TEUM Pareteum Corporation

On May 4, 2020, Pareteum Corporation (the “Company”) issued a promissory note (the “Pareteum Note”) evidencing an unsecured loan in the amount of $ 551,800 made to the Company under the Paycheck Protection Program (the “PPP”). On May 8, 2020, the Company, through its wholly owned subsidiary iPass Inc. (“iPass”), issued an additional promissory note (the “iPass Note,” and together with the Pareteum Note, the “Notes,” and each individually, a “Note”) evidencing an unsecured loan in the amount of $818,900 made to iPass under the PPP. The PPP was established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and is administered by the U.S. Small Business Administration (the “SBA”). The loans to each of the Company and iPass were made through Silicon Valley Bank.

Each Note provides for an interest rate of 1.00% per year and matures two years after the issuance date. Principal and accrued interest are payable monthly in equal installments commencing on the date that is six months after the date funds are first disbursed on the loan and continuing through the maturity date, unless such Note is forgiven as described below. To be available for loan forgiveness, the Notes may only be used for payroll costs, costs related to certain group health care benefits and insurance premiums, rent payments, utility payments, mortgage interest payments and interest payments on any other debt obligation that were incurred before February 15, 2020. The Notes may each be prepaid at any time prior to maturity with no prepayment penalties and contains events of default and other conditions customary for Notes of this type. For example, the Notes contain events of default relating to, among other things, payment defaults, making materially false and misleading representations to the SBA or Silicon Valley Bank, or breaching the terms of the loan documents. The occurrence of an event of default may result in the repayment of all amounts outstanding, collection of all amounts owing from the Company, or filing suit and obtaining judgment against the Company and/or iPass.

Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of loan granted under the PPP, with such forgiveness to be determined, subject to limitations, based on the use of the loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. The terms of any forgiveness may also be subject to further requirements in any regulations and guidelines the SBA may adopt. While the Company currently believes that its use of the proceeds from the Notes will meet the conditions for forgiveness under the PPP, no assurance is provided that the Company will obtain forgiveness of either Note in whole or in part.