Document:

exv10w1

 

Exhibit 10.1

FORBEARANCE AGREEMENT, CONSENT AND WAIVER

     This FORBEARANCE AGREEMENT, CONSENT AND WAIVER, dated as of April 11, 2008 (this “Agreement”),
by and among TROPICANA ENTERTAINMENT, LLC, a Delaware limited liability company (“Trop
Entertainment”), TROPICANA FINANCE CORP. (“Trop Finance”), the undersigned affiliates of Trop
Entertainment (each of the foregoing, an “Obligor,” and collectively, the “Obligors”), WILLIAM J.
YUNG III (“Yung”), DONNA MORE (“More”), WILMINGTON TRUST COMPANY, as successor Trustee (in such
capacity, the “Indenture Trustee”) under that certain Indenture dated as of December 28, 2006 (as
the same has been or may be supplemented, the “Indenture”), pursuant to which Trop Entertainment
and Trop Finance issued $960,000,000 in principal amount of 9 5/8% Senior Subordinated Notes due
2014 (the “Notes”), and the undersigned holders of the Notes (the “Noteholders”). Capitalized
terms used but not defined herein shall have the meanings ascribed thereto in the Indenture.

     WHEREAS, Trop Entertainment is a party to that certain Credit Agreement dated as of January 3,
2007, as the same has been or may be amended (the “Credit Agreement”);

     WHEREAS, Trop Entertainment is a party to that certain Forbearance Agreement, Consent and
Waiver, dated as of December 12, 2007 (the “Bank Forbearance Agreement”);

     WHEREAS, on January 28, 2008, the Indenture Trustee issued to the predecessor Trustee under
the Indenture and Trop Entertainment a Notice of Substitution of Trustee and to Trop Entertainment
a Notice of Default (the “January 28 Notice”), providing notice, inter alia, of a
Default under Section 4.06 of the Indenture (the “Section 4.06 Default”);

     WHEREAS, on January 28, 2008, the Indenture Trustee filed its Verified Complaint in the action
entitled Wilmington Trust Company, as Indenture Trustee for Tropicana Entertainment, LLC and
Tropicana Finance 9 5/8 % Senior Subordinated Notes Due 2014, directly, and derivatively on behalf
of Tropicana Entertainment, LLC v. Tropicana Entertainment, LLC et al., C.A. No. 3502-VCN (the
“Delaware Action”) in the Chancery Court for the State of Delaware (the “Chancery Court”);

     WHEREAS, on January 29, 2008, the predecessor Trustee under the Indenture notified the
Indenture Trustee and Trop Entertainment of its contention that the appointment of the Indenture
Trustee as successor trustee was defective since the signing parties did not certify as to their
holdings of the Notes and since the letter was not signed by “Holders” of the Notes as required by
Section 7.08 of the Indenture, and as a result, the appointment of the Indenture Trustee as
successor Trustee under the Indenture was ineffective;

     WHEREAS, on February 19, 2008, the predecessor Trustee under the Indenture notified the
Indenture Trustee and Trop Entertainment that on February 15, 2008 it received notice from the
Holders of a majority in principal amount of the Notes of the removal of the predecessor Trustee
and the appointment of the Indenture Trustee as successor Trustee, and acknowledged that it had
been replaced as Trustee under the Indenture by the Indenture Trustee;

 

 

     WHEREAS, on February 20, 2008, the Indenture Trustee issued to Tropicana Entertainment, LLC a
second Notice of Default providing notice, inter alia, of a Section 4.06 Default,
and a Default under Section 4.06 will ripen into an Event of Default on April 20, 2008 (the
“Acknowledged Event of Default”);

     WHEREAS, the Obligors have requested that the Indenture Trustee and the Noteholders forbear
from exercising their rights and remedies under the Indenture regarding the Acknowledged Event of
Default during the period (the “Forbearance Period”) from April 20, 2008, until the earlier to
occur of (i) May 15, 2008, (ii) the failure of Brown Rudnick Berlack Israels LLP to receive the
Forbearance Fee (as defined herein) prior to 5:00 pm Eastern Daylight Time on May 1, 2008, and
(iii) the occurrence of any Termination Event (as defined herein) occurring on or after April 20,
2008 (such earliest date, the “Forbearance Termination Date”), and to make certain other agreements
and provide certain consents and waivers in respect of the Indenture as set forth herein; and

     WHEREAS, as an accommodation to the Obligors, and in order to explore a consensual
restructuring of the obligations owing under the Indenture and otherwise, the Indenture Trustee and
the Noteholders have agreed to the foregoing request, subject in all respects, however, to the
terms and conditions set forth in this Agreement;

     NOW THEREFORE, based on these premises, and in consideration of the mutual promises contained
herein and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the undersigned parties hereby agree as follows:

     1. Forbearance. All rights and remedies of the Indenture Trustee and the Noteholders
in connection with the Section 4.06 Default, the Acknowledged Event of Default, and the occurrence
of any of the matters listed on the attached Schedule 1 entitled “Non-Termination Events” (the
“Non-Termination Events”) are hereby reserved, and nothing set forth herein or contemplated hereby
is intended to be, nor shall be construed as, a waiver or acquiescence to the Section 4.06 Default,
the Acknowledged Event of Default, the Non-Termination Events, or any other current or future
Default under the Indenture nor constitute or be construed as an agreement by the Indenture Trustee
or the Noteholders to forbear from the exercise of any rights and remedies available to them under
the Indenture or otherwise, all of which rights and remedies are hereby expressly reserved;
provided, however, that except as otherwise specifically provided herein, the Indenture Trustee and
the Noteholders shall, during the Forbearance Period, forbear from issuing (i) a Notice of
Acceleration with respect to the Acknowledged Event of Default or (ii) a Notice of Acceleration or
a Notice of Default with respect to any of the Non-Termination Events, and shall comply with the
restrictions on the prosecution of the claims asserted in the Delaware Action as provided for in
this Agreement; and provided, further, that the Indenture Trustee and the Noteholders shall be free
to exercise any or all of their rights and remedies arising under the Indenture with regard to the
Section 4.06 Default, the Acknowledged Event of Default, and the Non-Termination Events at any time
after the Forbearance Termination Date.

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     2. Termination Event. For purposes hereof, the term “Termination Event” shall mean
the existence of any of the following:

(a) the acceleration of the maturity of any obligations under the Credit Agreement or the
occurrence of a Default under the Credit Agreement or the Bank Forbearance Agreement that is
not timely cured or the subject of a forbearance agreement between Borrowers and Credit
Suisse, as Administrative Agent, under the Credit Agreement;

(b) the occurrence of any Default under the Indenture other than (i) the Acknowledged
Default or (ii) the occurrence of a Non-Termination Event;

(c) the filing of a bankruptcy case by or against any of the Obligors, other than the filing
of an involuntary bankruptcy petition against any of the Obligors by the Indenture Trustee,
the Noteholders, or their respective affiliates in the circumstance in which no Termination
Event exists;

(d) the revocation, denial, failure to renew or suspension of any license or permit covering
any casino or gaming facility of any Obligor by any gaming authority of any jurisdiction,
the appointment of a receiver, conservator or similar official with respect to any such
gaming facility, or the grant of a power of attorney or issuance of an order, decree or
instrument conferring managerial control over any such gaming facility to any person or
entity other than an Obligor, excluding any actions taken by the New Jersey Casino Control
Commission (the “CCC”) with respect to Adamar of New Jersey, Inc. (“Adamar”) or any of its
affiliates or by the Indiana Gaming Commission or its designees with respect to Aztar
Indiana Gaming Company LLC or any of its affiliates;

(e) the transfer, sale or disposition of all or substantially all of the assets of any of
the Obligors, regardless of whether such transaction is otherwise permitted by the
Indenture; provided, however, that the existence as of the Effective Date of any definitive
documentation (as the same may be amended from time to time), or entering into any
definitive documentation (as the same may be amended from time to time) after the Effective
Date, to effect a sale of the Obligors’ businesses located in Atlantic City, Evansville and
Vicksburg (the “Pending Sales”) shall not constitute a Termination Event; provided, however,
that the Indenture Trustee and the Noteholders reserve, and are free during the
effectiveness of this Agreement to pursue their rights with respect to the Obligors’
compliance with the Indenture; and provided further, however, that the Obligors also
reserve, and are free during the effectiveness of this Agreement to pursue, their rights
under the Indenture, including, but not limited to, responding in a legal proceeding
commenced by the Indenture Trusteee or the Noteholders or any other action taken by the
Indenture Trustee or the Noteholders pursuant to the previous proviso;

(f) except (i) as may be required by generally accepted accounting principles in the United
States, (ii) for actions taken with respect to the Pending Sales, or (iii) for the conduct
of the Obligors’ businesses in the ordinary course, in each case, that impact on the
Obligors’ net operating loss, tax credits, or the tax basis of the Obligors’ assets, the
occurrence of any event (x) giving rise to a change in the classification or treatment of
any of the Obligors for federal, state or local tax purposes (including, but not limited to,
changes caused by elections or revocations or rescissions of elections), or (y) affecting

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the tax attributes (including, but not limited to, net operating losses, tax credits, or tax
basis in assets) of any of the Obligors;

(g) the sale, transfer, conveyance, or other disposition of, or the incurrence of any lien,
security interest, or other encumbrance on, directly or indirectly, (i) any equity in or
assets of the Tropicana Resort and Casino in Las Vegas, Nevada, (the “Trop Las Vegas”) or
(ii) the ownership interests in such equity or assets, or the execution of any agreement in
connection with any such transaction other than a commitment letter in connection with the
provision of debtor in possession financing to the Obligors in connection with a chapter 11
bankruptcy case or the use of the cash collateral of the lenders under that certain Credit
Agreement, dated as of January 3, 2007 (as amended from time to time), entered into by and
among Tropicana Las Vegas Resort and Casino, LLC (f/k/a Wimar LandCo, LLC), a Delaware
limited liability company, Tropicana Las Vegas Holdings, LLC (Wimar LandCo Intermediate
Holdings, LLC), a Delaware limited liability company, the Lenders (as such term is defined
therein), and Credit Suisse, as administrative agent and collateral agent for the Lenders;

(h) the commencement of any legal proceedings in any court or governmental body of competent
jurisdiction by or on behalf of any Obligor pursuant to which any legal remedy or relief is
sought with respect to, or which would be binding upon, or which would restrict, restrain or
enjoin the Indenture Trustee or the Noteholders;

(i) a breach of any of the covenants contained in Section 6 hereof;

(j) any Obligor making a payment to any affiliate of such Obligor that is not itself an
Obligor in the form of a dividend or similar payment that is a return on equity, a payment
out of the ordinary course of business or a payment not otherwise contemplated by this
Agreement; provided, however, that payment of management fees and other ordinary course
payments to Obligors or to affiliates of Columbia Sussex shall not be a Termination Event;

(k) the failure to meet the deadline for any of the milestones set forth in the
Restructuring Milestones Schedule annexed hereto as Exhibit 1; and

(l) except as otherwise provided herein, any Obligor consummates, or enters into an
agreement concerning, a transaction outside of the ordinary course of business, including,
without limitation, any transaction involving (i) the sale of assets for an amount greater
than $5 million or (ii) the incurrence of any indebtedness for borrowed money in an amount
greater than $5 million.

Upon the occurrence of a Termination Event, except for the provisions of Paragraph 6(i) below,
which shall survive and remain effective, this Agreement shall terminate without notice and, if
such Termination Event occurs during the Forbearance Period, the Indenture Trustee and the
Noteholders may at any time thereafter proceed to exercise any and all of their rights and
remedies, including without limitation, their rights and remedies in connection with the
Acknowledged Event of Default and any other Defaults under the Indenture or rights under this
Agreement; provided, however, that, except in the case of a breach of Section 5 hereof, the

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Indenture Trustee and/or the Noteholders shall not accelerate the maturity of any obligations under
the Indenture on less than 24 hours written notice to counsel to the Obligors.

     3. Representations and Warranties.

          (a) Representations and Warranties of the Obligors. In order to induce the
Indenture Trustee and the Noteholders to enter into this Agreement, each of the Obligors makes the
following representations and warranties, all of which shall survive the execution and delivery of
this Agreement:

               (i) The Obligors have all requisite corporate, partnership or other power and authority to
execute, deliver and perform their obligations under this Agreement. This Agreement has been duly
authorized, executed and delivered by each Obligor, and does not conflict with, violate or result
in a breach of or require any consent under (i) any applicable law or regulation or any of the
terms of the charter or by-laws (or equivalent constitutional documents) of the Obligors, or (ii)
any agreement or instrument to which any Obligor is a party or to which it or any of its assets is
bound or subject; and

               (ii) This Agreement constitutes the legal, valid and binding obligation of the Obligors,
enforceable against them in accordance with its terms.

          (b) Representations and Warranties of the Noteholders and Indenture Trustee. In order
to induce the Obligors to enter into this Agreement, each of the Indenture Trustee and Noteholders
makes the following representations and warranties, all of which shall survive the execution and
delivery of this Agreement: 

               (i) The Noteholders and Indenture Trustee each have all requisite corporate, partnership or
other power and authority to execute, deliver and perform their obligations under this Agreement.
This Agreement has been duly authorized, executed and delivered by each Noteholder and the
Indenture Trustee, and does not conflict with, violate or result in a breach of or require any
consent under (i) any applicable law or regulation or any of the terms of the charter or by-laws
(or equivalent constitutional documents) of the Noteholders or the Indenture Trustee, or (ii) any
agreement or instrument to which any Noteholder or the Indenture Trustee is a party or to which it
or any of its assets is bound or subject; and

               (ii) This Agreement constitutes the legal, valid and binding obligation of the Noteholders and
Indenture Trustee, enforceable against them accordance with its terms.

     4. Effectiveness. This Agreement shall only become effective (the “Effective Date”)
if and when each of the Obligors, Yung, More, the Indenture Trustee, and each of the Noteholders
for which a signature line appears below shall have executed this Agreement, and this Agreement
shall remain effective from the Effective Date through the earlier to occur of a Termination Event
and the Forbearance Termination Date.

     5. Forbearance Fee. On or before May 1, 2008, the Obligors shall pay or cause to be
paid to Brown Rudnick Berlack Israels LLP, on behalf of Noteholders, in immediately available
funds, a non-refundable forbearance fee in the amount of (i) $3 million or (ii) such lesser amount
as may be agreed to by the Obligors, the Indenture Trustee, and the Noteholders based on an

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analysis of the Obligors’ financials undertaken in good faith by the Obligors’ and the
Noteholders’ respective financial advisors (the “Forbearance Fee”); provided, however, that in the
event the Forbearance Fee is not so received by Brown Rudnick Berlack Israels LLP prior to 5:00 pm
Eastern Daylight Time on May 1, 2008, this Agreement shall terminate immediately and without notice
to the Obligors.

     6. Further Covenants.

          (a) Retention and Payment of Professionals. Concurrent with or prior to the execution
of this Agreement, the Obligors shall have entered into agreements providing for the payment of the
fees and expenses of Brown Rudnick Berlack Israels LLP, Sills Cummis & Gross P.C., and Jefferies &
Company, Inc., in the form and substance attached hereto (collectively, the “Fee Agreements”), and
Trop Entertainment shall have paid or caused to be paid the retainers or initial payments due under
the Fee Agreements. Trop Entertainment further shall pay or cause to be paid the fees and expenses
of (i) a tax advisor to be retained by the Indenture Trustee or the Noteholders at a later date,
pursuant to an agreement on terms and conditions acceptable to the Indenture Trustee or the
Noteholders, whichever engages such tax advisor, in any event in an amount not to exceed $20,000,
and (ii) the Indenture Trustee and its outside counsel, Pryor Cashman LLP, within 30 days of the
receipt of invoices from said parties.

          (b) Delaware Litigation. Concurrently with the execution of this Agreement, or as soon
as practicable thereafter, Trop Entertainment, Trop Finance, and Aztar Corporation (collectively,
the “Trop Defendants”) shall withdraw the Motion for Preliminary Injunctive and Declaratory Relief
filed in the Delaware Action. During the Forbearance Period, the Trop Defendants, Yung, More and
the Indenture Trustee shall take all necessary steps to stay and continue, without prejudice, all
motions, discovery and other proceedings in the Delaware Action and the Trop Defendants shall not
seek to enjoin the acceleration of the Notes. All pending discovery demands served by any party in
the Delaware Action shall be deemed adjourned, sine die. The parties shall cooperate in the
implementation of such continuance.

          (c) Communications Regarding Potential Appeal by Justice Stein. Except as required by
applicable law or regulation, from and after the Effective Date (i) without the express written
consent of the Indenture Trustee, neither the Obligors nor any of their agents, representatives,
attorneys or other professionals, and (ii) without the express written consent of the Obligors,
neither the Indenture Trustee and the Noteholders nor any of their agents, representatives,
attorneys or other professionals, shall advise, advocate a position, consult with, or (in the case
of the Obligors) assist Justice Gary S. Stein (“Justice Stein”) or any of his professionals in
connection with any appeal by Justice Stein of the April 2, 2008 CCC ruling (the “April 2 CCC
Ruling”) denying Justice Stein’s petition for authorization to reconvey the former assets of Adamar
back to Adamar (“Justice Stein’s Petition”) or the decision whether to pursue such an appeal.

          (d) Cooperation. The Obligors shall work together and cooperate with the Noteholders
and the Indenture Trustee for the purpose of maximizing the net proceeds of the Pending Sales,
which efforts by the Obligors shall include, but not be limited to, consulting with and
facilitating input by the Noteholders in connection with (i) discussions with gaming regulators in
the state of Indiana regarding the sale of the Casino Aztar in Evansville; and (ii) discussions
with Justice Stein or the CCC regarding the sale of the Tropicana Casino and Resort

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in Atlantic City. Furthermore, the Obligors shall work together and cooperate with the Noteholders
and the Indenture Trustee to facilitate a smooth, cooperative and minimally disruptive transition
into bankruptcy, which efforts shall include, but not be limited to, involving the Noteholders and
the Indenture Trustee, to the extent reasonably possible, in discussions with gaming regulators in
advance of a bankruptcy filing by one or more of the Obligors.

          (e) Disclosure. Within three (3) business days after the Effective Date, the Obligors
shall provide to the Noteholders and the Indenture Trustee an oral report, to the knowledge of the
Obligors, regarding (i) the status of the Obligors’ negotiations with their unions; (ii) any
litigation or threatened litigation against any of the Obligors having a potential exposure of $20
million or more; (iii) the existence or status of any regulatory investigations or proceedings
concerning any of the Obligors’ gaming licenses; and (iv) the tax liabilities of the Obligors (the
“Disclosure Report”). The Obligors shall update the Disclosure Report no less frequently than
every five (5) business days with a written report.

          (f) Public Remarks. The Obligors, the Noteholders and the Indenture Trustee shall not
make or cause to be made any disparaging public remarks concerning the other or the merits of their
respective stated positions in the Delaware Action, the CCC proceedings, or any appeals from the
CCC proceedings; provided, however, that, with respect to the merits of such stated positions, they
may respond to requests for information or guidance from courts, gaming regulators or other
governmental authorities; and provided further that nothing herein shall limit (i) the rights of
the Indenture Trustee or the Noteholders to oppose any appeal by Justice Stein of the April 2 CCC
Ruling; (ii) in the event Justice Stein shall appeal all or any portion of the April 2 CCC Ruling,
the rights of the Indenture Trustee or the Noteholders to pursue an appeal of the CCC’s ruling
denying the Indenture Trustee’s request to participate in Justice Stein’s Petition and its denial
of the Indenture Trustee’s own petition; (iii) the rights of any party hereto to seek any other
relief before the CCC in connection with the sale of the Tropicana Casino and Resort in Atlantic
City; or (iv) the rights of any party hereto to take any other action in a court of competent
jurisdiction or before any governmental or regulatory body.

          (g) Payment of Indemnity Claim. On the Effective Date, the Obligors shall pay or shall
have caused to be paid to Brown Rudnick Berlack Israels LLP $2 million in immediately available
funds (the “Indemnity Payment”), which payment shall be made on account, and in full satisfaction,
of the Indenture Trustee’s claim for indemnity under the Indenture through the Effective Date.

          (h) Payments to Lenders. None of the Obligors shall make any payment to or for the
benefit of the lenders or the Administrative Agent under the Credit Agreement in the form of a
consent fee, waiver fee or forbearance fee, or otherwise, except for the payment of regularly
scheduled interest payments, without the express written consent of the Indenture Trustee and the
Noteholders.

          (i) Venue For Bankruptcy Filing. Notwithstanding the occurrence of a Termination Event
or the expiration of the Forbearance Period under the terms of this Agreement, each of the Obligors
hereby covenants and agrees that it shall not commence or cause any of the other Obligors to
commence a proceeding under the Bankruptcy Code in a jurisdiction other than the United States
Bankruptcy Court for the District of Delaware. The parties expressly agree that this covenant
shall survive this Agreement and, in the event of its violation, or the filing of an

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involuntary bankruptcy case against any of the Obligors in another jurisdiction, each of the
Obligors specifically agrees that it will not oppose, and will not encourage any other person to
oppose, the transfer of jurisdiction over any proceeding under the Bankruptcy Code to the
aforementioned jurisdiction.

          (j) Disclosure of Park Cattle Settlement. On the Effective Date, or as soon
thereafter as practicable, the Obligors shall publicly disclose the Stipulation for Entry of
Judgment Against Tropicana Casinos and Resorts, Inc., f/k/a/ Wimar Tahoe Corporation, Etc. entered
into by certain of the Obligors and Park Cattle Co. as of April 2, 2008, in a redacted form
agreeable to Park Cattle, the Obligors, the Noteholders and the Indenture Trustee.

          (k) Public Reporting of Agreement. Within three (3) days after the Effective Date,
Trop Entertainment shall file or cause to be filed a Form 8-K with the U.S. Securities and Exchange
Commission, in form and substance reasonably acceptable to the Indenture Trustee, generally
describing the existence of the Agreement and its terms.

          (l) Payment of Management Fees to CS. Obligors shall provide written notice to the
Indenture Trustee within three (3) business days after the payment of management fees and any other
ordinary course payments to Columbia Sussex Corporation or its non-Obligor affiliates.

     7. Miscellaneous.

          (a) This Agreement may be executed in separate counterparts by the parties hereto, each of
which when so executed and delivered shall be an original, but all of which shall constitute one
and the same agreement.

          (b) This Agreement and the rights and obligations of the parties hereunder shall be construed
in accordance with and be governed by the laws of the State of New York (without giving effect to
the conflict of law principles thereof).

          (c) The headings of the several sections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of this Agreement.

          (d) Time is of the essence of this Agreement.

          (e) This Agreement embodies the entire agreement and understanding among the parties relating
to the subject matter hereof and supersedes all prior proposals, negotiation, agreements and
understandings relating to such subject matter.

          (f) EACH OF THE OBLIGORS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY.

          (g) No failure to exercise nor any delay in exercising, on the part of the Obligors, the
Indenture Trustee or the Noteholders, of any right, remedy, power or privilege under the Indenture
or otherwise shall operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege operate as a waiver of any further or complete exercise

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thereof. No waiver shall be effective unless in writing. No waiver or condonation of any
breach on one occasion shall be deemed a waiver or condonation on any other occasion. In addition,
the Obligors, the Indenture Trustee and the Noteholders hereby agree that, during the pendency of
this Agreement, all statutes of limitation and similar laws, rules and equitable theories with
respect to the time in which the Indenture Trustee or any Noteholder, on the one hand, or the
Obligors, on the other hand, may bring any claim or action against the other shall be tolled and
that the passage of such time shall not otherwise operate to the detriment of the Obligors, the
Indenture Trustee or any Noteholder with respect to such rights.

[The remainder of this page is intentionally left blank; signature pages follow]

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written, by their respective officers hereunto duly authorized.

	 	 	 	 	 
	 	WILMINGTON TRUST COMPANY,
in its capacity as successor Trustee
 	 
	 	By:  	/s/ Patrick J. Healy 	 
	 	 	Name:  	Patrick J. Healy 	 
	 	 	Title:  	Vice President 	 
	 
	 	TROPICANA ENTERTAINMENT, LLC,
for or itself and its direct and indirect
subsidiaries that are issuers or guarantors
under the 9-5/8% Senior Subordinated Notes
Indenture dated as of Dec. 28,2006
 	 
	 	By:  	/s/ Theodore R. Mitchel 	 
	 	 	Name:  	Theodore R. Mitchel 	 
	 	 	Title:  	Vice President / CFO 	 
	 
	 	TROPICANA FINANCE CORP.
 	 
	 	By:  	/s/ Theodore R. Mitchel 	 
	 	 	Name:  	Theodore R. Mitchel 	 
	 	 	Title:  	Vice President / CFO 	 
	 
	 	COLUMBIA VICKSBURG PROPERTIES LLC
 	 
	 	By:  	/s/ Theodore R. Mitchel 	 
	 	 	Name:  	Theodore R. Mitchel 	 
	 	 	Title:  	Vice President / CFO 	 
	 
	 	CP LAUGHLIN REALTY, LLC
 	 
	 	By:  	/s/ Theodore R. Mitchel 	 
	 	 	Name:  	Theodore R. Mitchel 	 
	 	 	Title:  	Vice President / CFO 	 
	 

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	Agreed and Consented to for the Limited
Purposes of Paragraph 6(b) Hereof 	WILLIAM J. YUNG
 	 
	 	/s/ William J. Yung 	 
	 
	Agreed and Consented to for the Limited
Purposes of Paragraph 6(b) Hereof 	DONNA MORE
 	 
	 	/s/ Donna More 	 
	 

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[NOTEHOLDER SIGNATURE PAGES]

 

 

 

 

 

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Exhibit 1

RESTRUCTURING MILESTONES

	 	 	 
	EVENT	 	DEADLINE
	 
	 	 
	Due
Diligence: Complete responses to all reasonable due diligence requests have been received, provided that the Indenture Trustee’s and the Noteholders’ requests are given with a reasonable amount of time to respond.
	 	April 21, 2008
	 
	 	 
	Executed
Term Sheet: The parties have reached agreement on the material terms of a consensual restructuring, with such terms embodied in a signed term sheet, subject only to definitive documentation.
	 	May 15, 2008
	 
	 	 
	Chapter 11
Documents Completed: The parties have completed all documents necessary to effectuate a consensual deal through a pre-negotiated bankruptcy filing, including the Chapter 11 plan and all plan-related documents.
	 	June 6, 2008
	 
	 	 
	Filing
of Chapter 11 Case: The Chapter 11 case, including
the pre-negotiated plan, is filed.
	 	June 12, 2008

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Schedule 1

Non-Termination Events

     The following shall not constitute Termination Events under this Agreement:

     1. The settlement, and terms thereof, between any of the Obligors and Park Cattle Co.;
provided, however, that nothing in this Agreement shall limit or otherwise affect the rights of the
Indenture Trustee or the Noteholders with respect to such settlement.

     2. A request by any Obligor of waivers or consents from the Administrative Agent and the
lenders under the Credit Agreement, or the granting of any such waivers or consents, or the
agreement by the Administrative Agent under the Credit Agreement to enter into an amendment of the
Bank Forbearance Agreement or an new agreement with respect to forbearance by the Administrative
Agent or the lenders under the Credit Agreement in the exercise of their rights thereunder.

     3. Receipt by any Obligor of a qualified or limited scope going concern opinion from its
independent CPA firm.

     4. The failure to timely file a Form 10-K with the U.S. Securities and Exchange Commission.

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Exhibit 10.1

AGREEMENT

     THIS AGREEMENT (“Agreement”) is made and entered into as of this 5th day of June, 2007 (the
“Effective Date”), by and between Vehicle Manufacturers Services Inc. (“VMS”), located at 801 Motor
Parkway, Hauppauge, New York 11788 and SkyTel, a division of Bell Industries, Inc., a California
corporation (“SkyTel”), located at 500 Clinton Center Drive, Building Two, Clinton Mississippi
39056.

RECITALS

     A. The parties hereto are desirous of entering into a relationship aimed at selling and
marketing the SkyGuard Products (as defined below) and the SkyGuard Service Agreement (as defined
below) in the Automobile Industry (as defined below) in the Territory (as defined below) during the
Term (as defined below).

     B. VMS is desirous of being appointed as SkyTel’s sole U.S. sales representative, with the
exclusive right to market and sell the SkyGuard Products, and solicit subscriptions for and sell
the SkyGuard Service Agreement, to third parties within the Automotive Industry, which include but
are not limited to, all automotive manufacturers (OEM’s), automotive wholesalers, automotive
retailers, automotive port facilities, automotive mass retailers (e.g., Pep Boys and Circuit City),
and automotive consumers (end users), as well as recreational vehicles (e.g., ATVs, motorcycles,
and RVs).

     C. SkyTel is desirous of making such an appointment and securing the services of VMS to
market and sell its SkyGuard Products, and solicit subscriptions for and sell the SkyGuard Service
Agreement, through VMS’s network of distribution in the Territory.

     NOW THEREFORE, based upon the foregoing and the mutual promises of the parties set forth
herein, the parties hereto agree as follows:

ARTICLE I DEFINITIONS

     “Action” means any action, complaint, petition, investigation, suit or other proceeding,
whether civil or criminal, in law or in equity, or before any arbitrator or Governmental Entity.

     “Ancillary Products” means future warranty agreements and related ancillary products derived
from the Subscriber base of SkyGuard.

     “Affiliate” means, as applied to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with, that Person. For purposes of this
definition, “control” (including with correlative meanings, the terms “controlling”, “controlled
by”, and “under common control with”), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of that
Person through the ownership of voting securities, by contract or otherwise.

     “Automotive Industry” means, without limitation, automobile manufacturers (OEMs), automotive
wholesalers, automotive retailers, automotive port facilities, automotive mass
retailers (e.g., Pep Boys and Circuit City), and automotive consumers (end users), as well as
recreational vehicles (e.g., ATVs, motorcycles, and RVs).

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     “Confidential Information” shall have the meaning set forth in Exhibit D, Section 3.2.

     “Dealer” means retail automotive dealers.

     “Dealerships” means retail automotive dealerships.

     “Device” means any wireless telemetry radio, along with required accessories, that SkyTel
deems acceptable for use in connection with the Services.

     “Disclosing Party” shall have the meaning set forth in Exhibit D, Section 3.1.

     “Distributor” means (i) retail stores exclusively selling automotive parts, and (ii)
automotive distributors that sell wholesale automotive-related products to Dealers, all of which
shall be located within the United States.

     “Exclusivity Conditions” means those conditions set forth in Exhibit A hereto.

     “Fleethawk” means the SkyTel product and service sold under the trade name and/or trademark
“Fleethawk” or some successor trade name and/or trademark, which is used, among other things, for
tracking railroad cars, and airport and other vehicles.

     “GAAP” means generally accepted accounting principles in the United States, as in effect from
time to time.

     “Governing Board” shall have the meaning set forth in Section 6.01.

     “Governmental Entity” means any United States federal, state or local or any foreign
government, governmental authority, regulatory or administrative agency, governmental commission,
court or tribunal (or any department, bureau or division thereof).

     “GPRS Network” means the network selected by SkyTel to transport data produced by the Device,
or received by the Device. SkyTel at its sole discretion may choose which network most effectively
transports the data. SkyTel retains sole control and authority over the content, format, frequency
and use of information from any network selected into, or from, the Devices.

     “Person” means any individual, corporation, firm, partnership, joint venture, association or
other entity, in each case whether or not having a separate legal identity.

     “Products” shall mean collectively the Devices and accessories related to the Devices as
described in the SkyGuard Service Agreement offered for sale by SkyTel.

     “Receiving Party” shall have the meaning set forth in Exhibit D, Section 3.1.

     “Services” means the wireless automated motor vehicle and related service offerings provided
by or through SkyTel in the United States over the SkyTel Network and wireless networks owned and
operated by third parties pursuant to the SkyGuard Service Agreement, or
substantially similar document between SkyTel and the Subscriber, but specifically not
including any other wireless messaging services, devices or related products available through
SkyTel.

2

 

     “SkyGuard” means a business unit of Bell Industries which is a subdivision of SkyTel.

     “SkyGuard Accounting Ledger” shall have the meaning set forth in Section 8.01.

     “SkyGuard Service Agreement” means the agreement that each Subscriber shall be required to
execute with SkyTel, whether directly via SkyTel, or through any agent, subagent or authorized
third-party of SkyTel, which will establish the terms and conditions under which the parties shall
conduct business, and which at a minimum shall provide for a twelve (12) month service commitment
associated with each Device activated, with corresponding penalties associated with any early
termination or deactivation.

     “SkyTel Mark(s)” means the trade names, trademarks, logos and service marks owned by or
licensed to SkyTel and provided to VMS by SkyTel from time to time, as initially set forth on
Exhibit C attached hereto.

     “SkyTel Network” means, for purposes of this Agreement only, the two-way wireless messaging
systems operated by SkyTel in the United States.

     “Subscriber” shall have the meaning set forth in Section 2.03 and means any Person who has
subscribed to the Services and is the actual user of the Services offered hereunder.

     “Term” shall have the meaning set forth in Section 2.02.

     “Territory” shall mean the geographic area(s) throughout the United States, including Alaska,
Hawaii and its territories, where either the SkyTel Network or through a contractual arrangement
between SkyTel and a third party a GPRS Network, is available and operational and as either may be
modified from time to time by either SkyTel or the third party.

     “VMS Fee” means the results of the accounting formula set forth in Exhibit E hereto.

ARTICLE II GENERAL PROVISIONS

     2.01 Business Purpose; Appointment. The business purpose of this Agreement is to set
forth the agreement by and between the parties pursuant to how each party hereto shall diligently
and in good faith, develop and promote the SkyGuard Products and SkyGuard Service Agreement and the
Ancillary Products within the Automotive Industry throughout the Territory during the Term.
Subject to the ongoing satisfaction of the Exclusivity Conditions set forth on Exhibit A,
SkyTel appoints VMS as SkyTel’s exclusive sales representative in the Automotive Industry in the
Territory, to promote, market and sell the SkyGuard Products, and solicit subscriptions for and
sell the SkyGuard Service Agreement, in accordance with the terms and conditions set forth herein,
and VMS accepts such appointment. Notwithstanding anything to the contrary herein, (i) except as
expressly provided herein, this Agreement does not grant VMS an exclusive right or privilege to
assist SkyTel in the solicitation of other SkyTel products; (ii) VMS shall have no claim to
financial distribution or other compensation on account of any other SkyTel business secured by or
through persons other than VMS; (iii) VMS requests and warrants

3

 

that it will not undertake any efforts, directly or indirectly, with a goal of selling any
products reasonably believed to be competitive to any SkyTel product in the Automotive Industry in
the Territory, and (iv) SkyTel expressly reserves the right to promote, solicit, market and sell
other SkyTel products, including without limitation its Fleethawk product and related services, as
well as other wireless messaging.

     2.02 Term of the Agreement. This Agreement shall commence on the Effective Date and,
unless earlier terminated as provided in this Agreement, shall continue in existence for an initial
term of twenty (20) years, which term shall automatically renew for subsequent five (5) year
renewal terms unless either party delivers to the other party written notice of its intent not to
renew at least twelve (12) months prior to the expiration of the then-current term.

     2.03 Subscriber Status. The parties acknowledge that all end-users secured through
this relationship (“Subscribers”) shall be SkyTel Subscribers. SkyTel shall at all times have
access to the Subscriber base and all related Subscriber information created in accordance with
this Agreement. VMS shall similarly have access to the Subscriber base and all related Subscriber
information. Upon activation of the Service for the Subscriber and execution by Subscriber of the
SkyGuard Service Agreement, a vendor/customer relationship shall be established between SkyTel and
such Subscriber. Access to the Subscriber base notwithstanding, and independent of whether or not
VMS chooses to characterize Subscribers as customers, any Subscriber acquired under this Agreement
shall be a SkyTel customer. VMS shall not take any action to cause a Subscriber to transfer its
then active service account or business from SkyTel to any other competitive service or system.
Such prohibited actions include, but are not limited to, providing such Persons with any name,
address, telephone number or other identifying information concerning or relating to any one or
more Subscribers.

     2.04 New Business. The parties further agree that as other business opportunities
arise within the pool of Subscribers attained through the efforts of the parties, then the parties
will present the opportunity to the Governing Board for its recommendations to attempt to ensure
that no independent action taken by either party inadvertently results in a detriment or disruption
to the work undertaken hereunder. Decisions made by the Governing Board shall be in accordance
with the following general guidelines:

          (a) With respect to SkyTel and VMS separately, all pre-existing revenue streams and losses
attributed to customers in place at the time of the Effective Date of this Agreement shall remain
outside the reach of this Agreement.

          (b) The SkyGuard Accounting Ledger will be managed by the internal financial department of
Bell Industries, Inc. with VMS having full audit rights as outlined in this Agreement. SkyTel
shall pay VMS the VMS Fee on Bell Industries, Inc. checks.

          (c) All profits and losses incurred by either party as a result of activities undertaken
outside this Agreement, and without the use of any Subscriber or other data created by the parties
and their activities under this Agreement, shall not be run through the SkyGuard Accounting Ledger
and shall be solely attributable to the party undertaking such outside activity.

4

 

          (d) All profits and losses incurred by either party as a result of activities undertaken
outside this Agreement but which are undertaken through the use of any Subscriber and other data
created by the parties and their activities under this Agreement, including but not limited to
Subscriber lists, shall be governed by this Agreement; provided, however, the parties agree such
outside activity shall be presented to the Governing Board for review and recommendation of
appropriate fees and offsets to be paid or not paid by SkyTel and VMS.

     2.05 Trademarks and Logos. SkyTel hereby grants to VMS a non-exclusive,
non-transferable license, during the term of this Agreement, to use the SkyTel Marks identified in
Exhibit C, as amended from time to time, solely in connection with the marketing,
advertisement and promotion of the Products and the SkyGuard Service Agreement as contemplated
herein. VMS’s use of the SkyTel Marks and any marketing materials prepared outside this Agreement
regarding the SkyGuard Product and/or Services shall at all times be subject to the prior written
approval of SkyTel. VMS shall comply with all guidelines provided by SkyTel with respect to the
graphic reproduction and use of the SkyTel Marks. This license may not be sub-licensed, assigned
or otherwise transferred by VMS to any third Person without the express prior written consent of
SkyTel, and shall terminate upon a change of control of VMS without the prior written consent of
SkyTel. The license granted by SkyTel to VMS hereunder shall automatically and immediately
terminate upon any termination of this Agreement. The license granted to VMS herein is subject to
the reservation in SkyTel of all right, title and interest in and to the SkyTel Marks. The SkyTel
Marks are the valid and exclusive property of SkyTel, and VMS’s right to use the SkyTel Marks is
limited to and arises only out of the license granted hereunder. VMS shall not assert the
invalidity, unenforceability, or contest the ownership by SkyTel of the SkyTel Marks in any action
or proceeding of whatever kind or nature, and shall not take any action that may prejudice SkyTel’s
rights in the SkyTel Marks, render the same generic, or otherwise weaken their validity or diminish
their associated goodwill.

     2.06 Other Instruments. The parties hereto covenant and agree that they will execute
each such other and further instruments and documents as are or may become reasonably necessary or
convenient to effectuate and carry out the purposes of this Agreement.

ARTICLE III [PURPOSELY DELETED]

ARTICLE IV OBLIGATIONS OF THE PARTIES

     4.01 With regard to the start-up of the activities contemplated by this Agreement, the parties
recognize that each has incurred various historical expenses in the course of bringing their
respective contributions to this Agreement. By way of example, but not limitation, SkyTel has
incurred expenses in the development of the current version of SkyGuard Product and Services, and
VMS has incurred expenses in the establishment of its distribution network. Going forward, the
parties agree that their respective responsibilities are as set forth in Exhibit B hereto,
and the following guiding principals shall be adhered to as additional investment and expenses are
incurred in the furtherance of this Agreement:

5

 

          (a) With regard to the establishment of sufficient on-going Device inventory levels, the
parties shall work in good faith with one another to make decisions on when, with
whom or which and at what volumes Devices should be procured. SkyTel shall then issue the
appropriate purchase orders, and VMS shall perform its obligations hereunder to ensure collection
of the fees associated with the sale of the Devices by the various Distributors within ninety (90)
days of the date the Distributor is invoiced. Within one hundred (100) days of such invoice, funds
attributed to the efforts of the parties hereunder shall be provided to SkyTel and credited in the
SkyGuard Accounting Ledger. From the SkyGuard Accounting Ledger, SkyTel shall be reimbursed for
all appropriate expenses, documented in accordance with standard accounting practices, including by
way of example, reimbursement for the initial costs associated with the purchase of the Devices,
ensuring that SkyTel is made whole for its upfront investment in the Device inventory.

          (b) Notwithstanding the process outlined in (a) above for on-going Device inventory levels,
specifically regarding the task of establishing the initial inventory of ten thousand (10,000)
Devices, SkyTel shall issue the purchase order for the Devices and VMS shall undertake its normal
responsibilities at collecting the fees associated with the sale of the Devices; provided, however,
if for any reason the Device launch is not successful and the entire inventory of ten thousand
(10,000) Devices is not timely sold during the one year period from the Effective Date, and SkyTel
is not reimbursed for its out-of-pocket expenses within the aforementioned time frames, then VMS
agrees that it will become financially responsible for one-half of the Device units that are not
sold and for which no fees are collected, up to a maximum of five thousand (5,000) Devices.

          (c) All other financial responsibilities from the activities of the parties hereunder will be
the responsibility of SkyTel, and SkyTel will pay VMS the VMS Fee from its SkyGuard operations. To
this end, the parties agree to act in good faith to present extraordinary expenses to the Governing
Board for review and discussion prior to incurring any such expenses. Examples of extraordinary
expenses might include, but not be limited to, initial marketing expenses associated with initial
development and preparation of Product and Service mailers, print layouts for magazine and trade
journals, kiosks and other materials to be made available to the Distributors.

     4.02 The parties shall divide responsibilities generally as set forth below, and more
specifically as set forth in Exhibit B attached hereto.

          (a) VMS shall be responsible for investigating and pursuing alternate Product manufacturing
and Product sourcing vendors, creating and/or maintaining the operating infrastructure to support
the billing and collection process as well as administering the integrity of the processes, as
mutually agreed to by the parties. VMS will also use good faith efforts to establish and maintain
a network of distribution to effectuate the sales of the SkyGuard Products and SkyGuard Service
Agreement within the Automobile Industry.

          (b) SkyTel will undertake to have basic advertising and marketing support to launch the
SkyGuard Product, and will further undertake all commercially reasonable research and development
activities to support and maintain SkyGuard’s competitive edge within the Product space.

6

 

ARTICLE V BOOKS AND DISCLOSURES

     5.01 Disclosure. VMS and SkyTel agree that in an effort to establish the true and
actual revenue/profit opportunities, they will make full disclosure to each other on all internal
and external costs of all Products and Services comprising the SkyGuard Product offering, including
without limitation all sales, marketing and distribution costs and expenses with respect hereto.
SkyTel will pay VMS the VMS Fee for all ancillary Product offerings directly related to the basic
SkyGuard Product. Accordingly, commencing on the Effective Date and ending on the effective
termination of this Agreement, all profits, losses and other allocations hereunder shall be the
responsibility of and accrue to SkyTel, and SkyTel will pay VMS the VMS Fee.

     5.02 Books. The parties shall each keep adequate books and records at their primary
places of business, setting forth a true and accurate account of all business transactions arising
out of and in connection with their conduct hereunder. The parties agree that no less frequently
than once a monthly basis, within thirty (30) days of the end of each calendar month, it shall have
its financial advisors perform an analysis of the accounts to determine the profitability of the
activities undertaken. Notwithstanding the foregoing, unless otherwise agreed by three (3) or more
members of the Governing Board, the VMS Fee shall be paid to VMS calendar quarterly from the
Effective Date until June 30, 2008, and on the last day of each calendar month thereafter.

ARTICLE VI GOVERNING BOARD

     6.01 Business of the Venture.

     General management of the activities hereunder shall be conducted by a Governing Board (the
“Governing Board”) which shall consist of two (2) representatives from each entity. The initial
members of such Governing Board shall be:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	VMS:
	 	 	1	)	 	George Wafer
	 	SkyTel:
	 	 	1	)	 	Kevin Thimjon
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	2	)	 	Angelo Addesso
	 	 	 	 	2	)	 	Jim Myers	 	 

     The Governing Board shall meet as frequently as necessary and prudent to faithfully make
recommendations with respect to the operations of the parties hereunder, but no less frequently
than monthly on a recurring date mutually agreed to by the parties during the first year following
the Effective Date, and quarterly on a recurring date mutually agreed to by the parties thereafter.
Notwithstanding the authority of the Governing Board, the parties recognize that certain parties
need to be authorized to exercise authority over certain decisions and areas of the business
operations without first receiving advice from the Governing Board. To facilitate the need for
such management efficiencies, the Governing Board may recommend periodic delegations of authority
to one of the parties which are limited in scope and duration, consistent with the particular task
to be undertaken. Notwithstanding any such recommended delegation, whether or not adopted by the
parties, each party shall still owe a duty to the other party and the purpose of this Agreement to
act in good faith and to make prudent business decisions, and to return to the Governing Board to
discuss any issue reasonably believed to be beyond the scope of the recommended delegation.

7

 

ARTICLE VII AGREEMENTS WITH THIRD PARTIES AND WITH AFFILIATES

     7.01 Validity of Transactions. Affiliates of the parties to this Agreement may be
engaged to perform services in connection with the activities pursued under this Agreement. The
validity of any transaction, agreement or payment involving any such Affiliate of a party to this
Agreement otherwise permitted by the terms of this Agreement shall not be affected by reason of the
relationship between them and such Affiliates or the approval of said transactions, agreement or
payment.

     7.02 Other Business of the Parties to this Agreement. The parties to this Agreement
and their respective Affiliates may have interests in businesses other than the business to be
conducted under this Agreement and reference is made to Section 2.04 hereunder regarding any claim
to profits or losses derived from such other business interests.

ARTICLE VIII DEPOSITS, EXPENSES & DISTRIBUTIONS

     8.01 As a part of the establishment of the relationship between the parties contemplated
hereunder, SkyTel will establish a stand-alone general ledger (“SkyGuard Accounting Ledger”), which
will be maintained on an accrual basis in accordance with GAAP. All payments to VMS of the VMS Fee
will be paid through the SkyGuard Accounting Ledger. In connection with the activities to be
undertaken hereunder, SkyTel will be responsible for providing the Products and SkyGuard Service
Agreement which VMS will introduce to Distributors. Those Distributors will sell the Products and
provide the SkyGuard Service Agreement to Dealerships, which Products and SkyGuard Service
Agreement those Dealerships will ultimately offer and sell to Subscribers. The Subscriber will pay
the Dealership, which will pay the Distributor, which will forward the funds to SkyTel, which will
record such payments in the SkyGuard Accounting Ledger.

ARTICLE IX INDEMNIFICATION OF THE PARTIES

     9.01 The parties to this Agreement shall have no liability to the other for any loss suffered
which arises out of any action or inaction if, in good faith, it is determined that such course of
conduct was in the best interests of the relationship between the parties and such course of
conduct did not constitute negligence or misconduct. Each party shall defend, indemnify and hold
the other harmless from any and all actions, causes of action, claims, demands, costs (including
reasonable attorneys’ fees), liabilities, expenses and damages arising out of or in connection with
(i) any bodily injury or damage to property occasioned by the acts or omissions of the indemnifying
party or its employees or agents, and (ii) the violation by the indemnifying party of any federal,
state or local law, rule or regulation, all in connection with the activities to be pursued
hereunder.

     9.02 Third Party Claims.

     Promptly after the receipt by any party seeking indemnification of notice of the commencement
of any Action against such party by a third party, such party seeking indemnification (the
“Indemnified Party”) shall, if a claim with respect thereto is or may be made against any
indemnifying party pursuant to this Article IX, give such indemnifying party written notice
thereof. The failure to give such notice shall not relieve any Indemnifying Party

8

 

from any obligation hereunder except where, and then solely to the extent that, such failure
actually prejudices the rights of such Indemnifying Party. Such Indemnifying Party shall have the
absolute right after the receipt of notice to defend against, negotiate, settle or otherwise deal
with such Action, at such Indemnifying Party’s expense and with counsel of its choice, provided
that the Indemnifying Party so notifies the Indemnified Party that it will defend such Action
within fifteen (15) days after receipt of such notice and commences the defense of such Action;
provided, however, Indemnified Party may participate in any such proceeding with counsel of its
choice and at its sole cost and expense and the Indemnifying Party shall not settle any such Action
unless Indemnified Party is fully released without any admission of liability, and the Indemnified
Party is not otherwise obligated to undertake any action, or restricted in taking any action by the
terms of such settlement. If the Indemnifying Party does not elect to assume the defense of such
Action in accordance with the terms of this Section 9.02, the Indemnified Party shall have the
right to defend such Action with counsel of its choice and the Indemnifying Party will reimburse
the Indemnified Party for the costs thereof, including reasonable attorneys’ fees and expenses
incurred. The Indemnifying Party will not be liable for any judgment or settlement with respect to
such Action effected without its prior written consent. The parties hereto agree to cooperate
fully with each other in connection with the defense, negotiation or settlement of any such
indemnity claim.

     9.03 Direct Claims.

     Any claim by an Indemnified Party for indemnification other than indemnification against a
third party pursuant to Section 9.02 above (a “Direct Claim”), claims for enforcement of violations
for which the enforcement provisions of the Confidentiality Agreement shall apply) and claims for
violation of any provision of Exhibit A (which shall be enforced pursuant to the terms of
the Exclusivity Conditions), will be asserted by giving the Indemnifying Party written notice
thereof, and the Indemnifying Party will have a period of thirty (30) calendar days (the “Response
Period”) within which to respond in writing to such Direct Claim. If the Indemnifying Party does
not respond (or does so respond but does not agree to pay such Direct Claim in full) within the
Response Period, the Indemnifying Party will be deemed to have rejected such claim, and the
Indemnifying Party or the Indemnified Party may refer such dispute to arbitration by written notice
to the other party within ten (10) days after the expiration of the Response Period (the
“Arbitration Referral Period”). Subject to the last sentence hereof, if the matter is referred to
arbitration within the Arbitration Referral Period, arbitration of such matter shall be mandatory
in accordance with this Section 9.03 and each party shall select an arbitrator and the two so
selected shall agree on a third arbitrator from a panel of arbitrators selected by the American
Arbitration Association. In default of a party’s selection of an arbitrator as required, the
American Arbitration Association may select the arbitrator of the non-selecting party. The
arbitration shall be pursuant to the Rules of the American Arbitration Association and shall be
conducted in Los Angeles, California. Judgment upon any resulting arbitration award may be entered
in any court of competent jurisdiction. As part of such award, the arbitrators shall establish
their fees and expenses in connection therewith and allocate such fees and expenses between the
parties, who shall promptly pay their allocable shares. Any award shall be a conclusive
determination of the matter, and may be confirmed or enforced by either party in any court of
competent jurisdiction by the filing of an appropriate action, and each party shall be deemed to
have conclusively waived any and all defenses against enforcement. If neither party properly
refers the matter to arbitration prior to the expiration of the Arbitration Referral Period,

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or to the extent a party hereto seeks equitable remedies or an injunction, then the
Indemnified Party will be free to pursue such remedies as may be available to the Indemnified Party
at law or in equity.

ARTICLE X DISSOLUTION

     10.01 Events of Default. Upon the occurrence of an event of default, the party not in
default shall have the right to immediately terminate this Agreement upon the failure of the
defaulting party to cure such default within thirty (30) days following receipt of written notice
of such default from the party not in default. As used herein, the term “event of default” shall
mean (i) the failure by a party to observe or perform in any material respect any of the covenants
or agreements contained in this Agreement; or (ii) a party’s insolvency, assignment for the benefit
of creditors, appointment or sufferance of appointment of a trustee, receiver or similar officer,
or any voluntary or involuntary proceeding seeking reorganization, rehabilitation, liquidation or
similar relief under bankruptcy, insolvency or similar debtor relief statutes. In the event of any
default arising from an incident of fraud, related either as to Product marketing or
representation, activations of Subscribers, accounting or other services provided by either party
or its designees in connection with the activities contemplated by this Agreement, then the party
not in default shall have the right to immediately terminate this Agreement upon the failure of the
defaulting party to cure such default within fifteen (15) days following receipt of written notice
of such default from the party not in default. Any termination of this Agreement shall include but
not be limited to the termination of the license to use the SkyTel Marks as well as any right to
any future profits.

     10.02 Notice of Non-Renewal. Either party may deliver written notice to the other
party of its intent not to renew the Agreement at least twelve (12) months prior to the expiration
of the then-current term.

     10.03 [Purposely Deleted]

     10.04 For Cause. Either party may deliver written notice to the other party of its
intent to terminate this Agreement with “cause”. The term “cause” shall mean (i) the material
breach of this Agreement by the other party which is not cured (if curable) within thirty (30) days
of the other party’s receipt of notice from the party describing in detail the nature of such
material breach. If a party terminates this Agreement with cause, the terminating party shall have
no further financial obligation to the other party except for outstanding obligations to pay the
VMS Fees that accrued prior to the effective date of termination of this Agreement.

     10.05 Buy-Out. At any time following the end of the seventh (7th)
anniversary of the Effective Date, SkyTel shall be entitled to terminate this Agreement upon
written notice to VMS, in consideration of a lump sum payment calculated as follows:

     a) If the termination right is exercised between May 31, 2014 and May 31, 2017, the
termination fee that SkyTel shall pay to VMS shall be six (6) times the trailing twelve (12)
month VMS Fee.

10

 

     b) If the termination right is exercised at any time after May 31, 2017, the
termination fee that SkyTel shall pay to VMS shall be five (5) times the trailing twelve
(12) month VMS Fee.

     10.06 Ongoing Obligations. Upon any termination of this Agreement, SkyTel and VMS
shall be released from all obligations and liabilities to the other occurring or arising after the
effective date of such termination or the transactions contemplated hereby, except with respect to
those obligations which by their nature are designed to survive termination; provided, however,
that no such termination will relieve either party from any amount due and owing hereunder or any
liability arising from any breach of this Agreement. Termination of this Agreement shall not
affect or diminish either party’s obligation to make payment to the other party pursuant to the
terms herein, and such obligation shall survive termination of this Agreement. Upon any
termination of this Agreement all rights and licenses granted by SkyTel to VMS hereunder shall
immediately and automatically terminate, and VMS shall within ten (10) days return to SkyTel all
Confidential Information, and all copies thereof, in its possession, custody and control and shall
cease all use of the SkyTel Marks.

ARTICLE XI TERMS AND CONDITIONS

     11.01 The Terms and Conditions attached hereto as Exhibit D (the “Terms and
Conditions”) are hereby incorporated by reference hereto in its entirety and, as used herein and in
the Terms and Conditions, the term “Agreement” shall mean collectively this Agreement and the Terms
and Conditions. Terms defined in the Terms and Conditions are used herein as therein defined,
unless otherwise indicated.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.

	 	 	 	 	 	 	 
	SKYTEL,	 	VEHICLE MANUFACTURERS SERVICES, INC.
	A DIVISION OF BELL INDUSTRIES, INC.	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Kevin J. Thimjon
	 	By:
	 	/s/ George Wafer
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Kevin J. Thimjon, CFO
	 	 	 	George Wafer, CEO
	 

	 	 
	 	 	 	 
	 

	 	     [Print Name and Title]
	 	 	 	     [Print Name and Title]

11

 

EXHIBIT “A”

EXCLUSIVITY CONDITIONS

     VMS, for the Term of this Agreement, provided it is not in default or breach of this
Agreement, shall be granted exclusivity to market and sell, directly or indirectly, the Devices and
the SkyGuard Service Agreement and the Ancillary Products to Dealers and Distributors that supply
those Dealerships with aftermarket products, and related items.

     Subject to the provisions of this Agreement, VMS warrants that for the Term of this Agreement
and one-year thereafter, VMS shall not directly offer, develop, support, or indirectly offer,
develop, support products, services, product extensions, upgrades or similar as defined by this
Agreement, nor shall it, and/or its Affiliates offer, cause to be offered, develop, or otherwise
support, any products, services, or related, that may be deemed to compete or serve as an
alternative to the Products and/or Services defined or developed under the auspices of this
Agreement, and VMS and/or its Affiliates will not sell and/or market products or services similar
to the SkyGuard Products and/or Services in the Automotive Industry, nor will it directly or
indirectly cause or encourage others to offer a product or service that would reasonably be
considered to be competing with the SkyGuard Product or Services.

     SkyTel shall be entitled to obtain equitable relief to protect its interests herein, including
without limitation injunctive relief, as well as monetary damages., without the need to prove
actual damages or for the posting of a bond.

A-1

 

EXHIBIT “B”

RESPONSIBILITIES OF THE PARTIES

Responsibilities of VMS:

     Program Management: VMS shall be responsible for developing the Device and Service
distribution network, and Ancillary Products, providing assistance in developing the supply chain
for the Devices, which includes but is not limited to, providing input on the selection of
appropriate manufacturers, training for those manufacturers, and assisting in the ongoing device
and cost engineering of the Devices to ensure they remain market competitive.

     Distribution Support: VMS shall be the primary point of contact and facilitator for
introduction to, process development for, measurement of, and management of the alliance partners.
These activities shall consist of, but not be limited to, developing a distributor network for the
Devices and Services, identifying and securing OEM partners to ultimately secure installation of
the Device during the vehicle manufacturing process, developing appropriate insurance products and
obtaining all legal, regulatory, and other certifications, clearances, permits, and related
permissions to offer any products or services that could be defined as insurance products or
services; similarly, VMS shall also be responsible for all clearances, permits, regulatory
approvals, and related governmental permissions to offer security products. Finally, VMS shall be
responsible for directing, managing and assuring efficient cost of operations and quality of
Product for all manufacturers selected to support this Agreement.

     Distributor Training: VMS and its agents and subagents shall be responsible for all
training of Dealers and as appropriate, Distributors, to include but not be limited to sales
training, operational training, Truth-in-Lending and other legal disclosure training, technical
training, features training, and other such activities as necessary to ensure Dealers and
Distributors are prepared to meeting their responsibilities to support the product prior to,
during, and post installation and activation. SkyTel retains the right to review any such training
materials to ensure accurate representation of the features and functionality of the SkyGuard
Product. VMS accepts sole responsibility for training Dealers, agents, subagents, related parties
as appropriate, and Distributors on any and all relevant Federal, State, Local and other
jurisdictions laws, regulations and other requirements. SkyTel undertakes no obligations in this
area.

     Dealer Integrity: VMS acknowledges that it is fully responsible for the acceptance of
applications from Distributors found by VMS to be qualified to perform the obligations called for
by this Agreement. The parties agree and acknowledge that SkyTel shall at all times maintain the
absolute discretion to refuse to conduct business with a Distributor it finds unacceptable and to
refuse to conduct business with any Subscriber and/or to disconnect previously activated Service to
any Subscriber if it is determined that the SkyGuard Service Agreement was entered into under
allegations of fraud or misconduct on the part of the Distributor or the Subscriber, including but
not limited to any modification to the SkyGuard Service Agreement without the prior written consent
and approval of SkyTel. By way of example but not limitation, a Distributor shall be unacceptable
if it is found not to be creditworthy, has a poor D&B or similar business rating, or has any claims
or convictions involving allegations of fraud, lying or dishonesty.

B-1

 

Responsibilities of SkyTel:

     General. SkyTel shall, at all times, have the sole and exclusive control and
authority over the design, construction, development, management, operation and maintenance of the
SkyTel Network and the contractual relationships deemed by it to be necessary to enable adequate
GPRS Network coverage, as well as the Products. SkyTel shall provide Subscribers access to the
appropriate network(s) and the Products, all in accordance with the terms and conditions of the
SkyGuard Service Agreement to be executed by the Subscribers. SkyTel shall also have sole and
exclusive control and ownership of the Products and any modifications, upgrades, and or changes
made to the Products. SkyTel shall ensure that the Services provided to Subscribers shall be of at
least the grade and quality of like services provided by SkyTel to its other customers.

     Compliance with Laws. SkyTel warrants that the Products, as sold to VMS, will be in
full compliance with applicable laws, standards, codes and regulations, duly marked and labeled,
and suitable for distribution by VMS.

     Financial Management. SkyTel warrants that it shall be responsible for performing all
accounting related to the SkyGuard Accounting Ledger, including without limitation tracking
accounts receivable and accounts payable, preparing monthly and/or quarterly statements for the
Board of Advisors, as applicable, within thirty (30) days of the end of each calendar month or
calendar quarter, as applicable.

B-2

 

EXHIBIT “C”

SKYTEL MARKS

U.S. Registered Trademark

SkyTel®

SkyTel logo®

SkyGuardSM

SkyGuard logoSM

C-1

 

EXHIBIT “D”

TERMS AND CONDITIONS

     1. Representations and Warranties; Disclaimer of Warranties and Limitation of
Liabilities.

          1.1 Representations and Warranties. Each party represents and warrants to the other
that (a) it is duly organized, validly existing and in good standing under the laws of the state of
its organization; (b) it has all requisite power and authority to enter into this Agreement and to
perform its obligations under the terms of this Agreement; (c) this Agreement has been duly
authorized, executed and delivered and constitutes a valid and binding obligation of such party
enforceable in accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, moratorium and other laws of general application affecting the enforcement of
creditors’ rights; and (d) the execution, delivery and performance of and compliance with this
Agreement does not and will not conflict with, constitute a default under, nor result in any
violation of (i) its certificate of incorporation, bylaws or other such governing documents, (ii)
any term or provision of any mortgage, indenture, contract, agreement, instrument, judgment or
decree, or (iii) any order, statute, rule or regulation applicable to such party, which violation
would have a material adverse effect on its business or properties.

          1.2 Disclaimer of Warranties and Limitation of Liabilities.

               (a) VMS ASSUMES RESPONSIBILITY FOR THE SELECTION OF THE PRODUCT TO ACHIEVE ANY INTENDED
RESULTS, AND FOR THE PROPER INSTALLATION, USE, AND RESULTS OBTAINED BY THE PRODUCTS AND EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH HEREIN, SKYTEL MAKES NO WARRANTIES, EXPRESS OR IMPLIED, CONCERNING
THE PRODUCTS, ANY SOFTWARE EMBEDDED IN OR INTEGRAL TO THE PRODUCTS, OR THE WIRELESS MESSAGING
NETWORKS, AND HEREBY EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING WARRANTIES OF
MERCHANTABILITY, DURABILITY, PERFORMANCE AND QUALITY, AND ANY WARRANTY OF FITNESS FOR A PARTICULAR
USE OR PURPOSE.

               (b) NEITHER PARTY SHALL BE LIABLE TO THE OTHER OR TO ANY OTHER PERSON FOR ANY INDIRECT,
CONSEQUENTIAL, EXEMPLARY, SPECIAL, INCIDENTAL OR PUNITIVE DAMAGES, INCLUDING, WITHOUT LIMITATION,
LOSS OF USE OR LOST BUSINESS, REVENUE, PROFITS, GOODWILL OR ANY OTHER PECUNIARY LOSS, ARISING OUT
OF OR RELATED TO THIS AGREEMENT, THE PRODUCTS, ANY SOFTWARE AND/OR THE INTENDED USE THEREOF, OR
THAT RESULT FROM OR ARISE OUT OF ANY MISTAKES, ERRORS, OMISSIONS, INTERRUPTIONS, DEFECTS, DELAYS IN
OPERATION, OR TRANSMISSION, OR ANY FAILURE OF PERFORMANCE, UNDER ANY THEORY OF TORT, CONTRACT,
WARRANTY, STRICT LIABILITY OR NEGLIGENCE, EVEN IF SUCH PARTY HAS BEEN ADVISED, KNEW OR SHOULD HAVE
KNOWN OF THE POSSIBILITY OF SUCH DAMAGES.

D-1

 

               (c) WITHOUT LIMITING SUBSECTION (b) ABOVE, THE TOTAL LIABILITY OF EITHER PARTY TO THE OTHER IN
CONNECTION WITH THIS AGREEMENT SHALL BE LIMITED TO THE HIGHER OF ONE MILLION DOLLARS ($1,000,000)
AND THE TRAILING TWELVE (12) MONTH REVENUES OF SKYGUARD. THE FOREGOING LIMITATION SHALL APPLY TO
ALL CAUSES OF ACTION AND CLAIMS, INCLUDING, WITHOUT LIMITATION, BREACH OF CONTRACT, BREACH OF
WARRANTY, NEGLIGENCE, STRICT LIABILITY, MISREPRESENTATION AND OTHER TORTS. THE PARTIES ACKNOWLEDGE
THE REASONABLENESS OF THE FOREGOING DISCLAIMERS AND LIMITATIONS OF LIABILITY.

     2. Insurance. Each party shall maintain in full force and effect during the term of
this Agreement general commercial liability insurance coverage in an amount of at least One Million
dollars ($1,000,000.00) and in a form that is standard for the type of business operations
contemplated by this Agreement. Immediately following the execution of this Agreement by the
parties and upon request thereafter, each party will provide the other with one (1) certificate of
insurance which names such other party as an additional insured.

     3. Confidentiality.

               3.1 Obligation. Except as herein provided, each party who receives (the “Receiving
Party”) Confidential Information from the other party (the “Disclosing Party”) agrees that all such
Confidential Information is and shall remain the Confidential Information and sole property of the
Disclosing Party. Except as may be required by law or by court order or as may be reasonably
required by any governmental agency or authority, the Receiving Party agrees: (a) to keep
confidential all such Confidential Information, and to use the same only for the purposes of this
Agreement, (b) that it will not disclose or permit dissemination of, and will take all necessary
action to prevent the duplication, dissemination or disclosure of, Confidential Information to any
third parties, including, without limitation, customers, consultants, financial lending
institutions or business advisors, without the prior written consent of the Disclosing Party, and
(c) that any dissemination of Confidential Information to its officers, directors, employees or
agents shall be subject to the provisions of this Agreement, made only to carry out the purposes of
this Agreement and limited to the maximum extent possible consistent with carrying out such
purposes. Upon termination of this Agreement or earlier request of the Disclosing Party, all such
Confidential Information and any copies thereof in any medium in the possession of the Receiving
Party shall be returned to the Disclosing Party or destroyed in a manner satisfactory to the
Disclosing Party.

               3.2 Definition. “Confidential Information” shall include any business, marketing,
sales, financial or technical information, including, without limitation, any information relating
to present or future business affairs, operations, methods, techniques, operations or financial
condition, and all other information of any kind which may reasonably be considered confidential or
proprietary, disclosed by one party (the “Disclosing Party”) to the other (the “Receiving Party”),
whether such information is written or oral, because of legends or other markings which is
designated or identified as “confidential”, “proprietary” or in some other manner to indicate its
confidential nature. In addition, such Confidential Information may be disclosed in written or
other tangible form (including on magnetic media) or by oral, visual or other means. Confidential
Information shall not include any information which: (a) is known to

D-2

 

the Receiving Party prior to disclosure by the Disclosing Party; (b) is or becomes known to
any persons not under an obligation of confidentiality to the Disclosing Party, other than by the
Receiving Party’s breach of this Agreement; (c) is developed independently by the Receiving Party;
or (d) is disclosed to the Receiving Party by a third party whose disclosure, to the knowledge of
the Receiving Party, would not violate any confidentiality obligation of such third party to the
Disclosing Party.

     4. SkyTel and Subscriber Privacy. VMS will respect the privacy of SkyTel and the
Subscribers. VMS will employ commercially accepted security procedures and other reasonable means
to ensure privacy of SkyTel’s and Subscribers’ data, system transactions and business practices,
and will not use this information nor make the information available to others without written
consent from SkyTel and the affected Subscriber as applicable. Such information shall be deemed to
be SkyTel’s “Confidential Information” (as such term is defined above). Without limiting the
generality of the foregoing, VMS shall not use or disclose personal information of Subscribers
collected or obtained through the Subscriber account activation process, including without
limitation Subscriber account information or any information protected by privacy laws, without the
prior written approval of the affected Subscriber, nor in a manner that violates any privacy or
other legal rights of such Subscriber. VMS shall comply with the privacy policy adopted by SkyTel
and posted on SkyTel’s web site at www.skytel.com, as such privacy policy may be modified from time
to time. VMS shall also ensure that its Affiliates, and its and their Subagents, agents,
distributors and resellers, adhere to the restrictions on use and disclosure of information
contained herein.

     5. Notice. Any notice or other communication herein required or permitted to be given
shall be in writing and may be personally served or sent by a recognized overnight courier or
United States mail, and shall be deemed to have been received when (a) delivered in person, (b) one
(1) business day after delivery to the office of such overnight courier service, or (c) three (3)
business days after depositing the notice in the United States mail with postage prepaid and
properly addressed to the other party, at the following respective addresses:

     To SkyTel: To the attention of the Director of Strategic Relations, with a copy to the Legal
Department at:

	 	 	 	 	 
	If by United States mail:

	 	SkyTel
	 	 
	 

	 	Post Office Box 2469	 	 
	 

	 	Jackson, Mississippi 39225-2469	 	 
	 
	 	 	 	 
	 

	 	And	 	 
	 
	 	 	 	 
	 

	 	Bell Industries, Inc.	 	 
	 

	 	8888 Keystone Crossing, Suite 1700	 	 
	 

	 	Indianapolis, IN 46240	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	If by overnight courier:

	 	SkyTel	 	 
	 

	 	500 Clinton Center Drive	 	 
	 

	 	3rd Floor, Building # 2	 	 
	 

	 	Clinton, Mississippi 39056	 	 

D-3

 

	 	 	 	 	 	 	 
	To VMS:	 	The address on file with SkyTel for VMS as follows:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Vehicle Manufacturer’s Inc.	 	 
	 

	 	 	 	801 Motor Parkway, Suite 200	 	 
	 

	 	 	 	Hauppauge, New York 11788	 	 
	 

	 	 	 	Telephone: (631) 851-1700	 	 
	 

	 	 	 	Attention: George Wafer, Chairman and CEO	 	 

or to such other address or addresses as either party may from time to time designate as to itself
by like notice.

     6. Arbitration. Except as otherwise provided in Section 9.03 of this Agreement, any
dispute arising out of or related to this Agreement, inclusive of decisions by the Governing Board
or in the event of any impasse which cannot be resolved by negotiation, will be settled by binding
arbitration in accordance with the J.A.M.S./ENDISPUTE Arbitration Rules and Procedures, as amended
by this Agreement. The parties will share the costs of the arbitration proceedings, including the
fees and expenses of the arbitrator, equally unless the arbitration award provides otherwise. Each
party will bear the cost of preparing and presenting its case. All arbitration proceedings will be
held at the location in the United States designated by the party seeking the arbitration. The
parties agree that this provision and the Arbitrator’s authority to grant relief will be subject to
the United States Arbitration Act, 9 U.S.C. 1 16 et seq. (“USAA”), the provisions of this
Agreement, and the ABA AAA Code of Ethics for Arbitrators in Commercial Disputes. The parties
agree that the arbitrator has no power or authority to make awards or issue orders of any kind
except as expressly permitted by this Agreement, and in no event will the arbitrator have the
authority to make any award that provides for punitive or exemplary damages. The Arbitrator’s
decision will follow the plain meaning of the relevant documents, and is final and binding. The
award may be confirmed and enforced in any court of competent jurisdiction. All post award
proceedings are governed by the USAA. This provision will not be construed to prohibit either
party from seeking preliminary or permanent injunctive relief in any court of competent
jurisdiction to protect their respective intellectual property rights.

     7. Records and Audits. Both SkyTel and VMS shall maintain, in accordance with U.S.
generally accepted accounting principles consistently applied, such books and records as shall be
necessary in order to disclose readily the basis for any charges, payments and credits, ordinary or
extraordinary, billed or due, to or from the other party under this Agreement. Each party, at its
own expense, shall retain all such records for a period of not less than five (5) years after
receipt of final payment for the applicable Products under this Agreement. Upon reasonable notice
of not less than fifteen (15) business days, either party may inspect and audit, during regular
business hours at the office of the party being inspected, all of such party’s property, books, and
records that directly or indirectly relate to such party’s performance and obligations under this
Agreement. At the auditing party’s option, the audit may be performed by such party’s internal
auditors and/or independent auditors selected by the party. Each party agrees it shall provide
such access to personnel, property, and records as is reasonably necessary

D-4

 

to effectuate any such audit hereunder. Auditors may copy any documents that may be properly
audited hereunder. All of the records subject to audit hereunder, and any copies made thereof,
shall be deemed the Confidential Information of the party being audited. The party conducting such
audit shall be responsible for the cost of conducting its audit, but shall not be responsible for
any costs incurred by the party being audited in the fulfillment of its obligations hereunder.
Notwithstanding the preceding, the auditing party shall reimburse the audited party for all of the
cost of conducting the audit if the audit reveals that the audited party has been underpaid by the
auditing party or has overpaid the auditing party by more than $25,000. VMS agrees that SkyTel
shall be granted identical audit rights in any agency contracts entered into by VMS with Subagents
pursuant to this Agreement, and shall cause the inclusion of this Section in all such agency
contracts.

     8. Miscellaneous Provisions.

          8.1 Laws, Rules, Regulations, Applicable Law and Attorneys Fees. This Agreement is
subject to all laws, rules, regulations, and ordinances relative to, among other things, the
provision of wireless messaging services, including, without limitation, the Communications Act of
1934 and the Telecommunications Act of 1996, as amended, and all rules and regulations promulgated
thereunder. This Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, without regard to the principles of conflict of laws. If any action shall be
brought on account of any breach of or to enforce or interpret any of the terms, covenants or
conditions of this Agreement, the prevailing party shall be entitled to recover from the other, as
part of the prevailing party’s costs, a reasonable attorneys’ fee.

          8.2 Independent Parties. Notwithstanding anything to the contrary herein, it is
acknowledged, confirmed, and agreed that VMS shall be, and shall be deemed to be, an independent
contractor for all intents and purposes, including, without limitation, federal taxation. As an
independent contractor, VMS shall be responsible for, among other things, any self-employment tax
and shall not be eligible for various employee benefits of SkyTel, including, but not limited to,
workers’ and unemployment compensation, nor shall VMS be eligible to participate in any retirement
plan maintained or to be maintained by SkyTel. VMS shall pay all expenses in connection with
performing its obligations hereunder and shall not incur any indebtedness on behalf of SkyTel in
connection with such expenses. Neither party shall have or hold itself out as having any right,
authority or agency to act on behalf of the other party in any capacity or in any manner, except as
may be specifically authorized in this Agreement.

          8.3 Complete Agreement, Severability, and Force Majeure. This Agreement constitutes
the entire agreement between the parties with respect to the subject matter hereof, and supersedes
and replaces all prior or contemporaneous understandings or agreements, written or oral, between
the parties regarding such subject matter. No amendment to or modification of this Agreement will
be binding unless in writing and signed by a duly authorized representative of both parties. If
any provision of this Agreement shall be held to be illegal, invalid or unenforceable, such
provision will be enforced to the maximum extent permissible so as to effect the intent of the
parties, and the validity, legality and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby. Neither party will be liable for any nonperformance under
this Agreement due to causes beyond its reasonable control that could not

D-5

 

have been reasonably anticipated by the non-performing party as of the Effective Date and that
cannot be reasonably avoided or overcome; provided that the non-performing party gives the other
party prompt written notice of such cause, and in any event within fifteen (15) calendar days of
discovery thereof.

          8.4 Binding Agreement and Remedies. This Agreement shall be binding upon and inure to
the benefit of the parties, their respective legal representatives, successors and assigns. The
rights and remedies of the parties hereunder shall not be mutually exclusive, i.e., the exercise of
one (1) or more of the provisions hereof shall not preclude the exercise of any other provision
hereof. The parties acknowledge, confirm and agree that damages may be inadequate for a breach or
a threatened breach of this Agreement and, in the event of a breach or threatened breach of any
provision hereof, the respective rights and obligations hereunder shall be enforceable by specific
performance, injunction or other equitable remedy. Nothing contained in this Agreement shall limit
or affect any rights at law or by statute or otherwise for a breach or threatened breach of any
provision hereof, it being the intent of this provision to clarify that the respective rights and
obligations of the parties shall be enforceable in equity as well as at law or otherwise.

          8.5 Counterparts, Headings, Construction and No Waiver. This Agreement may be
executed in one or more counterparts, each of which will be deemed an original, but which
collectively will constitute one and the same instrument. The headings and captions used in this
Agreement are used for convenience only and are not to be considered in construing or interpreting
this Agreement. This Agreement has been negotiated by the parties and their respective counsel.
This Agreement will be interpreted fairly in accordance with its terms and without any strict
construction in favor of or against either party based on draftsmanship of the Agreement or
otherwise. No delay or failure by either party in exercising any right under this Agreement, and
no partial or single exercise of that right, shall constitute a waiver of that or any other right.
Failure by either party to enforce any right under this Agreement will not be deemed a waiver of
future enforcement of that or any other right.

          8.6 Assignment and No Rights in Third Parties. Neither party may assign or delegate
its rights or obligations under this Agreement, either in whole or in part, without the prior
written consent of the other; provided, however, notwithstanding the foregoing, SkyTel may assign
this Agreement, without the prior consent of VMS, to any Affiliate of SkyTel or to any Person
acquiring all or substantially all of the assets of SkyGuard, or a controlling interest in the
voting stock of Bell Industries, Inc., or any controlling Affiliate of SkyTel. Any attempted
assignment in violation of this provision shall be void. This Agreement is made for the benefit of
SkyTel and VMS and their respective Affiliates, if any, and not for the benefit of any third
parties.

          8.7 Publicity. Neither party will make or cause to be made, whether orally or in
writing or otherwise, any public announcement or statement to the news media or the investment or
business communities with respect to the transactions contemplated by this Agreement or any of the
provisions hereof without the prior review and written approval of the other party as to the form,
content and timing of such announcement or disclosure.

D-6

 

EXHIBIT “E”

DEFINITION OF “VMS FEE”

     For the purpose of this Agreement, “VMS Fee” shall mean fifty percent (50%) of the SkyGuard
Net Profits. For the purposes of this Agreement, “SkyGuard Net Profits” are defined as SkyGuard
EBITDA calculated on a GAAP basis as determined on the SkyGuard Accounting Ledger.

     Payment Terms for the VMS Fee. The VMS Fee plus an advance of fifty percent (50%) of the
unrecognized revenue from the SkyGuard Service Agreement fees, which SkyGuard will amortize over
the life of the service period, less fifty percent (50%) of the capital expenditures.

E-1

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