       By:       /s/ John M.
Fife  

Name:

Title: 

John M. Fife
John M. Fife, President

 

 

 

 

[Signature Page to Secured Promissory Note] 

 

 

 

 
 

 

ATTACHMENT 1 DEFINITIONS

 

For purposes of this Note, the following terms shall have the following
meanings:

 

A1. “Default Effect” means multiplying the Outstanding Balance as of the date
the Event of Default occurred by ten percent (10%).

A2. “DTC” means the Depository Trust Company or any successor thereto.

A3. “DTC/FAST Program” means the DTC’s Fast Automated Securities Transfer
program. A4. “DWAC” means the DTC’s Deposit/Withdrawal at Custodian system.

A5. “DWAC Eligible” means that (a) Company’s Common Stock is eligible at DTC for
full services pursuant to DTC’s operational arrangements, including without
limitation transfer through DTC’s DWAC system; (b) Company has been approved
(without revocation) by DTC’s underwriting department; (c) Company’s transfer
agent is approved as an agent in the DTC/FAST Program; and (d) Company’s
transfer agent does not have a policy prohibiting or limiting delivery of Common
Stock via DWAC.

A6. “Fundamental Transaction” means that (a) (i) Borrower or any of its
subsidiaries shall, directly or indirectly, in one or more related transactions,
consolidate or merge with or into (whether or not Borrower or any of its
subsidiaries is the surviving corporation) any other person or entity, or (ii)
Borrower or any of its subsidiaries shall, directly or indirectly, in one or
more related transactions, sell, lease, license, assign, transfer, convey or
otherwise dispose of all or substantially all of its respective properties or
assets to any other person or entity, or (iii) Borrower or any of its
subsidiaries shall, directly or indirectly, in one or more related transactions,
allow any other person or entity to make a purchase, tender or exchange offer
that is accepted by the holders of more than 50% of the outstanding shares of
voting stock of Borrower (not including any shares of voting stock of Borrower
held by the person or persons making or party to, or associated or affiliated
with the persons or entities making or party to, such purchase, tender or
exchange offer), or (iv) Borrower or any of its subsidiaries shall, directly or
indirectly, in one or more related transactions, consummate a stock or share
purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with any
other person or entity whereby such other person or entity acquires more than
50% of the outstanding shares of voting stock of Borrower (not including any
shares of voting stock of Borrower held by the other persons or entities making
or party to, or associated or affiliated with the other persons or entities
making or party to, such stock or share purchase agreement or other business
combination), or (v) Borrower or any of its subsidiaries shall, directly or
indirectly, in one or more related transactions, reorganize, recapitalize or
reclassify the Common Stock, other than an increase in the number of authorized
shares of Borrower’s Common Stock, or reverse splits of its outstanding and
authorized shares of Common Stock to meet Nasdaq listing requirements or (b) any
“person” or “group” (as these terms are used for purposes of Sections 13(d) and
14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is
or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934
Act), directly or indirectly, of 50% of the aggregate ordinary voting power
represented by issued and outstanding voting stock of Borrower.

A7. “Mandatory Default Amount” means the Outstanding Balance following the
application of the Default Effect.

A8. “Maximum Monthly Redemption Amount” means $100,000.00 until March 31, 2021
and

$500,000.00 thereafter.

A9. “OID” means an original issue discount.

A10. “Other Agreements” means, collectively, (a) all existing and future
agreements and instruments between, among or by Borrower (or an affiliate), on
the one hand, and Lender (or an affiliate), on the other hand, and

(b)any financing agreement or a material agreement that affects Borrower’s
ongoing business operations.

A11. “Outstanding Balance” means as of any date of determination, the Purchase
Price, as reduced or increased, as the case may be, pursuant to the terms hereof
for payment, offset, or otherwise, plus the OID, the Transaction Expense Amount,
accrued but unpaid monitoring fees, collection and enforcements costs (including
attorneys’ fees) incurred by Lender, transfer, stamp, issuance and similar taxes
and fees incurred under this Note.

 

 

 
 

 

A12. “Purchase Price Date” means the date the Initial Cash Purchase Price is
delivered by Lender to Borrower.

A13. “Trading Day” means any day on which the New York Stock Exchange (or such
other principal market for the Common Stock) is open for trading. For purposes
of determining Borrower’s cash payment deadline under this Note, such “Trading
Day” shall exclude any day on which banking institutions in Dalian, China are
authorized or required by law or other governmental action to close.

 

 

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