Exhibit 10.9


 


SUBORDINATION
AND INTERCREDITOR AGREEMENT


 


THIS SUBORDINATION
AND INTERCREDITOR AGREEMENT (this "Agreement"), dated as of dated as of FEBRUARY 8, 2013 (the "Effective
Date"), is made by THERMO CREDIT, LLC (the "Subordinated Creditor"), for the benefit of DCP
TELETOUCH LENDER, LLC, in its capacity as agent for the Lenders (as hereinafter defined) (with its successors and assigns,
the "Senior Agent").


 


WHEREAS, pursuant
to that certain LOAN AND SECURITY AGREEMENT dated as of the date hereof (as amended and in effect from time to time, including
any replacement agreement or agreements therefor, the "Senior Loan Agreement"), by and among TELETOUCH COMMUNICATIONS,
INC., a Delaware corporation and PROGRESSIVE CONCEPTS, INC., a Texas corporation (each
a "Company" and collectively, the "Companies"), the Senior Agent and the lending institutions
party thereto (each a "Senior Lender" and collectively, the "Senior Lenders"), the Senior Lenders
have agreed, upon the terms and subject to the conditions contained therein, to make certain loans in favor of the Companies, which
loans are secured by the Collateral (as hereinafter defined); and


 


WHEREAS, the
Companies are indebted to the Subordinated Creditor in respect of Subordinated Indebtedness described on Exhibit A attached
hereto, which Subordinated Indebtedness is secured by some or all of the Collateral; and


 


WHEREAS, the
Companies intend to use a portion of the proceeds of the Senior Indebtedness (as hereinafter defined) to pay a portion of the outstanding
Subordinated Indebtedness; and


 


WHEREAS, it
is a condition precedent to the Senior Lenders' willingness to make loans to the Companies pursuant to the Senior Loan Agreement
that the Subordinated Creditor enter into this Agreement which, among other things, subordinates (i) the payment of the Subordinated
Creditor's loans to Companies to the payment of any and all indebtedness of the Companies to the Senior Agent and the Senior Lenders,
and (ii) the liens of the Subordinated Creditor in the Collateral to the liens of the Senior Agent, for the benefit of the Senior
Lenders in such Collateral.


 


ACCORDINGLY,
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Subordinated Creditor hereby
agrees as follows:


 


1.            Definitions.
As used herein, the following terms have the meanings set forth below:


 


"Collateral"
means all property now or at any time hereafter securing payment of any Senior Indebtedness, including all proceeds thereof; and
including, but not limited to the "Collateral" (as such term is defined in the Senior Loan Agreement).


 


"Lien"
means any security interest, mortgage, deed of trust, pledge, lien, charge, encumbrance, title retention agreement or analogous
instrument or device, including the interest of each lessor under any capitalized lease and the interest of any bondsman under
any payment or performance bond, in, of or on any assets or properties of a Person, whether now owned or hereafter acquired and
whether arising by agreement or operation of law.


 




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"Senior
Indebtedness" is used herein in its most comprehensive sense and means any and all advances, debts, obligations and liabilities
of the Companies to the Senior Agent and the Senior Lenders, heretofore, now or hereafter made, incurred or created, whether voluntary
or involuntary and however arising, whether due or not due, absolute or contingent, liquidated or unliquidated, joint or several,
determined or undetermined, and whether the Companies (or any of them) may be liable individually or jointly with others, or whether
recovery upon such indebtedness may be or hereafter becomes unenforceable, and including all interest and/or fees accruing on such
indebtedness after the commencement of a bankruptcy or insolvency proceeding, whether or not allowed in such proceeding (including,
without limitation, all principal, interest, fees, reimbursement obligations with indemnities, costs and expenses from time to
time outstanding pursuant to or under the Senior Loan Documents) up to an aggregate amount not to exceed the sum of: (a) up to
$9,200,000 of loans at any time outstanding pursuant to the Senior Loan Agreement; plus (b) all accrued but unpaid interest arising
under or with respect to the Senior Loan Documents (including, in the event of a bankruptcy or insolvency proceeding, any and all
post-petition interest and costs from and after the date of filing of a petition by or against Borrower or its bankruptcy estate,
whether or not such amounts are allowed as a claim against Borrower in any bankruptcy or insolvency proceeding); plus (c) all amounts
advanced by Senior Agent and/or Senior Lenders under the Senior Loan Documents, or costs and expenses incurred by Senior Agent
and Senior Lenders, (i) to maintain, protect or preserve the Collateral and/or the rights of the Senior Agent and Senior Lenders
under the Senior Loan Documents, (ii) to enhance the likelihood of, or to maximize the amount of, repayment of the Senior Indebtedness,
or (iii) is made to pay any amount chargeable to the Companies under the Senior Loan Documents ( including by way of example, costs
of collection, court costs, appraisal and consulting fees, reasonable attorneys' fees, auctioneers' fees, rent, storage, insurance
premiums and like items, and whether or not such amounts are allowed as a claim against the Companies in connection with any bankruptcy
or insolvency proceeding); plus (d) all unreimbursed fees, charges, costs, expenses and indemnities owing by the Companies to Senior
Agent and Senior Lenders under or in connection with the Senior Loan Documents.


 


"Senior
Indebtedness Default" means the occurrence of any Default or Event of Default (as such terms are defined in the Senior
Loan Agreement).


 


"Senior
Loan Documents" means, collectively, the "Loan Documents" as such term is defined in the Senior Loan Agreement.


 




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"Standstill
Period" means, with respect to (i) the occurrence of any Subordinated Payment Default on account of the failure by the
Companies to make any payment required to be made under Sections 3(a), (c), (d) and (e) of the Subordinated Note (as in effect
as of the date of this Agreement), the period of ninety (90) days following the date of delivery by Subordinated Creditor to Senior
Agent of the applicable Subordinated Payment Default Notice, and (ii) the occurrence of any Subordinated Payment Default on account
of the failure by the Companies to make any payment required to be made under Section 3(b) of the Subordinated Note (as in effect
as of the date of this Agreement), the period of thirty (30) days following the date of delivery by Subordinated Creditor to Senior
Agent of the applicable Subordinated Payment Default Notice; provided, in each case, that to the extent that any Senior Indebtedness
Default shall have occurred and be continuing at the time of delivery of such Subordinated Payment Default Notice (other than a
Senior Indebtedness Default arising solely as a result of the applicable Subordinated Payment Default), such period shall be extended
to the date one hundred eighty (180) days following the occurrence of such Senior Indebtedness Default.


 


"Subordinated
Indebtedness" is used herein in its most comprehensive sense and means each and every advance, debt, liability and obligation
of every type and description, whether voluntary or involuntary and however arising, which the Companies may now or at any time
hereafter owe to the Subordinated Creditor, whether such advance, debt, liability or obligation now exists or is hereafter created
or incurred, and whether it is or may be direct or indirect, due or to become due, absolute or contingent, primary or secondary,
liquidated or unliquidated, joint, several or joint and several, determined or undetermined, and whether the Companies (or any
of them) may be liable individually or jointly with others, or whether recovery upon such indebtedness may be or hereafter becomes
unenforceable, and including all interest and/or fees accruing on such indebtedness after the commencement of a bankruptcy or insolvency
proceeding, whether or not allowed in such proceeding, including, without limitation, the indebtedness of the Companies owing to
Subordinated Creditor described on Exhibit A attached hereto.


 


"Subordinate
Payment Default" means any failure by Companies to make any payment required to be made under Section 3 of the Subordinated
Note (as in effect as of the date of this Agreement).


 


"Subordinated
Payment Default Notice" has the meaning set forth in Section 5(b) of this Agreement.


 


"Subordinated
Note" means that certain Amended and Restated Subordinated Promissory Note dated February 8, 2013, made by the Companies
in favor of the Subordinated Creditor referred to on Exhibit A attached hereto.


 


2.            Subordination
of Debt; Restrictions on Payments.


 


(a)          The
payment of all of the Subordinated Indebtedness is hereby expressly subordinated to the payment in full of the Senior Indebtedness.
Until all of Senior Indebtedness has been paid in full and the Senior Agent, on behalf of the Senior Lenders, has released its
Lien in the Collateral, the Subordinated Creditor shall not, without the Senior Agent's prior written consent, demand, receive
or accept any payment (whether of principal, interest or otherwise) from the Companies in respect of the Subordinated Indebtedness,
or exercise any right of or permit any setoff in respect of the Subordinated Indebtedness except as set forth herein. The Subordinated
Indebtedness shall continue to be subordinated to the Senior Indebtedness even if all or a portion of the Senior Indebtedness is
deemed unsecured, undersecured, subordinated, avoided or disallowed under the United States Bankruptcy Code or other applicable
law.


 




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(b)          Notwithstanding
anything contained in this Agreement to the contrary, the Companies may pay, and the Subordinated Creditor may accept payments
of Subordinated Indebtedness in accordance with the following:


 


(i)          Provided
that no Senior Indebtedness Default has occurred and continues to then exist, upon the consummation of the Fort Worth Refinancing
(as defined in the Senior Loan Agreement), the Fort Worth Refinancing Proceeds (as defined in the Senior Loan Agreement) shall
be applied by the Companies as follows:


 


(A) first,
to the extent that Companies' 30 Day Average Liquidity (as defined in the Senior Loan Agreement) for the thirty (30) day period
immediately preceding the receipt of the Fort Worth Refinancing Proceeds is less than $500,000, to the repayment of Senior Indebtedness
in the manner contemplated by the Senior Loan Agreement, until the Companies' 30 Day Average Liquidity (as defined in the Senior
Loan Agreement) for the thirty (30) day period immediately preceding the receipt of the Fort Worth Refinancing Proceeds (as defined
in the Senior Loan Agreement) is equal to $500,000;


 


(B) second,
(x) fifty percent (50%) of the remaining Fort Worth Refinancing Proceeds (if any) shall be applied to the outstanding Subordinated
Indebtedness, and (y) fifty percent (50%) of such Fort Worth Refinancing Proceeds shall be applied to reduce the outstanding Senior
Indebtedness until the Companies' 30 Day Average Liquidity (as defined in the Senior Loan Agreement) for the thirty (30) day period
immediately preceding the receipt of the Fort Worth Refinancing Proceeds (as defined in the Senior Loan Agreement) is equal to
$1,000,000; and


 


(C) then,
any remaining Forth Worth Refinancing Proceeds may be applied to the outstanding Subordinated Indebtedness;


 


provided,
however, in no event shall the amounts applied to the Subordinated Indebtedness on account of the Fort Worth Refinancing
Proceeds exceed $700,000. If there are excess Fort Worth Refinancing Proceeds after giving effect to payment of the Subordinated
Indebtedness contemplated by this Section 2(b)(i), then such excess Fort Worth Refinancing Proceeds shall be applied to
the Senior Indebtedness pursuant to the terms of the Senior Loan Agreement.


 


(ii)         The
Companies may, within one (1) business day of receipt, make payment on the Subordinated Indebtedness in an amount equal to the
net cash proceeds (not to exceed $300,000) arising from the sale of the Tyler Texas Property (as defined in the Senior Loan Agreement).


 




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(iii)        Upon
the expiration of the AT&T Distribution Agreement (as defined in the Senior Loan Agreement), provided that (A) the portion
of the Senior Indebtedness attributable to the then outstanding advances against Eligible Transfer Right Subscribers and Eligible
Pre-Bill Cellular Accounts (each a component of the Borrowing Base, as such terms are defined in the Senior Loan Agreement) has
been irrevocably paid in full, and (B) no Senior Indebtedness Default has occurred and continues to then exist, and (C) Companies'
30 Day Average Liquidity (as defined in the Senior Loan Agreement) for the thirty (30) day period immediately preceding the date
of (and after giving effect to) the payment on the Subordinated Indebtedness described in this Section 2(b)(iii) is no less
than $1,000,000, then, as soon as reasonably practicable following the receipt of the final payment (net of all applicable clawbacks
and off-set rights, if any, described in the AT&T Distribution Agreement) from AT&T (as defined in the Senior Loan Agreement)
following the transfer of all Eligible Transfer Right Subscribers to AT&T and following the satisfaction of each of (A), (B)
and (C) above, Companies may pay to Subordinated Creditor any then accrued, past-due but unpaid principal and interest on the Subordinated
Indebtedness in an amount not to exceed any excess proceeds received in connection with the expiration of the AT&T Distribution
Agreement and the related transfer of the Eligible Transfer Right Subscribers by the Company to AT&T.


 


(iv)         Companies
may make regularly scheduled payments of principal on account of the Subordinated Indebtedness required under Section 3(a) of the
Subordinated Note (as in effect as of the date of this Agreement), provided that after giving effect to any such payment (A) Companies'
30 Day Average Liquidity (as defined in the Senior Loan Agreement) for the thirty (30) day period immediately preceding such payment
would be greater than $1,000,000, and (B) Companies have achieved EBITDA (as defined in the Senior Loan Agreement) of no less than
the EBITDA amount set forth on Schedule 10.5 of the Senior Loan Agreement as of the end of the most recently ended testing period
under the Senior Loan Agreement, and (C) no Senior Indebtedness Default has occurred and continues to then exist.


 


(v)          Provided
that no Senior Indebtedness Default has occurred and continues to then exist, Companies may make regularly scheduled payments on
account of the Subordinated Indebtedness required under Section 3(b) of the Subordinated Note (as in effect as of the date of this
Agreement).


 


3.            Collateral
Subordination.


 


(a)          Notwithstanding
the date, time, method, manner or order of grant, attachment or perfection of any Liens securing the Subordinated Indebtedness
granted on the Collateral or any Liens securing the Senior Indebtedness granted on the Collateral, and notwithstanding any provision
of the Uniform Commercial Code or any other applicable law or the documents, instruments and agreements creating, evidencing or
securing the Subordinated Indebtedness or any defect or deficiencies in, or failure to perfect, the Liens securing the Senior Indebtedness
or any other circumstances whatsoever, the Subordinated Creditor hereby agrees that any Lien on the Collateral securing any Senior
Indebtedness now or hereafter held by or on behalf of the Senior Agent and/or the Senior Lenders, or any agent or trustee therefor,
regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior
in all respects and prior to any Lien on the Collateral securing any Subordinated Indebtedness.


 




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(b)          The
Subordinated Creditor agrees that it will not (and hereby waives any right to) contest or support any other person in contesting,
in any proceeding, including, without limitation, any Insolvency Proceeding (as hereinafter defined), the perfection, priority,
validity, or enforceability of any Lien held by or on behalf of the Senior Agent and/or the Senior Lenders or the provisions of
this Agreement.


 


4.            Receipt
of Prohibited Payments. If the Subordinated Creditor receives any payment on the Subordinated Indebtedness that the Subordinated
Creditor is not entitled to receive under the provisions of this Agreement, the Subordinated Creditor will hold the amount so received
in trust for the Senior Agent, on behalf of the Senior Lenders, and will forthwith turn over such payment to the Senior Agent in
the form received (except for the endorsement of the Subordinated Creditor where necessary) for application to then-existing Senior
Indebtedness (whether or not due), in such manner of application as the Senior Agent may deem appropriate. If the Subordinated
Creditor exercises any right of setoff against any party, the Subordinated Creditor will promptly pay over to the Senior Agent,
in immediately available funds, an amount equal to the amount of the claims or obligations offset. If the Subordinated Creditor
fails to make any endorsement required under this Agreement, the Senior Agent, or any of its officers or employees or agents on
behalf of the Senior Agent, is hereby irrevocably appointed as the attorney-in-fact (which appointment is coupled with an interest)
for the Subordinated Creditor to make such endorsement in the Subordinated Creditor's name.


 


5.            Action
on Subordinated Indebtedness; Senior Agent Exercise of Remedies; Release of Collateral.


 


(a)          Except
as otherwise permitted under Section 5(b), until the payment in full of all Senior Indebtedness the Subordinated Creditor
will not:


 


(i)          commence
any action or proceeding against any of the Companies to recover all or any part of the Subordinated Indebtedness, or join with
any creditor (unless the Senior Agent and/or Senior Lenders shall so join) in bringing any Insolvency Proceeding, or take possession
of, sell, or dispose of any Collateral, or exercise or enforce any right or remedy available to the Subordinated Creditor with
respect to any such Collateral (all actions with respect to the Collateral, being a "Collateral Remedy"), unless
and until all Senior Indebtedness has been paid in full and the Senior Agent has released its Lien in the Collateral; or


 




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(ii)         contest,
protest or object to any foreclosure proceeding or action brought by or on behalf of the Senior Agent, or any other exercise by
the Senior Agent and/or Senior Lenders of any rights or remedies relating to the Collateral under the Senior Loan Agreement and
any related documents.


 


(b)          Subordinated
Creditor shall deliver to the Senior Agent and the Companies a notice of any Subordinate Payment Default (a "Subordinate
Payment Default Notice"). Provided that no Senior Indebtedness Default exists either at the time of such Subordinate Payment
Default Notice or upon the expiration of the Standstill Period, then, in the event that the Companies shall fail to cure such Subordinate
Payment Default prior to the expiration of the Standstill Period, Subordinated Creditor shall be permitted to exercise all of its
rights and remedies under the loan documents relating to the Subordinated Indebtedness (including, any Collateral Remedy) without
the Senior Agent's prior written consent; subject however, to the superior lien of Senior Agent. Notwithstanding the foregoing,
if at the conclusion of the Standstill Period Senior Agent has initiated and is diligently pursuing exercise of rights and remedies
with respect to all or any material portion of the Collateral, Subordinated Creditor shall not exercise any Collateral Remedy.


 


(c)          Subordinated
Creditor acknowledges and agrees that until the payment in full of all Senior Indebtedness, the Senior Agent and the Senior Lenders
shall have the right to enforce rights, exercise remedies (including, but not limited to, the right to credit bid the Senior Indebtedness)
and make determinations regarding the release, disposition or restrictions with respect to the Collateral without any consultation
with or the consent of Subordinated Creditor. In exercising rights and remedies with respect to the Collateral, the Senior Agent
and the Senior Lenders may enforce provisions of the Senior Loan Agreement and related documents and exercise remedies thereunder,
all in such order and in such manner as they may determine in the exercise of their sole discretion. Such exercise and enforcement
shall include the rights of an agent appointed by them to sell or otherwise dispose of Collateral upon foreclosure, to incur expenses
in connection with such sale or disposition, and to exercise all the rights and remedies of a secured creditor under applicable
law.


 


(d)          If
in connection with the exercise of the Senior Agent's remedies in respect of Collateral, the Senior Agent, on behalf of the Senior
Lenders, releases its Lien on any part of the Collateral, then so long as (i) such release of Liens is in connection with a sale
or other disposition of such Collateral after the commencement of an Insolvency Proceeding or otherwise conducted in accordance
with applicable law, (ii) the proceeds of such sale are applied to the Senior Indebtedness in accordance with the provisions of
the Senior Loan Agreement, and (iii) any excess proceeds of such sale (after payment in full of the Senior Indebtedness) are applied
to the Subordinated Indebtedness or as otherwise required in accordance with applicable law, then the Liens of the Subordinated
Creditor on such Collateral shall be automatically, unconditionally and simultaneously released. The Subordinated Creditor promptly
shall execute and deliver to the Senior Agent such termination statements, discharges, releases and other documents as the Senior
Agent may request to effectuate or confirm such release.


 




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(e)          If
in connection with any sale, lease, exchange, transfer or other disposition (a "Disposition") of any Collateral
by any Company permitted under the terms of the Senior Loan Agreement or related documents or to which the Senior Agent and/or
the Senior Lenders have otherwise consented, the Senior Agent, on behalf of itself and the Senior Lenders, releases its Lien on
any part of the Collateral subject to such Disposition, then the Liens, if any, of the Subordinated Creditor on such Collateral
shall be automatically, unconditionally and simultaneously released, provided, however, in the event that after the
refinancing of the Fort Worth Texas Property the Senior Agent on behalf of itself and the Senior Lenders, maintains a Lien on any
part of the Fort Worth Texas Property subject to a Lien in connection with such refinancing, then the Subordinated Creditor may
maintain a Lien on such part of the Fort Worth Texas Property which such Lien shall be subject to the terms and conditions of this
Agreement. The Subordinated Creditor promptly shall execute and deliver to the Senior Agent or the applicable Company such termination
statements, discharges, releases and other documents as the Senior Agent or such Company may request to effectuate or confirm such
release.


 


(f)          Until
the payment in full of the Senior Indebtedness, Subordinated Creditor hereby irrevocably constitutes and appoints the Senior Agent
or any of its officers or employees on behalf of the Senior Agent, as the attorney-in-fact for the Subordinated Creditor (which
appointment is coupled with an interest) with the power and authority in the place and stead of the Subordinated Creditor, from
time to time in Senior Agent's discretion, for the purpose of this Section 5, to take any and all appropriate action and
to execute any and all documents and instruments which may be necessary to accomplish the purposes of this Section 5, including,
but not limited to, any endorsements or other instruments of transfer or release.


 


6.            Notice
of Default. So long as the Senior Indebtedness shall remain outstanding, each of the Subordinated Creditor and the Senior Agent
shall provide to each other written notice of any default under the Subordinated Indebtedness and the Senior Indebtedness, as applicable,
provided, however, that neither party shall be liable to the other for any failure to do so.


 


7.            Bankruptcy
and Insolvency. In the event of any receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization
or arrangement with creditors, whether or not pursuant to bankruptcy law, the sale of all or substantially all of the assets of
any of the Companies, dissolution, liquidation or any other marshalling of the assets or liabilities of any of the Companies (an
"Insolvency Proceeding"), the Subordinated Creditor will file all claims, proofs of claim or other instruments
of similar character necessary to enforce the obligations of the applicable Company in respect of the Subordinated Indebtedness
and will hold in trust for the Senior Agent and promptly pay over to the Senior Agent in the form received (except for the endorsement
of the Subordinated Creditor where necessary) for application to the then-existing the Senior Indebtedness, any and all moneys,
dividends or other assets received in any such proceedings on account of the Subordinated Indebtedness, unless and until the Senior
Indebtedness has been paid in full and the Senior Agent's Lien in the Collateral has been terminated. If the Subordinated Creditor
shall fail to take any such action, the Senior Agent, as attorney-in-fact for the Subordinated Creditor, may take such action on
the Subordinated Creditor's behalf. The Subordinated Creditor hereby irrevocably appoints the Senior Agent, or any of its officers
or employees on behalf of the Senior Agent, as the attorney-in-fact for the Subordinated Creditor (which appointment is coupled
with an interest) with the power but not the duty to demand, sue for, collect and receive any and all such moneys, dividends or
other assets and give acquittance therefor and to file any claim, proof of claim or other instrument of similar character, to vote
claims comprising Subordinated Indebtedness to accept or reject any plan of partial or complete liquidation, reorganization, arrangement,
composition or extension and to take such other action in the Senior Agent's own name or in the name of the Subordinated Creditor
as the Senior Agent may deem necessary or advisable for the enforcement of the agreements contained herein; and the Subordinated
Creditor will execute and deliver to the Senior Agent such other and further powers-of-attorney or instruments as the Senior Agent
may request in order to accomplish the foregoing. If the Senior Agent desires to permit the use of cash collateral or to provide
post-petition financing to the Company, the Subordinated Creditor shall not object to the same or assert that its interests are
not being adequately protected.


 




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8.          Transfer
of Subordinated Indebtedness. The Subordinated Creditor will mark its books conspicuously to evidence the subordination effected
hereby. Without the prior written consent of the Senior Agent, the Subordinated Creditor will not assign, transfer or pledge any
other person any of the Subordinated Indebtedness, other than a person who agrees in writing to become a party hereto and to succeed
to the rights and to be bound by all of the obligations of such Subordinated Creditor hereunder. Without the prior written consent
of the Senior Agent, the Subordinated Creditor will not agree to a discharge or forgiveness of the same.


 


9.          Appointment
of Senior Agent as Agent. The Subordinated Creditor hereby appoints the Senior Agent as its agent to perfect by possession
or control its lien in any of the Collateral (a) which lien is capable of being perfected by possession or control and (b) that
is, at any time, delivered to and in the possession, or is under the control of the Senior Agent, subject always to the rights
of the Senior Agent as prior lien holder. The Senior Agent acknowledges that it holds such Collateral for the benefit of the Subordinated
Creditor upon and subject to the terms contained in this Agreement. The Senior Agent agrees to turn over to the Subordinated Creditor
with appropriate endorsements any Collateral in its possession upon payment in full of the Senior Indebtedness. Notwithstanding
the foregoing, Senior Agent shall not be liable to the Subordinated Creditor for any action or failure to act pursuant to this
Section 9 unless the same constitutes gross negligence or willful misconduct on the part of Senior Agent.


 


10.         Continuing
Effect; Amendments to Senior Loan Documents and Subordinated Indebtedness. This Agreement shall constitute a continuing agreement
of subordination, and the Senior Agent may, without notice to or consent by the Subordinated Creditor, modify any term of the Senior
Indebtedness in reliance upon this Agreement. Without limiting the generality of the foregoing, the Senior Agent and Senior Lenders
may, at any time and from time to time, without the consent of or notice to the Subordinated Creditor and without incurring responsibility
to the Subordinated Creditor or impairing or releasing any of the Senior Agent's rights or any of the Subordinated Creditor's obligations
hereunder:


 


(a)          change
the interest rate or change the amount of payment or extend the time for payment or renew or otherwise alter the terms of any the
Senior Indebtedness or any instrument evidencing the same in any manner;


 


(b)          sell,
exchange, release or otherwise deal with any property at any time securing payment of the Senior Indebtedness or any part thereof;


 




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(c)          release
anyone liable in any manner for the payment or collection of the Senior Indebtedness or any part thereof;


 


(d)          exercise
or refrain from exercising any right against any of the Companies or any other person (including, but not limited to, the Subordinated
Creditor); and


 


(e)          apply
any sums received by the Senior Agent and/or the Senior Lenders, by whomsoever paid and however realized, to the Senior Indebtedness
in such manner as the Senior Agent shall deem appropriate.


 


Until the Senior Indebtedness
is paid in full, notwithstanding anything to the contrary in any document or agreement evidencing the Subordinated Indebtedness,
the Subordinated Creditor shall not and the Companies shall not, without the prior written consent of the Senior Lender, agree
to any amendment or supplement to or consent to any departure or waiver from, or other modification to, any document or agreement
evidencing the Subordinated Indebtedness.


 


11.         No
Commitment. None of the provisions of this Agreement shall be deemed or construed to constitute or imply any commitment or
obligation on the part of the Senior Agent or Senior Lenders to make any future loans or other extensions of credit or financial
accommodations to the Companies or to any affiliates of the Companies.


 


12.         Notice.
All notices and other communications hereunder shall be in writing and shall be (i) personally delivered, (ii) transmitted by registered
mail, postage prepaid, or (iii) transmitted by facsimile, in each case addressed to the party to whom notice is being given at
its address as set forth below:


 


If to the Subordinated Creditor:


 


Thermo Credit,
LLC


639 Loyola
Avenue, Suite 2565


New Orleans
LA 70113


Attention:
Seth Block


Facsimile:


 


With a copy
to:


 


Gardere Wynne
Sewell LLP


1601 Elm Street,
Suite 3000


Dallas, TX
75201


Attention:
Steven S. Camp


Facsimile:
214-999-3354


 




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If to Senior Agent
or Senior Lender, at the address set forth below:


 


c/o Downtown Capital
Partners, LLC


One Barker Ave., Suite 260


White Plains, NY 10601


Attention: Gary Katz


Facsimile: 914-698-9614


 


With a copy to:


 


Greenberg Traurig,
LLP


One International Place


Boston, MA 02110


Attn: Jeffrey M. Wolf,
Esq.


Facsimile: 617-310-6001


 


or at such other address as may hereafter
be designated in writing by that party. All such notices or other communications shall be deemed to have been given on (i) the
date received if delivered personally, (ii) the date of posting if delivered by mail, or (iii) the date of transmission if delivered
by telecopy.


 


13.         Conflict
in Agreements. If the subordination provisions of any instrument evidencing Subordinated Indebtedness conflict with the terms
of this Agreement, the terms of this Agreement shall govern the relationship between the Senior Agent and the Subordinated Creditor.


 


14.         No
Waiver; No Amendment. No waiver shall be deemed to be made by the Senior Agent of any of its rights hereunder unless the same
shall be in writing signed on behalf of the Senior Agent, and each such waiver, if any, shall be a waiver only with respect to
the specific matter or matters to which the waiver relates and shall in no way impair the rights of the Senior Agent or the obligations
of the Subordinated Creditor to the Senior Agent in any other respect at any time. This Agreement may be amended only upon the
written agreement of Subordinated Creditor and Senior Agent.


 


15.         Binding
Effect; Acceptance. This Agreement shall be binding upon the Subordinated Creditor and the Subordinated Creditor's heirs, legal
representatives, successors and assigns and shall inure to the benefit of the Senior Agent and its participants, successors and
assigns irrespective of whether this or any similar agreement is executed by any other creditor of the Company. Notice of acceptance
by the Senior Agent of this Agreement or of reliance by the Senior Agent upon this Agreement is hereby waived by the Subordinated
Creditor.


 


16.         Miscellaneous.
The paragraph headings herein are included for convenience of reference only and shall not constitute a part of this Agreement
for any other purpose. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all
of which together shall constitute one instrument.


 




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17.         Governing
Law; Consent to Jurisdiction and Venue: Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance
with the substantive laws (other than conflict laws) of the State of New York. Each party consents to the personal jurisdiction
of the state and federal courts located in the State of New York in connection with any controversy related to this Agreement,
waives any argument that venue in any such forum is not convenient, and agrees that any litigation initiated by any of them in
connection with this Agreement may be venued in either the state or federal courts located in the City of White Plains or the City
of New York in the State of New York. THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED ON OR PERTAINING
TO THIS AGREEMENT.


 


[Signature Page to Follow]


 




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IN WITNESS WHEREOF,
the Subordinated Creditor has executed this Agreement as of the date and year first above-written.


 


	 	THERMO CREDIT, LLC
	 	 
	 	By:	/s/ Seth Block
	 	Name:	Seth Block
	 	Title:	Executive Vice President


 


Agreed and Acknowledged:


 


DCP TELETOUCH LENDER, LLC,


as Senior Agent


 


	By:	/s/ Gary Katz	 
	Name:	Gary Katz	 
	Title:	Authorized Representative	 


 




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Acknowledgment by Companies


 


The undersigned, being the Companies referred
to in the foregoing Agreement, hereby (i) acknowledges receipt of a copy thereof, (ii) agree to all of the terms and provisions
thereof, (iii) agree to and with the Senior Agent that it shall make no payment on the Subordinated Indebtedness that the Subordinated
Creditor would not be entitled to receive under the provisions of the Agreement, (iv) agree that any such payment will constitute
a default under the Senior Loan Agreement, and (v) agrees to mark its books conspicuously to evidence the subordination of the
Subordinated Indebtedness effected hereby.


 


TELETOUCH COMMUNICATIONS, INC.


 


	By:	/s/ Thomas A. Hyde, Jr.	 
	Name:	Thomas A. Hyde, Jr.	 
	Title:	President and Chief Operating Officer	 


 


PROGRESSIVE CONCEPTS, INC.


 


	By:	/s/ Thomas A. Hyde, Jr.	 
	Name:	Thomas A. Hyde, Jr.	 
	Title:	President and Chief Executive Officer	 


 




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EXHIBIT
A


 


SUBORDINATED
INDEBTEDNESS


 


Indebtedness arising under that certain
LOAN AND SECURITY AGREEMENT dated as of APRIL 30, 2008 between Subordinated Creditor and the Companies, as amended
through the date hereof, including by that certain SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT dated as of even date
herewith, as the same may be amended, restated, supplemented, renewed or extended from time to time, the "Subordinate Loan
Agreement") and the Loan Documents (as such term is defined in the Subordinate Loan Agreement) executed in connection
therewith, including, without limitation, that certain Amended and Restated Subordinated Promissory Note, dated February 8, 2013
(the "Subordinated Note").


 




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