Document:

Second Amendment to Loan & Security Agreement

 EXHIBIT 10.23 
 SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT AND MODIFICATION 
 OF PROMISSORY NOTE

 THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT AND MODIFICATION OF PROMISSORY NOTE (this
“Amendment”) dated as of August 1, 2009 (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, severally and in solido,
“Debtor”). 
 RECITALS 
 WHEREAS, Debtor and Lender entered into that certain LOAN AND SECURITY AGREEMENT dated as of April 30, 2008 (as amended,
modified, and restated from time to time, the “Agreement”), pursuant to which Lender agreed to make certain credit facilities available to Debtor on the terms and conditions set forth therein; 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) (the “Note”); and 
 WHEREAS, in connection with the Agreement, TCI executed and delivered to Lender that certain Deed of Trust, Security Agreement, Assignment of Leases, Assignment of Rents, and Financing Statement dated as of even date with the Note,
naming Jack Eumont as Trustee and Lender as Beneficiary, recorded under Clerk’s File No. 2008-0026698 of the Official Public Records of Real Property of Smith County, Texas, (“Smith County Deed of Trust”) and
covering certain real property situated in Smith County, Texas, as more particularly described on Exhibit “A” to the Smith County Deed of Trust; 
 WHEREAS, in connection with the Agreement, PCI executed and delivered to Lender that certain Deed of Trust, Security Agreement, Assignment of Leases, Assignment of Rents, and Financing Statement dated as of
even date with the Note, naming Jack Eumont as Trustee and Lender as Beneficiary, recorded under Clerk’s File No. D208219469 of the Official Public Records of Real Property of Tarrant County, Texas, (“Tarrant County Deed of
Trust” and together with the Smith County Deed of Trust, the “Deed of Trust”) and covering certain real property situated in Tarrant County, Texas, as more particularly described on Exhibit “A” to the
Tarrant County Deed of Trust; 
 WHEREAS, the parties desire to amend the Agreement, the Note, and the Deed of Trust pursuant to the
terms and conditions set forth herein; 
  

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 NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows: 
 Definitions. Capitalized terms used in this Amendment, to the extent
not otherwise defined herein, shall have the same meanings as in the Agreement, as amended hereby. 
 Amendments to Loan and Security
Agreement. 
 Section 1(h)(i) of the Agreement is hereby amended in its entirety as follows: 
 All present and future accounts, chattel paper (including electronic chattel paper), commercial tort claims, commodity accounts, commodity contracts,
deposit accounts, documents, financial assets, general intangibles, health care insurance receivables, instruments, investment property, letters of credit, letter of credit rights, payment intangibles, securities, security accounts, promissory
notes, note receivables, and security entitlements now or hereafter owned, held, or acquired. 
 Section 1(r) of the
Agreement is hereby amended in its entirety to read as follows: 
 “Excluded Assets” means the collective
reference to: 
 (i) Any lease, license, contract, property right or agreement to which Debtor or any Subsidiary of Debtor is a party or any
of its rights or interests thereunder (including, without limitation, the FCC Licenses and the AT&T Contracts and Accounts) if at any time the grant of a security interest hereunder shall constitute or result in a breach, termination or default
under any such lease, license, contract, property right or agreement; 
 (ii) the Excluded Pledged Equity Interest; and 
 (iii) all equipment and fixtures (owned by T-Mobile) of whatsoever kind and character now or hereafter possessed, held, acquired, leased or owned,
together with all replacements, accessories, additions, substitutions and accessions to all of the foregoing, and all records relating in any way to the foregoing that that are utilized by TCI in any improvements or alterations made to the premises
or real property pursuant to any lease or sublease entered into between TCI and T-Mobile. 
 Sections 1(t), 1(u), and 1(v) of
the Agreement are hereby amended in their entirety as follows: 
 Reserved. 
  

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 Section 1(ee) of the Agreement is hereby amended in its entirety as follows:

 “Indebtedness” means (i) all indebtedness, obligations, and liabilities of Debtor to Lender of any kind or character,
now existing or hereafter arising, whether direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several and in solido, or joint and several and in solido, under the Note, this Agreement or any of the other Loan
Documents, (ii) all accrued but unpaid interest on any of the indebtedness described in (i) above, (iii) all obligations of Obligors to Lender under the Loan Documents, (iv) all costs and expenses reasonably incurred by Lender in
connection with the enforcement of all or any part of the indebtedness and obligations described in (i), (ii) and (iii) above or the protection or preservation of, or realization upon, the Collateral securing all or any part of such
indebtedness and obligations, including without limitation all reasonable attorneys’ fees, and (v) all renewals, extensions, modifications and rearrangements of the indebtedness and payment obligations described in (i), (ii),
(iii) and (iv) above. 
 Section 1(hh) of the Agreement is hereby amended in its entirety as follows:

 “Loan Documents” means this Agreement, the Note, the Account Control Agreement, and the other agreements, instruments and
documents evidencing, securing, governing, guaranteeing or pertaining to the Loans. 
 Section 1(mm”) is hereby
added to the Agreement as follows: 
 “Material Transaction” means, a settlement or transaction or the functional equivalent
of any of the foregoing that has a Material Adverse Affect on the operations of the Debtor (including without limitation, the scale of operations) or the Collateral. 
 Section 1(mm’) is hereby added to the Agreement as follows: 
 “Material Transaction Deposit Condition” means, the payment of proceeds directly from the parties or parties to a Material Transaction
other than Debtor into an escrow account for the sole benefit of Lender all of the proceeds of that Material Transaction and otherwise in a manner reasonably satisfactory to the Lender. 
 Section 1(mm) of the Agreement is hereby amended in its entirety as follows: 
 “Monthly Step Down” shall mean, for each month, commencing with December, 2009, an amount equal to the average principal balance
outstanding of Non-Account Loans for that month divided by sixty (60). 
  

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 Section 1(nn”) is hereby added to the Agreement as follows: 
 “Non-Account Borrowing Base Component” means the sum of items (1), (2), (3), (4), (6), and (7) of the Borrowing Base. 
 Section 1(nn’) is hereby added to the Agreement as follows: 
 “Non-Account Loans” means Loans made under this Agreement based on the Non-Account Borrowing Base Component. 
 Section 1(nn) of the Agreement is hereby amended in its entirety as follows: 
 “Note” means, collectively, any promissory note evidencing all or part of the Indebtedness from time to time (as any such Note may be
amended, modified or restated from time to time), including but not limited to that certain Promissory Note dated as of the Closing Date, executed by Debtor in favor of Lender, in the original principal amount of $5,000,000.00 as increased to
$18,000,000.00. 
 Section (a’) is hereby added to the Agreement as follows: 
 “Account Control Agreement” means, that certain letter agreement dated August 1, 2009 by and among Bank of Texas, Debtor, and
Lender. 
 Section 1(vv’) is hereby added to the Agreement as follows: 
 “Second Amendment” means that certain Second Amendment to Loan and Security Agreement (‘Second Amendment”) by and
between Lender and Debtor dated as of August 1, 2009. 
 The first sentence of Section 2(b) of the Agreement is
hereby amended in its entirety as follows: 
 Debtor hereby agrees that Debtor is JOINTLY SEVERALLY AND IN SOLIDO liable for, and hereby
absolutely and unconditionally guarantees to Lender and its successors and assigns, the full and prompt payment (whether at stated maturity, by acceleration or otherwise) and performance of, all Indebtedness owed or hereafter owing to Lender by
Debtor. 
 The first sentence of Section 2(c) of the Agreement is hereby amended in its entirety as follows: 

Subject to the terms and conditions set forth in this Agreement and the other Loan Documents, Lender hereby agrees to lend to Debtor an aggregate sum
not to exceed at any time the lesser of (i) an amount equal to the Borrowing Base existing at such time or (ii)

  

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(A) EIGHTEEN MILLION AND NO/100 DOLLARS ($18,000,000.00) minus (B) the Reducing Loan Availability at such time (the “Revolving Credit
Facility”), on a revolving basis from time to time during the period commencing on the date hereof and continuing until January 31, 2012, or such other date as may be established by a written instrument between Debtor and Lender
from time to time (the “Revolving Credit Maturity Date”). 
 Section 2(d)(i)(4) of the Agreement
is hereby amended in its entirety as follows: 
 Sixty percent (60.00%) of Debtor’s Eligible Inventory; 
 Section 2(d)(i)(5) of the Agreement is hereby amended by deleting “and” following the “;” 
 Section 2(d)(i)(6) of the Agreement is hereby amended by adding “and” following the “;” 
 Section 2(d)(i)(7) is hereby added to the Agreement as follows: 
 Eighty-five percent (85.00%) of the amount of Debtor’s Eligible Notes; provided that in no event shall the aggregate amount of Debtor’s
Eligible Notes exceed $1,000,000; 
 The following is hereby added at the end of Section 2(d)(i) of the Agreement as
follows: 
 Notwithstanding the foregoing, in no event shall the Non-Account Borrowing Base Component exceed more than 33.3% of the amount
computed in clause (ii) of the first sentence of Section 2(c). 
 Section 2(d)(viii) is hereby added to the
Agreement as follows: 
 “Eligible Notes” means, at any time, all notes receivable owned by Debtor (and in the possession of
Debtor) created in the ordinary course of business and have been approved in writing in advance by Lender and satisfy the following conditions: 
  

	 	(1)	The note receivable is payable in U.S. Dollars by the maker; 

  

	 	(2)	The note receivable shall be ineligible if the maker is domiciled in any country other than the United States of America; 

  

	 	(3)	No payment default exists under the note receivable; 

  

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	 	(4)	The note receivable is not subject to any setoff, counterclaim, defense, dispute, recoupment, or negative adjustment other than normal discounts for prompt payment (provided,
however, that the portion of any such note that is not subject to any such setoff, counterclaim, defense, dispute, recoupment, or negative adjustment shall be an Eligible Note); 

  

	 	(5)	The maker is not insolvent or the subject of any bankruptcy or insolvency proceeding and has not made an assignment for the benefit of creditors, suspended normal business
operations, dissolved, liquidated, terminated its existence, ceased to pay its debts generally as they become due, or suffered a receiver or trustee to be appointed for any of its assets or affairs; 

  

	 	(6)	The note receivable shall be ineligible if and to the extent the aggregate of all note receivables issued by the maker when taken together with such note receivable, exceeds
$500,000. 

 Section 2(h)(ii) of the Agreement is hereby amended by deleting the “and” following
the “;” at the end of such Section 2(h)(ii). 
 Section 2(h)(iii) of the Agreement is hereby amended by
deleting the “.” at the end of such Section 2(h)(iii) and substituting “;” in place thereof. 
 Sections 2(h)(iv) and 2(h)(v) are hereby added to the Agreement as follows: 
 (iv) A commitment fee (“Commitment Fee
B”) equal to 1.875% of the amount set forth in clause (A) of the first sentence of Section 2(c) less $93,062.50. An amount equal to $41,937.50 of Commitment Fee B shall be due and payable on or before the execution and
delivery of the Second Amendment, $135,000.00 of Commitment Fee B shall be due and payable on or before August 1, 2010, and $67,500.00 of Commitment Fee B shall be due and payable on or before August 1, 2011; and 
 (v) A monitoring fee on the amount set forth in clause (A) of the first sentence of Section 2(c) from the effective date of the Second Amendment
to and including the Revolving Credit Maturity Date, at the rate of one tenth of one percent (0.10%) per month based on a 30 day month and the actual number of days elapsed. 
 Section 4(c) of the Agreement is hereby amended in its entirety as follows: 
  

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 Setoff. If an Event of Default shall have occurred and be continuing, Lender shall have the right to set
off and apply against the Indebtedness in such manner as Lender may determine, at any time and without notice to Debtor, any and all deposits (general or special, time or demand, provisional or final) or other sums at any time credited by or owing
from Lender to Debtor whether or not such Indebtedness is then due. As further security for such Indebtedness, Debtor hereby grants to Lender a security interest in all money, instruments, and other Property of Debtor now or hereafter held by
Lender, including, without limitation, Property held in safekeeping. In addition to Lender’s right of setoff and as further security for the Indebtedness, Debtor hereby grants to Lender a security interest in all deposits (general or special,
time or demand, provisional or final) and other accounts of Debtor now or hereafter on deposit with or held by Lender and all other sums at any time credited by or owing from Lender to Debtor. The rights and remedies of Lender hereunder are in
addition to any other rights and remedies (including, without limitation, other rights of setoff) which Lender may have. 
 Section 8(c) of the Agreement is hereby amended in its entirety as follows: 
 Loans and Guarantees. Debtor will not make
loans to or guarantee any Debt of any other Person, other than (i) the Loans outstanding on the Closing Date as set forth on Schedule 8(c) hereto, (ii) loans or advances to employees of Debtor not to exceed an aggregate principal amount of
FIFTY THOUSAND AND NO/100 DOLLARS ($50,000.00) outstanding at any time, (iii) loans or advances constituting Intercompany Debt permitted under Section 8(b)(ii) or Subordinated Debt permitted under Section 8(b)(xiv), (iv) loans or
advances constituting debt Investments permitted under Section 8(j), (v) accounts receivable for sales of inventory and other goods and services provided by Debtor to its respective customers, (vi) guarantees of Debt between or among,
and Intercompany Debt between or among, TCI, TLI, and PCI, (vii) guarantees of Debt of any Subsidiary of Debtor the equity interests or assets of which have been pledged to Lender, provided such guaranties are subordinated to Lender in a manner
satisfactory to Lender, (viii) letters of credit or guarantees on behalf of vendors and/or suppliers in the ordinary course of business consistent with Debtor’s past practices; (ix) loans approved by Lender in writing in advance for
inclusion in the Borrowing Base as Eligible Notes not to exceed ONE MILLION AND No/100 DOLLARS $1,000,000 outstanding at any time; and (x) guarantees of any Debt permitted under Section 8(b), provided that such guarantees are set forth on
Schedule 8(c) (as updated by Debtor from time to time). 
  

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 Section 9(b) of the Agreement is hereby amended in its entirety as follows:

 Debt Service Coverage. Maintain, as at the last day of each Fiscal Quarter (using an accrual method of accounting) during the periods set
forth below, a Debt Service Coverage ratio for the three (3) month period then ending of not less than the ratio set forth opposite such period: 
  

			
	 Applicable Period
	  	Ratio
	 Date of this Agreement to September 30, 2008
	  	1.10 to 1.00
	 October 1, 2008 to March 31, 2009
	  	1.15 to 1.00
	 April 1, 2009 to May 31, 2009
	  	1.20 to 1.00
	 June 1, 2009 to November 30, 2009
	  	1.00 to 1.00
	 December 1, 2009 to May 31, 2010
	  	1.05 to 1.00
	 June 1, 2010 to November 30, 2010
	  	1.10 to 1.00
	 December 1, to May 31, 2011
	  	1.15 to 1.00
	 On and after June 1, 2011
	  	1.20 to 1.00

 Section 9(d)(iii) of the Agreement is hereby amended in its entirety as
follows: 
 “Debt Service” means, for any applicable period, and determined on a consolidated basis, the sum of (a) total cash interest expense
on indebtedness for borrowed money of Debtor paid during such period plus (b) total scheduled principal payments on indebtedness for borrowed money of Debtor and its Subsidiaries made during such period plus (c) discount fees paid on
factoring of accounts receivable (classified as operating expenses in accordance with GAAP) determined on a consolidated basis for Debtor and its Subsidiaries for such period; provided that solely for purposes of calculating the Debt Service
Coverage Ratio for each Fiscal Quarter through May 31, 2010 (“Exclusion Period”), monthly principal payments (but not prepayments) by TCI to the GM Note Holders in excess of $75,000 during each such Fiscal Quarter shall be excluded
from the definition of Debt Service (in no event shall the amount so excluded exceed $1,050,000 in the aggregate during the entire Exclusion Period). “GM Note Holders” means collectively the holders listed in the table below of certain
individual promissory notes, with a combined initial principal amount of $1,500,000.00, issued by TCI on June 2, 2008 to redeem all of its outstanding redeemable common stock purchase warrants. 
  

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	 Individual Note Holder

	 William E. Cherry

	 Frank White

	 Michael Perry Thompson

	 Roger E. Mick

	 Frank O. Keener

	 Larry D. Haugen

	 Ronald Farmer

	 Lew Conner

	 James L. Caldwell

	 John C. Maggart

	 Matilda Gray Stream

	 GS Capital, LLC

 Section 12(b) of the Agreement is hereby amended in its entirety as follows:

 Performance Default. The failure of any Obligor to timely and properly observe, keep or perform any covenant or agreement, required
herein or in any of the other Loan Documents which is not cured within 30 days following written notice from Lender to such Obligor; provided that the foregoing notice and opportunity to cure in this subsection (b) will not be required with
respect to a payment default as set forth in Section 12(a) or with respect to a default under covenants set forth in Section 8 or Section 9; 
 Section 12(h) of the Agreement is hereby amended in its entirety as follows: 
 Reserved. 
 Section 12(k)
is hereby added to the Agreement as follows: 
 Material Transaction. The failure of Debtor to cause the Material Transaction Deposit
Condition to be fully satisfied when payments are due and payable to Debtor (or its designee) in accordance with the terms of the documents memorializing the Material Transaction. 
 Section 29 of the Agreement is hereby amended in its entirety as follows: 
 Sale of Factored Property from Lender to PCI. Debtor has requested that Lender sell the Factored Property to PCI and terminate the Factoring
Agreement. Lender hereby sells the Factored Property listed on Schedule 28 attached hereto to PCI, without representation, warranty, or recourse and on an AS-IS basis for the purchase price on Schedule 28 attached hereto (the
“Purchase Price”) and PCI hereby agrees to such sale. Lender and Debtor hereby agree that the Purchase Price shall be funded by an advance by Lender to Debtor under the Note. The Lender and PCI hereby agree that the Factoring
Agreement is terminated immediately following the sale described in this Section 29. 
  

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 Exhibit “A” of the Agreement is hereby amended in its entirety with Exhibit
“A” attached to this Amendment. 
 Modification of Note. 
 Debtor and Lender hereby renew and modify the Note and Debtor, jointly, severally and in solido, unconditionally promises to pay to
the order of Lender , without setoff, at its offices at 639 Loyola Avenue, Suite 2565, New Orleans, Louisiana 70113, or at such other place as may be designated by Lender, the lesser of (i) the original principal amount of EIGHTEEN MILLION AND
NO/100 DOLLARS ($18,000,000.00), or (ii) so much thereof as may from time to time be advanced and outstanding hereunder in immediately available funds, together with interest computed daily on the outstanding principal balance hereunder, at the
annual interest rate set forth in this Note (the “Rate”), and in accordance with the payment schedule, indicated below. 
 The first Sentence of Section 1 of the Note is hereby modified in its entirety as follows: 
 The Rate shall be a rate per annum
equal to the lesser of (a) the MAXIMUM RATE, or (b) the greater of (i) the PRIME RATE plus EIGHT PERCENT (8.00%) or (ii) FOURTEEN PERCENT (14.00%). 
 Section 4 of the Note is hereby modified in its entirety as follows: 
 Payment Schedule. Except as expressly provided herein to the contrary, all payments on this Note shall be applied in the following order of priority: (a) the payment or reimbursement of any reasonable
out-of-pocket costs and expenses (other than the outstanding principal balance hereof and interest hereon) of or incurred by Lender for which Debtor shall be obligated to pay or reimburse to Lender shall be entitled pursuant to the provisions of
this Note or the other Loan Documents, (b) the payment of accrued but unpaid interest thereon, (c) the payment of any unpaid fees for which Debtor shall be entitled pursuant to the provisions of this Note or the other Loan Documents, and
(d) the payment of all or any portion of the principal balance hereof then outstanding hereunder. If any payment of principal or interest on this Note shall become due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall in such case be included in computing interest in connection with such payment. This Note shall be due and payable as follows: 
  

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 Monthly payments of interest (computed on the average unpaid principal balance outstanding during that
month) shall be payable on the last day of each calendar month, commencing on August 31, 2009 and continuing until November 30, 2009; and 
 Principal of this Note shall be due and payable in monthly installments of the Monthly Step Down, payable on the last day of each calendar month, beginning December 31, 2009, and continuing regularly
thereafter until January 31, 2012, when the entire balance of principal and accrued and unpaid interest shall be due and payable. In addition, monthly payments of interest (computed upon the average unpaid principal balance during that month),
shall be due and payable on the same dates as, but in addition to, said installments of principal. 
 Subject to the terms and conditions
in the Loan Agreement, Debtor may borrow, repay and reborrow loans on a revolving basis at any time and from time to time, up to a maximum principal aggregate amount outstanding at any one time equal to the lesser of (i) the amount of the
Borrowing Base existing at such time, or (ii) the Revolving Credit Facility (such maximum principal amount being referenced to herein as the “Lender Commitment Amount”). Lender shall incur no liability for its refusal to advance funds
based upon its reasonable determination that any conditions precedent to such further advances set forth in the Loan Agreement have not been satisfied. 
 Lender’s records of the amounts borrowed and accrued and unpaid interest thereon from time to time shall be conclusive proof thereof absent manifest error. 
 Section 7 of the Note is hereby modified in its entirety as follows: 
 Except for required prepayments (1) in respect of the Monthly Step Down under Section 4(b), (2) for any Overadvance under Section 2(c)
of the Loan Agreement, if the Debtor prepays the outstanding portion of any of the Loans, in whole or in part, simultaneously with each such prepayment, Debtor shall pay to Lender a Prepayment Fee for such prepayment; provided if the maturity of
this Note is accelerated for any reason, including, without limitation, the occurrence of any Event of Default (including, 

  

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without limitation, any Event of Default under Section 12(k) of the Loan Agreement), shall constitute an evasion of the restrictions on prepayment set
forth herein and shall be deemed a voluntary prepayment. “Prepayment Fee” means a fee equal to two percent (2%) of any amount being prepaid. 
 Amendment to Tarrant County Deed of Trust. Section 2.04 of the Tarrant County Deed of Trust is hereby amended in its entirety as follows: 
 Limitation on Lien. In accordance with the Consent, the lien on the Property shall never exceed $5,000,000.00 even though the amount outstanding under the
Note might be greater than $5,000,000.00. “Consent” shall mean, collectively, the Notice and Consent executed by PCI, Jardine Capital Corp., and Lender dated as of April 30, 2008 and the Notice and Consent executed by PCI,
United Commercial Bank, and Lender dated as April 30, 2008. 
 Conditions Precedent. The obligations of Lender under
this Amendment shall be subject to the following condition precedent: 
 Debtor shall have executed and delivered to
Lender this Amendment and such other documents and instruments incidental and appropriate to the transaction provided for herein as Lender or its counsel may reasonably request. 
 Debtor shall have delivered to Lender a fully executed counterpart of the Account Control Agreement. 
 Debtor shall have paid $41,937.50 of the commitment fee described in Section 2(h)(iv) of the Agreement. 
 Payment of Fees and Expenses. Debtor further agrees to pay all reasonable fees of Lender in connection with the drafting and execution
of this Amendment. 
 Ratifications. Except as expressly modified and superseded by this Amendment, the Loan Documents
are ratified and confirmed and continue in full force and effect. The Loan Documents, as modified by this Amendment, continue to be legal, valid, binding and enforceable in accordance with their respective terms. Without limiting the generality of
the foregoing, Debtor hereby ratifies and confirms that all liens heretofore granted to Lender (including without limitation, the liens granted under the Deed of Trust) were intended to, do and continue to secure the full payment and performance of
the Indebtedness. Debtor agrees to perform such acts and duly authorize, execute, acknowledge, deliver, file and record such additional assignments, security agreements, modifications or agreements to any of the foregoing, and such other agreements,
documents and instruments as Lender may reasonably request in order to perfect and protect those liens and preserve and protect the rights of Lender in respect of all present and future Collateral. The terms, conditions and provisions of the Loan
Documents (as the same may have been amended, modified or restated from time to time) are incorporated herein by reference, the same as if stated verbatim herein. 
  

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 Representations, Warranties and Confirmations. Debtor hereby represents and warrants to Lender
that (a) this Amendment and any other Loan Documents to be delivered under this Amendment (if any) have been duly executed and delivered by Debtor, are valid and binding upon Debtor and are enforceable against Debtor in accordance with their
terms, except as limited by any applicable bankruptcy, insolvency or similar laws of general application relating to the enforcement of creditors’ rights and except to the extent specific remedies may generally be limited by equitable
principles, (b) no action of, or filing with, any governmental authority is required to authorize, or is otherwise required in connection with, the execution, delivery and performance by Debtor of this Amendment or any other Loan Document to be
delivered under this Amendment, and (c) the execution, delivery and performance by Debtor of this Amendment and any other Loan Documents to be delivered under this Amendment do not require the consent of any other person and do not and will not
constitute a violation of any laws, agreements or understandings to which Debtor is a party or by which Debtor is bound. 
 Release. Each Obligor hereby acknowledges and agrees that there are no defenses, counterclaims, offsets, cross-complaints, claims or demands of any kind or nature whatsoever to or against Lender or the terms and provisions of or
the obligations of such Obligor under the Loan Documents and the other agreements, instruments and documents evidencing, securing, governing, guaranteeing or pertaining thereto, and that no Obligor has any right to seek affirmative relief or damages
of any kind or nature from Lender. To the extent any such defenses, counterclaims, offsets, cross-complaints, claims, demands or rights exist, each Obligor hereby waives, and hereby knowingly and voluntarily releases and forever discharges Lender
and its predecessors, officers, directors, agents, attorneys, employees, successors and assigns, from all possible claims, demands, actions, causes of action, defenses, counterclaims, offsets, cross-complaints, damages, costs, expenses and
liabilities whatsoever, whether known or unknown, such waiver and release being with full knowledge and understanding of the circumstances and effects of such waiver and release and after having consulted legal counsel with respect thereto.

 Multiple Counterparts. This Amendment may be executed in a number of identical separate counterparts, each of which for all
purposes is to be deemed an original, but all of which shall constitute, collectively, one agreement. Signature pages to this Amendment may be detached from multiple separate counterparts and attached to the same document and a telecopy or other
facsimile of any such executed signature page shall be valid as an original. 
 Reference to Agreement. Each of the Loan
Documents, including the Agreement and any and all other agreements, documents, or instruments now or hereafter executed and delivered pursuant to the terms hereof containing a reference to the Agreement shall mean and refer to the Agreement as
amended hereby. 
  

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 Severability. Any provision of this Amendment held by a court of competent jurisdiction to be
invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable. 
 Headings. The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of
this Amendment. 
 NOTICE OF FINAL AGREEMENT 
 THE AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS AMENDED BY THIS AMENDMENT REPRESENT THE FINAL AGREEMENT BETWEEN AND AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN AND AMONG THE PARTIES. 
  

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 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	  	
		  		  	New Orleans, LA 70113

  

			
	By:	 	/s/ Jack Eumont
		 	Name: Jack Eumont
		 	Title: Executive Vice President

  

					
	With copies of notices to:	  		  	
	Gardere Wynne Sewell LLP	  	1000 Louisiana, Suite 3400	  	
		  		  	Houston, TX 77002
		  		  	Attention: Reuben D. Rosof

  

			
	DEBTOR: ADDRESS:
	TELETOUCH COMMUNICATIONS, INC.
		
	By:	 	/s/ Thomas A. Hyde, Jr.
		 	Name: Thomas A. Hyde, Jr.
		 	Title: President and COO
	
	TELETOUCH LICENSES, INC.
		
	By:	 	/s/ Thomas A. Hyde, Jr.
		 	Name: Thomas A. Hyde, Jr.
		 	Title: President
	
	PROGRESSIVE CONCEPTS, INC.
		
	By:	 	/s/ Thomas A. Hyde, Jr.
		 	Name: Thomas A. Hyde, Jr.
		 	Title: President and CEO

  

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 Exhibit ‘A’ 
 Form of Compliance Certificate 
 COMPLIANCE CERTIFICATE 
 This Compliance Certificate dated as of __________________ is prepared pursuant to Section 10(c) of the Loan and Security Agreement dated as of
April 30, 2008 (together with all amendments and modifications from time to time made thereto, the “Loan Agreement”), by and among Teletouch Communications, Inc., Teletouch Licenses, Inc. and Progressive Concepts, Inc. (collectively,
the “Debtor”) and Thermo Credit, LLC (“Lender”). Unless otherwise defined, terms used herein have the meanings provided in the Loan Agreement. 
 The undersigned hereby certifies to the Lender that to his knowledge (i) as of the day of this certificate, no Event of Default exists and (ii) all of the representations and warranties made by the Debtor in
Section 6 of the Loan Agreement are true and correct in all material respects on the date of this certificate as if made on this date. 
 The following
are the results of the financial covenants set forth in the Loan Agreement as of _____________: 
  

					
	 Covenant
	  	 Requirement
	  	 as of _________________

	Tangible Net Worth1
	  	3 $5,000,0002	  	    $_____________
	Debt Service Coverage Ratio	  	3 ___3 to 1.00	  	to 1.00
	Operating Income	  	3 $0	  	    $_____________

 The undersigned further certifies to the Lender that to his best knowledge the financial
statements delivered in connection with this certificate are true and correct in all material respects and fairly represent in all material respects the financial condition of the Debtor. 
  

			
	TELETOUCH COMMUNICATIONS, INC.
		
	By:	 	 
	Name:	 	 
	Title:	 	 

			
	
	TELETOUCH LICENSES, INC.
		
	Title By:	 	 
	Name:	 	 
	Title:	 	 
	
	PROGRESSIVE CONCEPTS, INC.
		
	Title By:	 	 
	Name:	 	 
	Title:	 	 

  

	1
	 If an Event of Default is continuing, a statement is required as to the nature thereof and the action which is proposed to be taken with respect thereto.

  

	2
	 After giving effect to any dividends and distributions paid or made as permitted under Section 8(e) of the Loan Agreement. 

  

	3
	 Specific requirement is set forth in Section 9(b) of the Loan Agreement. 

  

 16Exhibit (4)(j)

 EXHIBIT (4)(j) 
 FORM OF RIDER – RETIREMENT INCOME CHOICE 1.4 

			
	 

	  	 Home Office:
 4333 Edgewood Road N.E.
 Cedar Rapids, Iowa 52499
 (319)355-8511

 RETIREMENT INCOME CHOICE RIDER 
 This rider is issued as a part of the policy (contract) to which it is attached. Policy refers to the individual policy if the rider is attached to an individual annuity
or the group certificate if the rider is attached to a group annuity. 
 All provisions of the policy that do not conflict with this rider apply to this
rider. In the event of any conflict between the provisions of this rider and the provisions of the policy, the provisions of this rider shall prevail over the provisions of the policy. 
 Rider Data Specification 
  

			
	 Policy Number:
	  	12345
	 Rider Date:
	  	07/01/2009
	 Growth Rate Percentage:
	  	5.00%
		
	 Rider Fee Percentages:
	  	
	 Designated Allocation Group A:
	  	1.25%
	 Designated Allocation Group B:
	  	0.90%
	 Designated Allocation Group C:
	  	0.40%
		
	 Annuitant:
	  	John Doe
		
	 Annuitant’s Issue Age/Sex:
	  	35 / Male

 ARTICLE I 
 You may cancel this rider on the close of business before midnight of the thirtieth calendar day after you received it and no rider fees will be assessed. 
 If you elect this rider, 100% of your policy value must be in one or more of the designated investment options. 
 You can
generally transfer between the designated investment options as permitted under your policy; however, you cannot make transfers as provided for in the policy to a non-designated investment option while this rider is in force. If you wish to make a
transfer to a non-designated investment option, this rider must be terminated, as described in Article IV, prior to making the transfer. 
 DEFINITIONS:

 Terms used that are not defined in this rider shall have the same meaning as those in your policy. 
 Designated Investment Options 
 Investment options authorized for use
with this rider and identified by us as designated investment options. 
 Excess Withdrawal 
 The excess of a gross partial withdrawal over the rider withdrawal amount remaining prior to the withdrawal, if any. 
 Gross Partial Withdrawal 
 The amount by which will be deducted from
your policy value as a result of each partial withdrawal. 
  

						
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 ARTICLE I CONTINUED 
 Rider Anniversary 
 The anniversary of the rider date. 
 Rider Fee 
 The fees charged for the benefits under this rider. The fees will be charged on a rider quarterly basis by the Company.

 Rider Monthiversary 
 The same day of the month as the
rider date, or the next business day if our Administrative Office or the New York Stock Exchange are closed. 
 Rider Quarter 
 The last business day of each rider quarter, or the next business day if our Administrative Office or the New York Stock Exchange are closed. 
 Rider Withdrawal Amount 
 The maximum amount that can be withdrawn
from the policy each rider year without causing an excess withdrawal under the terms of this rider and thus reducing the withdrawal base. This amount will change if the withdrawal base changes. 
 Rider Year 
 Each twelve-month period following the rider date.

 Valuation Period 
 The period of time from one
determination of the value of a subaccount to the next. Such determinations are made when the value of the assets and liabilities of each subaccount is calculated. This is generally the close of business on each day on which the New York Stock
Exchange is open. 
 Withdrawal Base 
 The amount used to
calculate the rider withdrawal amount and the rider fee. This amount cannot be taken as a lump sum. 
 ARTICLE II 
 RIDER FEES 
 The rider fee is deducted on each rider quarter in
arrears. The fee is calculated and stored at issue and at each subsequent rider quarter for the upcoming quarter. The rider fee percentage will not change during the first five rider years, and will only change thereafter due to an automatic
step-up. You will be notified of any increase in the rider fee percentage. A portion of this fee will also be deducted when the rider is terminated based on the number of days that have elapsed since the previous rider quarter. 
 The stored fee will be adjusted for new deposits, transfers among designated investment options and excess withdrawals made during the rider quarter. 
 Fees will be calculated and stored on the day the rider is issued and at the beginning of each rider quarter. They will be deducted automatically from each investment
option on a pro rata basis at the end of each rider quarter. The annual fee percentages for each designated allocation group are shown on page 1, in the Rider Data Specification section. 
 The quarterly fee is calculated as follows: 
 Multiply (1) by (2) divided by (3) multiplied by (4).

  

	1)	Withdrawal Base; 

  

	2)	Sum of each designated allocation group rider fee percentage multiplied by the applicable designated allocation group value; 

  

	3)	Total policy value; 

  

	4)	Number of days remaining in the rider quarter divided by the number of days within the applicable rider year. 

 Please see the Appendix attached to this rider which illustrates how the rider fee is calculated. 
  

						
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 ARTICLE III 
 GUARANTEED LIFETIME WITHDRAWAL BENEFIT 
 Under this rider, we guarantee that you can receive up to the rider withdrawal amount each rider
year, regardless of the policy value, (either through withdrawals or payments, where payments are equal to the rider withdrawal amount if your policy value equals zero) until the annuitant’s death. 
 The withdrawal percentage is determined by the attained age (age at last birthday) of the annuitant at the time of the first withdrawal of any amount from the policy
value taken on or after the rider anniversary following the annuitant’s 59th birthday. Once the withdrawal percentage is established, it may only be changed by an upgrade or automatic step-up and redetermined at that time. Upon automatic
step-up, the withdrawal percentage will be reset based on the attained age at the time of the automatic step-up. The withdrawal percentages are shown in the table below. 
  

				
	 Attained Age
	  	Withdrawal
Percentage	 
	0 - 58	  	0.0	% 
	59 - 69	  	4.0	% 
	70 - 79	  	5.0	% 
	80 +	  	6.0	% 

 If the annuitant is not yet 59 on the rider date, the withdrawal percentage will be zero until the rider
anniversary following the annuitant’s 59th birthday. Withdrawals prior to age 59 1/2 will be subject to the 10% penalty tax. 
 Withdrawals will reduce
the policy value of the policy to which this rider is attached. If the policy value equals zero, you cannot make subsequent premium payments and all other policy features, benefits and guarantees are no longer available. Also, if the policy value
equals zero, you will need to request payments by selecting the amount and frequency in accordance with the policy provisions to which this rider attaches, equal to the rider withdrawal amount. Once the payment amount and frequency are established,
they cannot be changed and no additional withdrawals will be allowed. 
 ISSUE AGE AND SURVIVAL 
 The benefits under this rider depend on the annuitant being alive at the time of withdrawal and the amount of the benefit depends on the issue age of the annuitant. Proof
of survival and the issue ages may be required by the Company. 
 If the annuitant’s age has been misstated, this rider’s fees and benefits will be
adjusted to the amounts which would have been calculated for the correct age. However, if this rider would not have been issued had the age not been misstated, the rider is treated as if it never existed, and any fees charged for this rider would be
returned. If withdrawals under the provisions of the rider have already commenced and the misstatement caused the rider withdrawal amount to be overstated, any withdrawal in excess of the correct rider withdrawal amount will be considered an excess
withdrawal and will impact the withdrawal base and rider withdrawal amount. If overpayments occurred when the sum of the accumulated values in all the investment options was zero, the amount of that overpayment will be deducted from one or more
future payments until this amount is paid in full. 
 RIDER WITHDRAWAL AMOUNT 
 The rider withdrawal amount will be equal to the greater of 1) and 2), where: 
  

	1)	is the withdrawal percentage multiplied by the withdrawal base; 

  

	2)	is an amount equal to the minimum required distribution amount, if any. Prior to the 1st rider anniversary, this amount is based on the initial policy value on the rider date. After
this time, the minimum required distribution is calculated based on the rules established by the IRS. The minimum required distribution may only be used if all of the following are true: 

  

	 	A)	the policy to which this rider is attached is a tax-qualified policy for which IRS minimum required distributions are required, 

  

	 	B)	the minimum required distributions do not start prior to the annuitant’s attained age 70 1/2, 

  

	 	C)	the minimum required distributions are based on either the Uniform Lifetime table or the Joint Life and Last Survivor Expectancy table, 

  

	 	D)	the minimum required distributions are based on age of the living annuitant. The minimum required distributions can not be based on the age of someone who is deceased,

  

	 	E)	the minimum required distributions are based only on the policy to which this rider is attached, and 

  

	 	F)	the minimum required distributions are only for the current rider year. Amounts carried over from past rider years are not considered. 

  

						
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	  	(3	) 	 	(Income-Single)

 ARTICLE III CONTINUED 
 If any of the above are not true, then 2) is equal to zero and it is not available as a rider withdrawal amount. 
 If you withdraw less than the
rider withdrawal amount in a rider year, the unused portion cannot be carried over to the next rider year. 
 WITHDRAWAL BASE 
 The withdrawal base is used to calculate the rider withdrawal amount. On the rider date, the initial withdrawal base is equal to the policy value (less any premium
enhancements if the rider is added in the first policy year). During any rider year, the withdrawal base is increased by subsequent premium payments (not including premium enhancements, if any), and is reduced for excess withdrawals. 
 On each rider anniversary, the withdrawal base will be set to the greatest of: 
  

	1)	The current withdrawal base; 

  

	2)	The policy value on the rider anniversary; 

  

	3)	The highest policy value on a rider monthiversary for the current rider year; or 

  

	4)	The current withdrawal base immediately prior to rider anniversary processing increased by the growth rate percentage. 

 Item 3) above will be zero if there have been any excess withdrawals in the current rider year. Item 4) above will be zero after the 10th rider anniversary or
if there have been any withdrawals in the current rider year. 
 AUTOMATIC STEP-UP FEATURE 
 The rider receives an automatic step-up on the rider anniversary if the withdrawal base is set equal to the policy value or the highest policy value on a rider
monthiversary. This feature does not require the termination of the existing rider. This rider will continue with the same rider date and features. The rider fee and withdrawal percentages may be changed due to an automatic step-up, but there will
be no increase in the rider fee percentage during the first five rider years. Following the fifth rider anniversary, the rider fee percentage may be increased due to an automatic step-up, but will not increase more than 0.75% from the initial rider
fee percentages shown on page 1. 
 You have the right to reject an automatic step-up within 30 days following a rider anniversary, if the rider fee
percentage increases. If you reject an automatic step-up, you must notify us in a manner which is acceptable to us, however you are eligible for future automatic step-ups. Changes as a result of the automatic step-up feature will be reversed. Any
increase in the rider fee or withdrawal percentages will also be reversed. 
 WITHDRAWAL BASE ADJUSTMENTS 
 Gross partial withdrawals, taken in a rider year, less than or equal to the rider withdrawal amount will not reduce the withdrawal base. Excess withdrawals will reduce
the withdrawal base by the withdrawal base adjustment. The withdrawal base adjustment is the greater of 1) and 2), where: 
  

	1)	is the excess withdrawal amount; and 

  

	2)	is the result of (A multiplied by B), divided by C, where: 

  

	 	A)	is the excess withdrawal; 

  

	 	B)	is the withdrawal base prior to the excess withdrawal amount; and 

  

	 	C)	is the policy value after the rider withdrawal amount has been withdrawn, but prior to the withdrawal of the excess withdrawal amount. 

  

						
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	  	(4	) 	 	(Income-Single)

 ARTICLE IV 
 CONTINUATION 
 In the case of spousal joint owners where one spouse is the annuitant, if the spouse who is not the annuitant dies and the
surviving spouse is the sole beneficiary, the surviving spouse may elect to continue the policy and rider. In the case of spousal joint owners where one spouse is the annuitant, if the spouse who is the annuitant dies, this rider will terminate.

 In the case of non-spousal joint owners where an owner who is not the annuitant dies, the surviving owner (who is also the sole designated beneficiary)
may elect to receive lifetime income payments under this rider instead of receiving any benefits applicable to the policy. The lifetime income payments must begin no later than 1 year after the owner’s death and will be equal to the rider
withdrawal amount divided by the number of payments made per year. Once the payments begin, no additional premium payments will be accepted and no additional withdrawals will be paid. 
 ANNUITIZATION 
 On the maximum annuity commencement date, as described in your policy, you will have the option to
receive lifetime income payments that are no less than your rider withdrawal amount each year. This option will also guarantee that the sum of all income payments received over time will equal or exceed the policy value on the maximum annuity
commencement date. If the annuitant should die before the sum of all income payments received equals or exceeds the policy value on the maximum annuity commencement date, the annuitant’s beneficiary will receive a final payment equal to the
difference. 
 RIDER UPGRADE 
 You may elect, in writing,
to upgrade the withdrawal base to the policy value within 30 days after the fifth rider anniversary and every fifth rider anniversary thereafter, subject to the issue age restrictions on the new rider. If an upgrade is selected, this rider will
terminate and a new rider with the same features will be issued with a new rider date. The new rider will have its own growth rate percentage and rider fee percentages which may not be the same as this rider’s percentages. 
 At the time upgrade, the rider withdrawal amount will be recalculated based on the new withdrawal base. 
 The new rider date will be the date the Company receives all information necessary, at our Home Office, in a written form acceptable to the Company, to process the upgrade. 
 TERMINATION 
 This rider will terminate upon the earliest of:

  

	1)	the date the policy to which this rider is attached terminates; 

  

	2)	the date the policy to which this rider is attached is assigned or if the owner is changed without our approval; 

  

	3)	the date of the annuitant’s death; 

  

	4)	the date you elect to upgrade (as described in Article IV of this rider); 

  

	5)	the date you elect to receive annuity payments under your policy; and 

  

	6)	the date you notify us in writing of your intention to terminate this rider (this date must be within 30 days after the fifth rider anniversary and every fifth rider anniversary
thereafter). 

 Termination of the rider will result in the loss of all benefits provided by the rider. 
 Signed for us at our home office. 
  

					
			
	

	 		 	

	SECRETARY	 		 	PRESIDENT

  

						
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	  	(5	) 	 	(Income-Single)

 APPENDIX 
 The
quarterly fee is calculated as follows: 
 Multiply (1) by (2) divided by (3) multiplied by (4) where: 
  

	1)	Withdrawal Base 

  

	2)	Sum of each designated allocation group rider fee percentage multiplied by the applicable designated allocation group value 

  

	3)	Total policy value 

  

	4)	Number of days in the rider quarter divided by the number of days within the applicable rider year 

 The fee adjustment for additional premium payments and excess withdrawals is calculated as follows: 
 Multiply (1) by
(2) divided by (3) multiplied by (4) where: 
  

	1)	Withdrawal base change (i.e. withdrawal base after the transaction minus the withdrawal base before the transaction) 

  

	2)	Sum of each designated allocation group rider fee percentage multiplied by the applicable designated allocation group transaction amount 

  

	3)	Total transaction amount 

  

	4)	Number of days remaining in the rider quarter divided by the number of days within the applicable rider year 

 The fee adjustment for fund transfers is calculated as follows: 
 Multiply
(1) by (2) divided by (3) multiplied by (4) where: 
  

	1)	Withdrawal base 

  

	2)	Sum of each designated allocation group rider fee percentage multiplied by the applicable designated allocation group transaction amount 

  

	3)	Total policy value 

  

	4)	Number of days remaining in the rider quarter divided by the number of days within the applicable rider year 

 The following two examples use assumed fees and values listed in the table below. The assumed rider year is not a leap year. 
  

										
	 Designated
Allocation Group
	  	Fee	 	 	Initial
Policy Value	  	Additional Premium
Used in Example 2
	 Group A
	  	2.50	% 	 	$	50,000	  	$	5,000
	 Group B
	  	2.40	% 	 	$	30,000	  	$	3,000
	 Group C
	  	2.30	% 	 	$	20,000	  	$	2,000

 Example 1: Calculation at rider issue for first quarter fee assuming an initial withdrawal base of
$100,000. 
 = 100,000 * [(50,000*0.0250) + (30,000*0.0240) + (20,000*0.0230)] / 100,000 * (91/365)
 = 100,000 * (1,250 + 720 + 460) / 100,000 * (91/365)
 = 100,000 * 2,430/100,000 * (91/365)
 = 2,430 * (91/365)
 = $605.84 
 Example 2: Calculation for first quarter
fee assuming initial withdrawal base from Example 1 above, plus adjustment for additional premium payment of $10,000 made with 20 days remaining in the first rider quarter (invested as shown above). The withdrawal base change and total transaction
amount equal $10,000. 
 Fee adjustment as follows: 
 = 10,000 * [(5,000*0.0250) + (3,000*0.0240) + (2,000*0.0230)] / 10,000 * (20/365)
 = 10,000 * (125 + 72 + 46) / 10,000 *
(20/365)
 = 10,000 * 243/10,000 * (20/365)
 = 243 * (20/365)
 = $13.32 
 Total fee assessed at end of first rider quarter (assuming no further rider fee adjustments): 
 = 13.32 +
605.84 
 = $619.16 
  

						
	 RGMB 37 0809
	  	(A-1	) 	 	(Income-Single)

 The following three examples use assumed fees and values listed in the table below. The assumed rider year is not a leap
year. 
  

													
	 Designated
Allocation Group
	  	Fee	 	 	Policy Value	  	Partial Withdrawal
Used in Example 4	  	Fund Transfer
Used in Example 5
	 Group A
	  	2.50	% 	 	$	49,000	  	$	-5,000	  	$	-5,000
	 Group B
	  	2.40	% 	 	$	29,000	  	$	-3,000	  	$	3,000
	 Group C
	  	2.30	% 	 	$	19,000	  	$	-2,000	  	$	2,000

 Example 3: Calculation for second quarter fee at beginning of second rider quarter, assuming withdrawal
base of $110,000 and policy value of $97,000 invested as above. 
 = 110,000 * [(49,000*0.0250) + (29,000*0.0240) + (19,000*0.0230)] /
97,000 * (91/365)
 = 110,000 * (1,225 + 696 + 437) / 97,000 * (91/365)
 = 110,000 * 2,358/97,000 * (91/365)
 =
2,674.02 * (91/365)
 = $666.67 
 Example
4: Calculation for second quarter fee assuming beginning values as in Example 3 above, plus adjustment for partial withdrawal of $10,000 taken with 40 days remaining in the second rider quarter. Assumes withdrawal percentage of 5%, policy value
of $97,000 prior to the transaction and change in withdrawal base as follows: 
 Rider Withdrawal Amount (RWA) = Withdrawal Base * Withdrawal Percentage =
110,000 * .05 = $5,500 
 Excess Withdrawal = Difference between assumed withdrawal amount and RWA = 10,000 - 5,500 = $4,500 
 Withdrawal Base Adjustment = Max (Excess Withdrawal, Excess Withdrawal * Withdrawal Base prior to withdrawal / Policy Value after RWA has been withdrawn but before excess
withdrawal) = Max [4,500, 4,500 * 110,000 / (97,000-5,500)] = Max (4,500, 5,409.84) = $5,409.84 
 Fee adjustment as follows: 
 = -5,409.84 * [(5,000*0.0250) + (3,000*0.0240) + (2,000*0.0230)] / 10,000 * (40/365)
 = -5,409.84 * (125 + 72 + 46) / 10,000 * (40/365)
 = -5,409.84 * 243/10,000 * (40/365)
 = -131.46 * (40/365)
 = $-14.41 
 Total fee assessed at end of second rider quarter
(assuming no further rider fee adjustments): 
 = 666.67 - 14.41 
 = $652.26 
 The new Withdrawal Base = $110,000 - $5,409.84 =
$104,590.16 
 Example 5: Calculation for fund transfer occurring during second quarter with 25 days remaining in the rider quarter, assuming
beginning values as in Example 3 and withdrawal adjustment as in Example 4 above. 
 Withdrawal Base = $104,590.16 and assumed policy value of $90,000. Fund
transfer amount of $5,000 as allocated in table above. 
 Fee adjustment as follows: 
 = 104,590.16 * [(-5,000*0.0250) + (3,000*0.0240) + (2,000*0.0230)] / 90,000 * (25/365)
 = 104,590.16 * (-125 + 72 + 46) / 90,000 * (25/365)
 = 104,590.16 * -7/90,000 * (25/365)
 = -8.13 * (25/365)
 = $-0.56 
 Total fee assessed at end of second rider quarter (assuming no further rider fee adjustments): 
 = 652.26 - 0.56 
 = $651.70 
  

						
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