Item 1.02 Termination of a Material Definitive Agreement.
As previously disclosed, on May 24, 2020, Pareteum Corporation (the “Company”) entered into a new Forbearance Agreement, dated as of May 20, 2021 (the “Forbearance Agreement”), with High Trail Investments SA LLC (“HT”), the holder of (i) that certain Senior Secured Convertible Note due 2025, dated as of June 8, 2020, issued by the Company (the “High Trail Note”) and (ii) that certain Warrant to Purchase Common Stock, dated June 8, 2020 (the “High Trail Warrant”), issued by the Company. HT and the Company are also party to that certain Securities Purchase Agreement, dated June 8, 2020 (the “High Trail SPA”), under which the High Trail Note and Warrant were originally sold.
Under the terms of the Forbearance Agreement, the Company admitted that it was in default of several obligations under the High Trail Note and the High Trail SPA, HT acknowledged such defaults and HT agreed not to exercise any right or remedy under the High Trail Note, the High Trail SPA, the High Trail Warrant or the related security documents (collectively, the “Transaction Documents”), including its right to accelerate the aggregate amount outstanding under the High Trail Note, its right to exercise any remedy with respect to any Company assets securing the Company’s obligations under the Transaction Documents and its right to bring legal proceedings against the Company under the Transaction Documents, until the earlier of May 31, 2020 or any later date to which such date may be extended (the “Outside Date”), and the date of any new event of default or initiation of any action by the Company to invalidate any of the representations and warranties made in the Forbearance Agreement. The Outside Date automatically extended for successive two-week periods unless on or before the then-applicable Outside Date HT provides notice that the Outside Date is not being extended.
On August 16, 2021, HT provided notice to the Company that the Outside Date was not being extended, and accordingly, HT’s agreement to forbear taking the foregoing actions with respect to the Company’s defaults under the Transaction Documents terminates on August 23, 2021.
The foregoing description is qualified in its entirety by the terms of the Forbearance Agreement, which is incorporated herein by reference and attached hereto as Exhibit 10.1.