EXHIBIT 10.1

 

 

WAIVER AND AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT

 

THIS WAIVER AND AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT (this
“Amendment”) dated as of February 29, 2012 (the “Effective Date”), is by and
among THERMO CREDIT, LLC, a Colorado limited liability company (together with
its successors and assigns, “Lender”), and TELETOUCH COMMUNICATIONS, INC., a
Delaware corporation (“TCI”), TELETOUCH LICENSES, INC., a Delaware corporation
(“TLI”), and PROGRESSIVE CONCEPTS, INC., a Texas corporation (“PCI”,
collectively with TCI, TLI, and any other Person identified or named from time
to time as a “Debtor” under the Loan Documents, jointly and severally
“Debtors”), with respect to the Loan and Security Agreement entered into as of
April 30, 2008 by the Lender and the Debtors (as the same has been amended
and/or supplemented from time to time), and as the same may be further amended,
supplemented, restated, or otherwise modified from time to time (the
“Agreement”). Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to such terms in the Agreement as amended
hereby.

 

RECITALS

 

WHEREAS, Debtor and Lender entered into the Agreement; and

 

WHEREAS, in connection with the Agreement, Debtor executed and delivered to
Lender that certain Promissory Note dated as of even date with the Agreement, in
the original principal amount of Five Million and no/100 Dollars ($5,000,000.00)
which was subsequently modified by (i) that certain Third Amendment to Loan and
Security Agreement and Modification of Promissory Note dated effective as of
December 31, 2010 among the Debtors and the Lender to increase the maximum
principal amount to Eighteen Million and no/100 Dollars ($18,000,000.00), and
(ii) that certain Waiver and Amendment No. 4 to Loan and Security Agreement and
Modification of Promissory Note dated as of October 11, 2011 among the Debtors
and the Lender to decrease the maximum principal amount to Twelve Million and
no/100 Dollars ($12,000,000.00), as amended, modified, and/or restated from time
to time, the “Note”; and

 

WHEREAS, Lender has made Loans to the Debtors pursuant to the terms of the
Agreement in the aggregate principal amount of $10,391,153.25, as of the
Effective Date; and

 

WHEREAS, Debtors have requested that Lender grant certain waivers under the
Agreement, and Lender is willing to grant the waivers requested by Debtors on
the terms and conditions hereinafter set forth; and

 

WHEREAS, the parties desire to amend the Agreement pursuant to the terms and
conditions set forth herein;

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

 

 

 

 

Section 1.     Waivers. Upon the date that this Amendment shall have been
executed by each of the parties hereto and all conditions set forth in Section 8
of this Amendment have been satisfied, Lender agrees to grant the following
waivers under the Agreement:

 

(a)     Lender hereby waives any and all (i) Events of Default existing under
the Agreement as of the Effective Date other than those arising under Section 9
of the Agreement; and (ii) Events of Default arising under Section 9 of the
Agreement (a “Financial Covenant Default”), during period ending as of the
Effective Date (collectively, the “Existing Defaults”);

 

(b)     Lender hereby prospectively waives any Financial Covenant Defaults that
may arise during the period from the Effective Date through and including May
31, 2012, and will take no action to accelerate collection of the Note on
account of a Financial Covenant Default prior to May 31, 2012; and

 

(c)     Lender will not take any action under Section 2(e) of the Agreement to
exclude or reevaluate any Property included in the Borrowing Base or any other
action related to the Borrowing Base that would result in the Indebtedness under
the Agreement being accelerated (a “Borrowing Base Action”) prior to May 31,
2012.

 

Debtor acknowledges and agrees that the foregoing provisions of this Section 1
relate solely to Financial Covenant Defaults through May 31, 2012, and shall in
no way be deemed or construed as a waiver by Lender of any other default or
Event of Default occurring under this Amendment, the Agreement or any other Loan
Document at any time after the Effective Date. Lender expressly reserves the
full extent of its rights under this Amendment, the Agreement, the other Loan
Documents, and applicable law, other than Borrowing Base Actions, in respect of
(i) any default or Event of Default other than a Financial Covenant Default
occurring after the Effective Date, and (ii) any default or Event of Default,
including a Financial Covenant Default, occurring after May 31, 2012, absent the
conditions in Section 2 below being satisfied.

 

Section 2.     Conditional Future Waiver. Lender will prospectively waive any
Financial Covenant Default that may occur during the period from June 1, 2012
through August 31, 2012 and will take no action to accelerate collection of the
Note on account of a Financial Covenant Default prior to August 31, 2012, and
will take no Borrowing Base Action prior to August 31, 2012 if, and only if, the
Debtors meet and satisfy in all respects the following conditions:

 

(a)     Debtors will achieve the financial performance during their fourth
quarter, ended May 31, 2012, as set forth in the financial projections attached
as Exhibit “A” to this Amendment. Debtors will provide Lender unaudited
financial statements for the months ending March 31, 2012 and April 30, 2012 and
the fiscal quarter ending May 31, 2012 by the 20th day of the month following
the operating period to which they pertain. Debtors’ actual Adjusted EBITDA for
the fiscal quarter ending May 31, 2012 shall be not less than 75% of the
projected Adjusted EBITDA for that same period, as set forth in Exhibit A hereto
(the “EBITDA Covenant”). Debtor shall provide Lender with draft, unaudited
financial statements for the May 31, 2012 fiscal quarter no later than June 10,
2012, and Debtors’ compliance with the EBITDA Covenant shall be tested by
reference to those draft financials. Debtors’ final unaudited financials for the
fiscal quarter ending May 31, 2012 shall not differ in any material respect from
the draft financials provided to Lender; and

 

(b)     Debtors will obtain two or more term sheets for refinancing the existing
loans encumbering the Eligible Real Estate from unrelated third-party lenders on
or before April 30, 2012; and

 

(c)     Debtors will obtain a commitment for refinancing the existing loans
encumbering the Eligible Real Estate from an unrelated third-party lender on or
before May 31, 2012, which commitment will provide that a closing of the
refinancing will occur within 45 days; and

 

(d)     Debtors will close the refinancing of the existing loans encumbering the
Eligible Real Estate on or before July 15, 2012 and Lender shall have received a
principal payment of not less than $1.4 million at that closing.

 

 

 

 

Debtor acknowledges and agrees that the foregoing provisions of this Section 2
relate solely to the conditional future waiver of any Financial Covenant Default
and any Borrowing Base Action as specified in Section 2 hereof and such waivers
shall be granted and will remain in effect only if Sections 2 (a), (b), (c) and
(d) hereof are satisfied, and shall in no way be deemed or construed as a waiver
by Lender of any other default or Event of Default under the Agreement or any
other Loan Document occurring subsequent to the Effective Date. Lender expressly
reserves the full extent of its rights under this Amendment, the Agreement, the
other Loan Documents, and applicable law, other than Borrowing Base Actions, in
respect of (i) any default or Event of Default other than a Financial Covenant
Default occurring after the Effective Date; and (ii) any Financial Covenant
Default occurring after May 31, 2012, if the conditions in Section 2(a), (b),
(c), or (d) hereof are not satisfied.

 

Section 3.     Maturity Date. Section 2(c) of the Agreement is hereby amended to
provide that the Revolving Credit Maturity Date shall occur on August 31, 2012,
whereupon all Indebtedness shall be due and payable in full.

 

Section 4. Commitment Fee. Section 2(h)(vi) of the Agreement is hereby amended
and restated in its entirety as follows:

 

(vi)     A monthly commitment fee (“Commitment Fee C”) equal to .0625% of the
amount set forth in clause (A) of the first sentence of Section 2(c). Commitment
Fee C will be deemed earned and be due and payable to Lender monthly beginning
February 1, 2012 and continuing on the first day of each month thereafter
through the date that the outstanding Indebtedness is paid in full by Debtor.

 

Section 5.     Payment. As an express condition precedent to this Amendment
becoming effective and enforceable against Lender, Debtor shall pay to Lender
TWO MILLION AND NO/100 DOLLARS ($2,000,000.00) in immediately available funds
(the “Payment”) upon execution of this Amendment, which payment shall be applied
by Lender to the Indebtedness in the manner provided in the Agreement.

 

Section 6.     No Further Obligation to Lend. Debtors acknowledge and agree that
in consideration of, among other things, the waivers and the conditional future
waiver contained in this Amendment, Lender shall have no further obligation
under Section 2(c) of the Agreement or otherwise to lend or advance any
additional funds whatsoever to the Debtors.

 

Section 7.     Representations and Warranties. The Debtors, jointly and
severally, hereby represent and warrant to the Lender that:

 

(a)     after waiver of the Existing Defaults, no default or Event of Default
has occurred and is continuing on and as of the date hereof;

 

 

 

 

(b)     `the representations and warranties of each of the Debtors contained in
the Agreement and the other Loan Documents are true and correct on and as of the
date hereof as if made on and as of the date hereof, except to the extent that
such representations and warranties expressly relate to a different date; and

 

(c)     the execution and delivery by the Debtors of this Amendment and the
performance by the Debtors of all of their respective agreements and obligations
under this Amendment and the Agreement as amended hereby, and the other Loan
Documents, respectively, are within the power and authority of the Debtors and
have been duly authorized by all necessary action on the part of the Debtors,
and the execution and delivery by the Debtors of this Amendment, and the
performance by them of the transactions contemplated hereby, do not and will not
contravene any term or condition set forth in any agreement or instrument to
which any Debtor is a party or by which any Debtor is bound.

 

Section 8.     Effectiveness and Conditions Precedent. This Amendment shall
become effective upon the Lender’s receipt of (a) counterparts of this Amendment
executed and delivered by the Debtors; (b) evidence in form and substance
satisfactory to Lender that the officer(s) of each Debtor whose signature(s)
appear below have the necessary authority to execute and deliver this Amendment
on behalf of each Debtor; and (c) the Payment.

 

Section 9.     Status of Loan Documents; Additional Representations and
Warranties.

 

(a)     This Amendment is limited solely for the purposes and to the extent
expressly set forth herein, and the terms, provisions, and conditions of the
Loan Documents, and the Liens granted under the Loan Documents, shall continue
in full force and effect and are hereby ratified and confirmed in all respects.
The Debtors and Lender expressly reaffirm all of the Loan Documents and the
debts and other obligations thereunder, the Debtors and Lender agree that
nothing contained herein shall operate to release any of the Debtors, the
Lender, or any other Person from liability to keep and perform the provisions,
conditions, obligations, and agreements contained in the Loan Documents, except
as may be herein modified, and the Debtors and Lender hereby reaffirm that each
and every provision, condition, obligation, and agreement in such documents
shall continue in full force and effect, except as may be herein modified. The
validity, priority, and perfection of all security interests and other liens
granted or created by the Loan Documents are hereby acknowledged and confirmed
by the Debtors, and the Debtors agree that such documents shall continue to
secure the advances and the other Indebtedness, as the same may be amended by
this Amendment, without any change, loss, or impairment of the priority of such
security interests or other liens.

 

 

 

 

(b)     No waiver of any terms or provisions of the Agreement made hereunder
shall relieve the Debtors or the Lender from complying with any other term or
provision of the Agreement or any of the other Loan Documents.

 

(c)     No action taken by the Lender or the Debtors prior to, on, or after the
date hereof shall constitute a waiver of or modification of any term or
condition of any of the Loan Documents, except as specifically set forth herein,
or prejudice any rights which the Lender or the Debtors may now have as of the
date hereof or may have in the future under or in connection with the Loan
Documents, including, without limitation, all rights and remedies in connection
with defaults, Events of Default (other than the Existing Defaults and Financial
Covenant Defaults to the extent waived in this Amendment), and failures of
conditions precedent to the making of advances that have occurred and are
continuing, all of which rights and remedies the Lender hereby expressly
reserves.

 

(d)     The Debtors, jointly and severally, hereby represent and warrant to the
Lender that except as heretofore disclosed in writing by the Debtors to the
Lender or as disclosed by Debtor in any public filing with the Securities and
Exchange Commission or in any press release made publicly available by Debtor,
as of the date hereof there is no pending or, to the knowledge of any Debtor,
threatened action, suit, proceeding, governmental investigation, or arbitration
against or affecting any Debtor or any property of any Debtor.

 

Section 10.     Amendment Default.     Debtors acknowledge and agree that their
failure to satisfy any one or more of the conditions set forth in Sections 2(a),
(b), (c) or (d) above shall constitute an Event of Default entitling Lender to
exercise all of its rights and remedies under the Agreement, the other Loan
Documents and/or applicable law without prior or further notice to the Debtors.

 

Section 11.     Miscellaneous.

 

(a)     No Waiver, Cumulative Remedies. No failure or delay or course of dealing
on the part of the Lender in exercising any right, power, or privilege hereunder
shall operate as an express or implied waiver thereof, nor shall any single or
partial exercise of any such right, power, or privilege preclude any other or
further exercise thereof or the exercise of any other right, power, or privilege
hereunder. The rights, powers, and remedies herein expressly provided are
cumulative and not exclusive of any rights, powers, or remedies which the Lender
would otherwise have. No notice to or demand on any Debtor in any case shall
entitle any Debtor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Lender to any other or
further action in any circumstances without notice or demand.

 

(b)     Ratification, Etc. Except as expressly provided for herein, the
Agreement, the Note, and all documents, instruments, and agreements related
thereto, including, but not limited to, the other Loan Documents, are hereby
ratified and confirmed in all respects and shall continue in full force and
effect. The Agreement and this Amendment shall be read and construed as a single
agreement. This Amendment shall constitute one of the Loan Documents. All
references in the Agreement, the Note, the Loan Documents, or any related
agreement or instrument to the Agreement shall hereafter refer to both the
Agreement and the Note as amended hereby.

 

(c)     Expenses. The Debtors agree to pay and reimburse the Lender for costs
and expenses (including costs and expenses of legal counsel) in connection with
this Amendment not to exceed Ten-Thousand and no/100 dollars ($10,000.00), and
such costs and expenses shall constitute Indebtedness for all purposes under the
Loan Documents.

 

 

 

 

(d)     Bankruptcy; Insolvency. The Debtors hereby represent and warrant that,
on and as of the date hereof: no proceeding has been filed or commenced by or
against any Debtor for dissolution, termination, or liquidation; nor does there
exist insolvency of any Debtor, nor does any Debtor fail to pay its debts as
they become due in the ordinary course of business; nor has a creditor’s
committee been appointed for the business of any Debtor; nor has any Debtor made
an assignment for the benefit of creditors, or filed a petition in bankruptcy or
for reorganization or to effect a plan of arrangement with creditors; nor has
any Debtor applied for or permitted the appointment of a receiver or trustee for
any or all of its property, assets, or rights; nor is any Debtor aware of any
such receiver or trustee being appointed for any or all of its property, assets,
or rights.

 

(e)     Headings Descriptive. The headings of the several Sections and
subsections of this Amendment are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision.

 

(f)     Severability. In case any provision in or obligation under this
Amendment shall be invalid, illegal, or unenforceable in any jurisdiction, the
validity, legality, and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

 

(g)     Counterparts; Execution. This Amendment may be executed and delivered in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. The
exchange of copies of this Amendment and of signature pages by facsimile or
electronic mail transmission shall constitute effective execution and delivery
of this Amendment as to the parties and may be used in lieu of the original
Amendment for all purposes. Signatures of the parties transmitted by facsimile
or electronic mail shall be deemed to be their original signatures for all
purposes.

 

(h)     Modification. No amendment or waiver of any provision of this Amendment
shall be effective unless the same shall be in writing and signed by the Lender
and the Debtors, and then any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.

 

Section 11.     Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF LOUISIANA
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE THE
APPLICATION OF ANY OTHER LAW.

 

[Signatures on following page]

 

 

 

 

IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
as of the date first above written.

 

LENDER:   ADDRESS: THERMO CREDIT, LLC   639 Loyola Avenue, Suite 2565        
By: /s/ Seth Block     Name: Seth Block     Title: Executive Vice President    
DEBTOR:   ADDRESS TELETOUCH COMMUNICATIONS, INC.   5718 Airport Freeway        
By: /s/ Thomas A. Hyde, Jr.     Name: Thomas A. Hyde, Jr.     Title: President
and Chief Operating Officer     TELETOUCH LICENSES, INC.   5718 Airport Freeway
      Ft. Worth, TX 76117 By: /s/ Thomas A. Hyde, Jr.     Name: Thomas A. Hyde,
Jr.     Title: President     PROGRESSIVE CONCEPTS, INC.   5718 Airport Freeway  
    Ft. Worth, TX 76117 By: /s/ Thomas A. Hyde, Jr.     Name: Thomas A. Hyde,
Jr.     Title: President and Chief Executive Officer