EXHIBIT
10.1


 


VENDOR AGREEMENT


 


This
Vendor Agreement (“Agreement”) is entered into as of October 14,
2009 (“Contract Date”) and effective as of the Effective Date (as
defined in the Recitals below) by and among GE Commercial Distribution Finance
Corporation (“CDF”), Arctic Cat Sales Inc. (“ACSI”) and Arctic Cat Inc.
(“AC”) (ACSI and AC shall be referred to herein, unless otherwise noted,
individually and collectively as “Vendor”).


 


RECITALS


 


(a)                                  Vendor is a
manufacturer or distributor that sells inventory to various dealers and/or
distributors (each, a “Dealer”) for subsequent resale; and


 


(b)                                 Vendor
currently has in place a Dealer inventory financing program with Textron
Financial Corporation and/or Textron Inc. (collectively, “Textron”) and on or
about the Contract Date will give notice or otherwise agree with Textron to
terminate such agreement on its renewal date (January 20, 2010) or earlier
, and this Agreement, together with all obligations, terms and conditions
herein, shall become effective (the “Effective Date”) upon the later of (i) the
effective date of the termination of such agreement with Textron, and (ii) satisfaction
of the conditions in Section 17 hereof; and


 


(c)                                  Any and all
inventory sold and/or distributed by Vendor prior to, on or after the Effective
Date of this Agreement, including but not limited to inventory which is the
subject of the Purchased Accounts (as defined below) shall be defined herein as
“Inventory”; and


 


(d)                                 CDF provides or
may provide inventory financing services to Dealers of Vendor; and


 


(e)                                  Accounts
receivable either purchased by CDF from Textron or paid off by CDF to Textron,
and representing amounts which Dealers owe for financing which Textron extended
to such Dealers with respect to Inventory prior to the Effective Date, shall be
defined herein as “Purchased Accounts”; and


 


(f)                                    In order to
promote Vendor’s sale of Inventory to its Dealers, Vendor has requested that
CDF provide financing to its Dealers and has agreed to enter into this
Agreement to induce CDF to provide such financing.


 


NOW, THEREFORE, to induce CDF to extend
financing to Vendor’s Dealers, Vendor and CDF agree as follows:


 


1.                                       Representations
and Warranties.


 


A.                                   Whenever a
Dealer requests the shipment of Inventory from ACSI and that CDF finance such
Inventory, ACSI may deliver to CDF one or more invoices describing the
Inventory.  By delivery of an invoice
relating to Inventory (for the avoidance of doubt, including but not limited to
any Purchased Accounts and the inventory related to such accounts), ACSI
represents, warrants and covenants to CDF as follows:


 


(a)                                  The invoice
issued by ACSI represents a valid obligation of Dealer, is legally enforceable
according to its terms, relates to a bona fide sale of Inventory by ACSI to
Dealer, as requested by Dealer, and is not subject to any claim, setoff or
defense to payment by Dealer; and that Dealer requested that its acquisition of
the Inventory be financed by CDF.


 


(b)                                 ACSI will
transfer to Dealer all of its right, title and interest in and to the Inventory
so described, contingent only upon CDF’s approval to finance the transaction.


 


(c)                                  ACSI’s title to
the Inventory will be free and clear of all liens and encumbrances when
transferred to Dealer.


 


(d)                                 The Inventory
is in new (meaning (i) not previously sold at retail or (ii) not
registered or titled in any state) and unused condition (excepting for normal
wear and tear incidental to demonstration as approved by CDF); it is of the
kind, quality and condition represented or warranted to Dealer; it meets or exceeds
all applicable federal, state and local safety, construction and other
standards; and, if it is a type of Inventory customarily crated or boxed, such
crate or box is factory sealed; and the Inventory is in salable condition
suitable for ordinary retail sale.


 


If
ACSI breaches any of the above representations, warranties or covenants, ACSI
will immediately (i) pay to CDF an amount equal to the total unpaid
principal balance  and any finance
charges owed to CDF on all Inventory related to the breach, and (ii) reimburse
CDF for all costs and expenses (including, but not limited to, reasonable
attorneys’ fees) incurred by CDF as a result of the breach.


 


B.                                     Vendor
also represents, warrants and covenants to CDF as follows:


 


(a)                                  Due
Organization; Authority.  Vendor is and will continue to be duly
organized, validly existing and in good standing under the laws of the state of
its formation, is and will continue to be duly qualified and licensed to do
business in every jurisdiction where such qualification or licensing is
necessary to carry out its obligations under this Agreement and has and will
continue to have the power, authority and legal right to enter into and perform
its obligations under this Agreement.


 


(b)                                 Due
Authorization; Enforceability.  This Agreement has been duly authorized,
executed and delivered by Vendor and, assuming due authorization, execution and
delivery by Vendor, constitutes its valid and legally 


 

















 


binding
obligation, enforceable against it in accordance with its terms, except as may
be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium and other similar laws affecting the rights of creditors generally
and by general principles of equity.


 


(c)                                  No Violation.  The execution and delivery of this Agreement
does not, and the performance by Vendor of its obligations hereunder will not (i) constitute
or create a breach of any agreement to which Vendor is a party, (ii) violate
or conflict with any provision of its charter or by-laws or other
organizational documents, or any law, governmental rule or regulation,
judgment or order applicable to it, or any provision of any indenture,
mortgage, contract or other instrument to which it is a party or by which it or
its property is bound, (iii) constitute a default under any credit
facility or agreement to which it is a party or by which it or its property is
bound, or (iv) require the consent or approval of, the giving of notice
to, the registration with or the taking of any action in respect of or by, any
federal or state governmental authority or agency (including any local
governmental authority or agency) or other third party, except as have been
duly obtained, given or accomplished and are in full force and effect.


 


2.                                       Inventory
Financing.  CDF will
only be bound to finance Inventory with respect to which CDF has agreed to
finance in the exercise of its sole discretion 
and then only if:  (a) ACSI
delivers to CDF an invoice, acceptable in form and content to CDF, relating to
CDF’s agreement/approval within thirty (30) days after CDF issues its
agreement/approval; (b) ACSI ships the Inventory to the respective Dealer
not more than ten (10) days before or not more than three (3) days
after the date of the invoice/EDI transmission relating to such Inventory; and (c) CDF
has not revoked its agreement/acceptance before the shipment of the Inventory
to Dealer (prior to funding an approval CDF shall have the right to cancel an
approval upon oral or written notice to ACSI at any time prior to shipment).  If ACSI fails to satisfy any of the foregoing
conditions, CDF shall not be obligated to finance the Inventory, even though
CDF may have previously agreed to finance such Inventory. Without limiting the
generality of the foregoing, if CDF has not advanced funds with respect to any
approval by the date such approval expires, or by such date as CDF and ACSI may
have otherwise agreed to, then any invoice relating to such approval shall be
deemed not received by CDF and CDF shall have no obligation to finance such
invoice. With respect to invoices which satisfy the above conditions CDF shall
pay ACSI the amount of the invoice, subject to the terms of the financing
program then in effect between ACSI and CDF. CDF may deduct, setoff, withhold
and or apply any sums or payments due from Vendor to CDF under this Agreement,
any guaranty or due from Vendor to CDF under any other agreement, against any
sums due from CDF to Vendor from any advance to be made by CDF against any
invoice.


 


3.                                       Purchase
of Inventory.  Whenever
CDF deems it necessary in its sole discretion to repossess or if CDF otherwise
comes into possession, actual or constructive, of any Inventory in which it has
a security interest or other lien, including but not limited to any Inventory
acquired by a Dealer in replacement of Inventory previously held by Dealer,
ACSI will purchase such Inventory from CDF at the time of CDF’s repossession or
other acquisition of possession thereof in accordance with the following terms
and conditions:


 


(a)                                  ACSI will
purchase such Inventory, regardless of its condition, at the point where CDF
repossesses it or where it otherwise comes into CDF’s possession;


 


(b)                                 The purchase
price ACSI will pay to CDF for such Inventory will be due and payable
immediately in full, and will be an amount equal to the total unpaid principal
balance owed to CDF with respect to such Inventory;


 


(c)                                  ACSI shall not
assert or obtain any interest in or to any Inventory acquired by ACSI until the
purchase price therefor is paid in full;


 


(d)                                 If an invoice
delivered to CDF by ACSI does not identify the Inventory covered thereby by
serial number, but only by model number, and ACSI cannot prove to CDF’s
reasonable satisfaction that an item of Inventory is covered by a particular
invoice, then for purposes of determining the age or price of an item of
Inventory under this Agreement, the item of Inventory shall be deemed to be
covered by the most recent invoice which has an item with the same model number
as the item of Inventory tendered for purchase by ACSI;


 


(e)                                  ACSI hereby agrees
that in the event that CDF refinances Inventory for a Dealer by means of a
buyout of a Dealer’s debt from another financing source or otherwise, such
Inventory shall be subject to purchase by ACSI pursuant to the terms of this
Agreement notwithstanding the fact that CDF did not finance the initial
purchase of such Inventory by Dealer from ACSI;


 


(f)                                    The aggregate repurchase obligations for ACSI for Inventory pursuant to Sections
3 and 4 of this Agreement shall not exceed the Repurchase Cap per any consecutive
twelve-month period with the first period beginning on the Effective Date. “Repurchase
Cap” as used herein shall mean the greater of (i) Sixty Million
Dollars ($60,000,000.00) or (ii) twenty percent (20%) of the ANR (as
defined below) of all Dealers for the prior consecutive twelve-month period
with the first period beginning on the Effective Date. Notwithstanding anything
contained herein to the contrary, the repurchase terms agreed to by
ACSI contained in this Agreement are in
addition to (and do not limit) the loss sharing and recourse and other
obligations of Vendor to CDF hereunder, under any Guaranty referenced in Section 17
below or under any other agreement with CDF. Therefore, any amount
payable by Vendor under the loss
sharing and recourse terms set forth in Section 5 below, any
Guaranty referenced in Section 17 below or under any other
agreement with CDF shall not be included or considered as payment(s) by
Vendor for purposes of the Repurchase Cap; and


 


(g)                                 “ANR” as
used in this Agreement shall be defined as follows: with respect to any
calendar year shall be determined as of December 31 of each calendar year
by aggregating the Monthly ADB (as defined below) for each calendar month in
such calendar year and dividing such aggregate amount by 12 (the number of
calendar months in a year).  ANR for any
calendar year in which this financing program for ACSI’s Dealers as described
herein shall be terminated or which is less than a full 365 day year (each such
calendar year is referred to herein as a “short year”) shall


 

















 


be
calculated by aggregating the Monthly ADB (as defined below) for each calendar
month in such short year and dividing such aggregate amount by the number of
calendar months in such short year).  The
Repurchase Cap, Gross Margin Income (as described in the Program Terms Letter
referenced in Section 17) and the “rebate” (as described in Section 5.1
of this Agreement), if any, for any short year shall be prorated
accordingly.  “Monthly ADB” with
respect to any calendar month shall be determined by aggregating the total
outstanding principal amount owing to CDF from all Dealers with respect to the
financing program for ACSI’s Dealers as described herein (as determined on a
managed basis without regard for securitization) for each day during such
calendar month and dividing such aggregate amount by the number of days in such
calendar month.


 


4.                                       Additional
Terms of Purchase.  In addition
to ACSI’s obligations set forth above, if CDF at any time repossesses or
otherwise comes into possession of any Inventory from a Dealer who received the
Inventory from a third party and not directly from ACSI, ACSI shall purchase
such Inventory from CDF on demand, in accordance with the terms set forth above
in Section 3; provided, however,
that with respect to any Inventory (excluding Purchased Accounts and the
inventory related to such accounts):  (a) CDF
will first request such third party to purchase such Inventory from CDF; and (b) if
such third party fails to immediately purchase such Inventory from CDF, ACSI
shall immediately purchase such Inventory and pay CDF a purchase price therefor
in an amount equal to the total unpaid principal balance  owed to CDF 
with respect to such Inventory and all costs and expenses (including,
without limitation, reasonable attorneys’ fees) paid or incurred by CDF in
connection with its repossession of such Inventory.


 


5.                                       Loss
Sharing and Recourse.


 


5.1                                 ACSI
unconditionally and absolutely guaranties repayment to CDF of (i) fifty
percent (50%) of all losses incurred by CDF ( disregarding  securitization) with respect to all current
and future Dealer Liabilities (as defined below) which do not exceed one
percent (1%) of Dealers’ combined average outstandings with CDF for each twelve
(12) month period with the first twelve month period beginning on the Effective
Date, and (ii) one hundred percent (100%) of all losses incurred by CDF
(disregarding  securitization) with
respect to all current and future Dealer Liabilities which do exceed one
percent (1%) of Dealers’ combined average outstandings with CDF for such twelve
(12) month period; provided that ACSI’s liability for any such losses pursuant
to this Section 5.1(ii)  exceeding such one percent (1%) shall
not be greater than Ten Million Dollars ($10,000,000.00) during any such twelve
(12) month period. For purposes of clarity, ACSI’s liability pursuant to this Section 5.1(i) shall
not be counted towards the cap described in this Section 5.1(ii).  “Dealer Liabilities” as used in this Section 5
shall mean (a) all indebtedness of any nature of any Dealer  (excluding Tracker Marine Retail, LLC) owed
to CDF (as determined on a managed basis without regard for securitization)
whether existing or arising hereafter with respect to Inventory, whether for
principal, interest, fees, expenses, reimbursement obligations or otherwise (as
determined on a managed basis without regard for securitization) and (b) all
costs and expenses (including, without limitation, reasonable attorneys’ fees)
incurred by CDF in attempting to collect such indebtedness from any Dealer.
ACSI will immediately pay to CDF the amount of the guarantied Dealer
Liabilities upon receipt of notice from CDF that such Dealer Liabilities exist
with respect to any Dealer.  ACSI’s
guaranty under this Section 5 is a guaranty of payment and not of
collection.   If for any calendar year
(beginning with calendar year 2010), CDF’s respective share of the aggregate
annual loss with respect to the financing program for ACSI’s Dealers (excluding
Tracker Marine Retail, LLC) as described herein (as determined on a managed
basis without regard for securitization) is less than 0.50% of ANR  (as defined above), after giving effect to
the loss sharing to be contributed by ACSI for such calendar year, then the
difference between CDF’s respective share of such annual loss amount and 0.50%
of ANR for such calendar year will be shared evenly with the ACSI within 60
days of such calendar year’s year-end. 
The loss and the ANR for any year during which this Vendor Agreement
shall be in effect for only a part of such calendar year shall be
prorated.  All determinations of
applicable losses shall be based upon CDF’s internally calculated profit and
loss report, with respect to the financing program for ACSI’s Dealers as
described herein, as determined by CDF in its sole discretion in accordance
with its then current internal cost allocation and accounting policies and
procedures, which policies and procedures may change from time to time.
Notwithstanding anything contained herein to the contrary, Tracker Marine
Retail, LLC shall not be included in any of the calculations set forth in this Section 5.1.


 


5.2                                 ACSI’s
obligations hereunder shall be unconditional, irrespective of, at any time, (i) the invalidity or unenforceability of the Dealer
Liabilities or any agreement or instrument relating to any of the Dealer
Liabilities (collectively, the “Transaction Documents”), (ii) any
law, regulation or order in effect in any jurisdiction affecting any of the
terms or the rights of CDF with respect to the Dealer Liabilities or the
Transaction Documents, (iii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Dealer Liabilities, or
any other amendment or waiver of or any consent to departure from any
Transaction Document, (iv) the absence of any attempt to collect the
Dealer Liabilities from Dealer or from any other person primarily or
secondarily liable with respect to the Dealer Liabilities or of any attempt to
realize upon any security interest securing the Dealer Liabilities, (v) any
exchange, release, non-perfection or other impairment of any security interest
securing the Dealer Liabilities or other security, (vi) any release of or
settlement with any Dealer or other obligor with respect to the Dealer
Liabilities or any release or amendment or waiver of or consent to departure
from any other guaranty of the Dealer Liabilities, (vii) CDF’s acceptance
at any time of any additional collateral, guarantees or other credit support
relating to the Dealer Liabilities, (viii) any dispute between CDF and any
Dealer, or any termination of credit to any Dealer or modification of the terms
thereof, (ix) the disallowance in bankruptcy or other proceedings of all
or any part of CDF’s claim against any Dealer or any other person liable for
any Dealer Liabilities, and (x) any other circumstance which might
otherwise constitute a defense available to, or a discharge of, any Dealer, a
guarantor or a surety.


 


5.3                                 This
guaranty will not be released, discharged or affected by the impairment, sale
or other disposition of any collateral that is security for the Dealer
Liabilities which any Dealer owes to CDF. 
ACSI will pay CDF the amount of 


 

















 


such Dealer Liabilities
even if CDF has not (i) notified the applicable Dealer that it is in default,
or (ii) exercised any of CDF’s rights or remedies against such Dealer, any
other person or any current or future collateral.  If any Dealer hereafter undergoes any change
in its ownership, identity or organizational structure, this guaranty will
extend to all current and future obligations which such new or changed legal
entity owes to CDF.  ACSI irrevocably
waives any right of notice of the number and amount of advances made by CDF to
any Dealer in reliance on this guaranty and any claim or action against any
Dealer; all rights of offset against CDF or Dealer; and all defenses to the
enforceability of this guaranty (including, without limitation, fraudulent
inducement).  ACSI further waives all
defenses based on suretyship or impairment of collateral and defenses which any
Dealer may assert on the underlying Dealer Liabilities, including, but not
limited to, breach of warranty, fraud, payment of disputed amounts, statute of
frauds, bankruptcy, statute of limitations, lender liability and deceptive trade
practices.


 


5.4                                 No delay on
the part of CDF in the exercise of any right or remedy shall operate as a
waiver thereof, and no single or partial exercise by CDF of any right or remedy
shall preclude any further exercise thereof. 
No modification, waiver or amendment of any of the provisions of this Section 5
shall be binding upon CDF except as expressly set forth in a writing duly
signed on CDF’s behalf by any authorized officer or agent of CDF and delivered
by CDF to ACSI.  CDF’s failure at any
time to require strict performance by ACSI of any of the provisions contained
in this Section 5 shall not waive, affect or diminish any right of
CDF at any time to demand strict performance therewith.


 


5.5                                 To the extent that ACSI or any Dealer makes any payment to
CDF or CDF enforces any security interests or exercises any rights of setoff
with respect to the Dealer Liabilities, and such payment or the proceeds of
such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such enforcement or setoff had not occurred.  Notwithstanding anything in this Section 5
to the contrary, the right of recovery against ACSI under this Section 5
is limited to the extent it is judicially determined with respect to ACSI that
entering into this guaranty would violate Section 548 of the United States
Bankruptcy Code or any comparable federal, state or other laws relating to fraudulent
transfers or the like, in which case ACSI shall be liable under this Section 5
only for amounts aggregating up to the largest amount that would not render
ACSI’s obligations under this Section 5 subject to avoidance under Section 548
of the United States Bankruptcy Code or any such comparable laws.


 


5.6                                 Notwithstanding
anything contained herein to the contrary, the loss sharing and recourse terms
agreed to by ACSI in this Agreement are in addition to (and do not limit) the repurchase and other obligations of Vendor
to CDF hereunder, under any Guaranty
referenced in Section 17 below or under any other agreement
with CDF.  Therefore, any amount payable
by Vendor under the Repurchase Cap, any
Guaranty referenced in Section 17 below or under any other
agreement with CDF shall not be included or considered as payment(s) by
Vendor for purposes of the cap set forth in this Section 5.


 


6.                                       Exclusivity.  During the
term of this Agreement, which includes the initial term and any additional
terms thereafter, Vendor agrees to the
following:


 


(a)                                  Vendor will not, directly or through its affiliates, enter into, consummate, or
otherwise arrange for any Vendor supported (monetary or otherwise) special,
preferred, private label, joint venture, business combination, contractual
arrangement, partnership, strategic alliance or other legal or business
relationship with any person or entity other than CDF for the purpose (whether
exclusive, primary or otherwise) of operating or promoting any type of
wholesale financing program to its
Dealers in the United States;


 


(b)                                 Vendor will use
its best effort to encourage Dealers to use CDF as their financing source with
respect to any purchase of Inventory;


 


(c)                                  Vendor  will market, 
support and promote CDF’s wholesale financing program to Dealers; and


 


(d)                                 Vendor will not
refer any Dealers in the United States who wish to obtain financing for the
purchase of Inventory to, nor support any Special Programs (as defined below)
with, any financing source other than CDF. 
As used herein “Special Programs” means any manufacturer paid free
flooring or other program in which Vendor pays all or any portion of a Dealer’s
financing obligation to a Dealer’s financing source or provides any other
incentive, discount or credit support to or for the benefit of a Dealer in
connection with such Dealer’s obtaining financing through a financing source in
connection with the purchase of inventory in the United States.


 


7.                                       Confidentiality. 
Each party to this Agreement shall, and shall cause its officers, directors,
managers, employees, representatives, agents and affiliates to, keep any
nonpublic information regarding the other party or its affiliates which the
other party or any of its affiliates designates as confidential and furnishes
or discloses to such party, any nonpublic information concerning the formation
and operation of the relationship between the parties pursuant to this
Agreement, and any other nonpublic information relating to the performance by
the parties or any of their affiliates, strictly confidential and not disclose
any such information to any person or entity (except for such party’s financial
and legal advisors, lenders and accountants to the extent deemed necessary by
such party; provided that each party to whom such confidential information
is disclosed shall be advised of and instructed to comply with the terms of
this Section 7 and except that such information may be disclosed to
a potential acquirer of CDF or any of its affiliates in accordance with a
confidentiality agreement that prohibits third party disclosure or use thereof
in a manner detrimental to Vendor), or use any such information in any business
of such party or any affiliate of such party unrelated to the arrangement
described herein.  In addition, for two (2) years
following termination of this Agreement, CDF and Vendor shall, and shall cause
their officers, directors, managers, employees, representatives, agents and
affiliates to, keep the information systems and other technology of the other
party strictly confidential and not disclose such information systems and
technology to any 


 

















 


person or entity, except
as contemplated by this Agreement. 
Notwithstanding the foregoing, a party shall be under no obligation to
keep confidential (i) information which is known to the receiving party
prior to receipt thereof from the disclosing party, (ii) information which
is or becomes generally available to the public other than as a result of a
disclosure in violation of this Section 7, (iii) information
disclosed to a party by a third party having the right to disclose such
information to such party, (iv) information which any nationally
recognized statistical rating organization may reasonably request in connection
with its rating of Vendor, CDF or any of their affiliates, (v) information
which any lender, insurer, insurance broker or related party may reasonably
request in connection with providing lending or insurance services to Vendor,
CDF or any of their affiliates, (vi) information which a party is legally
compelled to disclose or requested to disclose by any regulatory or
self-regulatory official, body or organization (including any securities
exchange on which securities of Vendor, CDF or any of their affiliates may be
listed from time to time); provided that each party agrees to use all
reasonable efforts to notify the other party of any legal requirement to
disclose sufficiently in advance of the disclosure to permit the other party to
challenge the legal requirement or (vii) information which a party
reasonably believes is necessary or appropriate for disclosure in connection
with the preparation of such party’s or its affiliates’ financial statements in
accordance with GAAP or such party’s or its affiliates’ reports required to be
filed with the Securities and Exchange Commission.  Notwithstanding the foregoing, each party may
disclose otherwise confidential information to its affiliates and any such
affiliate may use such confidential information in connection with its
business, as long as such use is not inconsistent with the obligations of such
party or such affiliate under this Agreement, to the extent such disclosure and
use is not prohibited by any agreement with any dealer, distributor or other
commercial customer of Vendor or CDF, as the case may be, or any other third
party or by law or regulation.


 


8.                                       Extension
of Time; Waivers.  CDF may
extend the time a Dealer in default has to fulfill its obligations to CDF
without notice to Vendor and without altering Vendor’s obligations
hereunder.  Vendor waives any rights it may
have to notice of nonpayment, nonperformance, dishonor, the amount of
indebtedness of a Dealer outstanding at any time, any legal proceeding against
a Dealer, and any other demands and notices except as required by law, and any
rights it may have to require CDF to proceed against a Dealer or the Inventory
or to pursue any other remedy in CDF’s power. 
Vendor’s liability to CDF is direct and unconditional and will not be
affected by any change in the terms of payment or performance of any agreement
between CDF and Dealer, or the release, settlement or compromise of or with any
party liable for the payment or performance thereof, or the release or
non-perfection of any security interest granted CDF in any agreement between
CDF and Dealer, or any change in Dealer’s financial condition, or the
interruption of business relations between CDF and Dealer, or any other defense
available to a surety.


 


9.                                       Additional
Vendor Covenants.  Vendor
covenants as follows:


 


(a)                                  All Inventory
financed by CDF (for the avoidance of doubt, including but not limited to any
Purchased Accounts and the inventory related to such accounts) shall be subject
to applicable product warranties of Vendor, and Vendor agrees to perform, or
cause to be performed, all repairs, modifications and/or other acts required by
Vendor pursuant to such product warranties. 
All expenses of performance under this section shall be paid by Vendor.


 


(b)                                 If ACSI accepts
the return from a Dealer of any Inventory financed by CDF (for the avoidance of
doubt, including but not limited to any Purchased Accounts and the inventory
related to such accounts), whether such acceptance or return is voluntary or
otherwise, and whether or not any substitution is made for such returned
Inventory, ACSI will reimburse CDF for the total unpaid principal balance owed
to CDF with respect to the related invoice , within thirty (30) days after the
return.  If Dealer is entitled to the
payment by ACSI of any rebates, reserves or incentives, ACSI shall advise CDF
of the amount and nature of the payment and shall obtain CDF’s approval (as
long as this does not violate any law or agreement or offset opportunity
(between Dealer and ACSI) applicable to ACSI) (which will not be unreasonably
withheld) prior to remitting such funds to Dealer.


 


(c)                                  Vendor shall
provide CDF with AC’s (1) year-end balance sheet and annual profit and
loss statement for each of its fiscal years prepared in accordance with
generally accepted accounting principles, consistently applied, within 20 days
after the same are prepared but in no event later than 90 days after the end of
each fiscal year,  (2) within
forty-five (45) days after the end of each of AC’s fiscal quarters, a
reasonably detailed balance sheet and income statement as of the last day of
such quarter covering AC’s operations for such quarter, and (3) at least
thirty (30) days after the end of AC’s fiscal year end, financial projections
covering AC’s upcoming fiscal year;
provided, however, the financial information described in the foregoing clauses
(1) and (2) need not be provided if available to CDF on the website
of the Securities and Exchange Commission.


 


(d)                                 Vendor
covenants and agrees that so long as (i) the Agreement remains in effect, (ii) there
remains any potential liability with respect to any financial transactions
entered into by CDF with any Dealer prior to the effective date of the
termination, including, without limitation, transactions that will not be
completed until after the effective date of termination, or (iii) any
other obligations of Vendor remains outstanding, AC shall maintain a minimum
Tangible Net Worth of not less than One Hundred Twenty-Five Million Dollars
($125,000,000.00), as of quarter ending June 30, 2009, and each successive
fiscal quarter end thereafter. “Tangible Net Worth” as used herein shall
mean as of any date the sum of AC’s (a) net worth (i.e., total assets
minus liabilities) as reflected on each of its last twelve-month fiscal
financial statements that are filed with the SEC, (b) net earnings since
the end of the fiscal year covered by such financial statements, both after
provision for taxes and with inventory determined on a first in, first out
basis, (c) debts owed to any guarantor, affiliate or employee of AC which
are fully subordinated to CDF’s satisfaction (“Subordinated Debt”), less
the sum of AC’s (i) intangible assets, including, without limitation,
unamortized leasehold improvements, goodwill, franchises, licenses, patents,
tradenames, copyrights, service marks, brand names, and covenants not to
compete, (ii) prepaid expenses, (iii) franchise fees, (iv) notes,
accounts receivable and other amounts which are owed to it by any guarantor,
affiliate or employee of AC or


 

















 


Guarantor, (v) losses since the end of the fiscal year covered by
such financial statements and (vi) interest in the cash surrender value of
any officer’s or shareholder’s life insurance policies.


 


(e)                                  Beginning on September 30,
2009, and each successive fiscal quarter-end thereafter as described below, AC
will achieve EBITDA for each period shown below of not less than the amounts
set forth below:


 


fiscal quarter ending September 30,
2009                           equal to or
greater than $22 million


 


fiscal quarter ending December 31,
2009                              equal to or
greater than $7 million


 


fiscal quarter ending March 31,
2010                                                  equal to or greater than
$(7.25) million


 


CDF shall determine and
thereafter provide AC with financial covenants applicable for fiscal quarter
ending June 30, 2010 and thereafter using financial projections covering
AC’s upcoming fiscal year as described in Section 9(c).


 


“EBITDA” means, for
any period of calculation, the net income of AC before provision for income
taxes, interest expense (including without limitation, implicit interest
expense on capitalized leases), depreciation and amortization, excluding
therefrom (to the extent included):  (A) non-operating
gains (including, without limitation, extraordinary or nonrecurring gains,
gains from discontinuance of operations and gains arising from the sale of
assets other than inventory) during the applicable period; (B) net
earnings of any business entity in which AC has an ownership interest (other
than a wholly owned subsidiary) unless such net earnings shall have actually
been received by AC in the form of cash distributions; (C) any portion of
the net earnings of any subsidiary which for any reason is unavailable for
payment of dividends to AC; (D) the earnings of any entity to which any
assets of AC shall have been sold, transferred or disposed of, or into which AC
shall have merged, or been a party to any consolidation or other form of
reorganization, prior to the date of such transaction; (E) any gain
arising from the acquisition of any securities of AC; and (F) non-operating
losses arising from the sale of capital assets during such period.


 


(f)                                    Beginning on September 30,
2009, and each successive fiscal quarter-end thereafter as described below, AC
shall maintain a “minimum liquidity”, which shall be defined as all cash
and, without duplication, Cash Equivalents, plus “Working Capital
Revolver Availability”, of not less than the amounts set forth below:


 


fiscal quarter ending September 30,
2009                           equal to or
greater than $10 million


 


fiscal quarter ending December 31,
2009                              equal to or
greater than $10 million


 


fiscal quarter ending March 31,
2010                                                  equal to or greater than $15
million


 


CDF shall determine and
thereafter provide AC with financial covenants applicable for fiscal quarter
ending June 30, 2010 and thereafter using financial projections coveringAC’s
upcoming fiscal year as described in Section 9(c).


 


“Cash Equivalents” shall mean investments in (i) interest-bearing
United States government obligations; (ii) certificates of deposit issued
by any commercial bank chartered under the Laws of the United States or any
state thereof which has capital and surplus of not less than $500,000,000; (iii) prime
commercial paper rated A1 or better by Standard and Poor’s Corporation or Prime
P 1 or better by Moody’s Investor Service, Inc.; (iv) agreements
involving the sale to AC of United States government securities and their
guarantied repurchase the next business day by a commercial bank chartered
under the Laws of the United States or any state thereof which has capital and
surplus of not less than $500,000,000;  (v) time
deposits with any commercial bank chartered under the Laws of the United States
or any state thereof which has capital and surplus of not less than
$500,000,000; (vi) money market accounts at either a commercial bank
chartered under the Laws of the United States or any state thereof which has capital
and surplus of not less than $500,000,000, or a securities firm which has
capital and surplus of not less than $500,000,000; or (vii) municipal
variable rate demand obligations supported by a letter of credit issued by  any commercial bank chartered under the Laws
of the United States or any state thereof which has capital and surplus of not
less than $500,000,000.


 


“Working Capital Revolver Availability” shall mean,
as of any date, the maximum amount available for borrowing under AC’s agreement
for a working capital line of credit with a bank, less any outstanding
loans, reserves and deductions thereunder.


 


(g)                                 The sale by
Vendor of all Inventory financed by CDF (for the avoidance of doubt, including
but not limited to any Purchased Accounts and the inventory related to such
accounts), and the underlying transaction related thereto, shall comply with
all applicable laws, rules, regulations and orders of all governmental bodies
having jurisdiction over such transaction, including but not limited to, all
relevant trade controls requirements, requirements issued by the U.S. Office of
Foreign Asset Control (“OFAC”), the U.S. Department of Commerce’s Bureau of
Industry and Security (“BIS”) or the U.S. State Department’s Directorate of
Defense Trade Controls (“DDTC”), and no such sale or transaction shall involve
dealings between Vendor and any person or entity that a U.S. company would be
prohibited from dealing 


 

















 


with
under any laws or regulations of the United States. In addition to any other
right that CDF may have under this Section or any other Section of
this Agreement, any breach by Vendor of the provisions of this subsection shall
require Vendor to indemnify and hold CDF harmless from any and all costs,
damages, judgments, penalties, sanctions or expenses that may be imposed upon,
or incurred by, CDF as a result of CDF’s financing of any item of Inventory
relating to the sale or transaction which is the subject of such breach by
Vendor.


 


10.                                 Expenses; Release of Information.  Vendor will pay all of CDF’s expenses
(including, but not limited to, court costs, arbitration fees and reasonable
attorneys’ fees) if CDF is required or elects to enforce its rights against
Vendor.  Vendor will release to CDF any
credit, financial or other information on any Dealer upon each request by
CDF.  Vendor will immediately notify CDF
if Vendor reasonably believes that a Dealer has violated the terms of any
franchise, permission, license or right to sell or deal in the Inventory.


 


11.                                 Invoices.  Invoices submitted to CDF by Vendor should
indicate that the Inventory is “Sold to (Name of Dealer)” and “Financed by GE Commercial Distribution Finance Corporation”.  In no event shall CDF be deemed to be the
purchaser of any Inventory.


 


12.                                 Successors
and Assigns; Benefited Parties.  This Agreement will be binding upon and inure
to the benefit of CDF’s successors and assigns. 
Vendor cannot assign this Agreement without CDF’s prior written
consent.  CDF may perform or cause to be
performed any or all of its obligations hereunder by any of its subsidiaries
and/or affiliated companies. Vendor’s obligations under this Agreement inure to
the benefit of any of CDF’s subsidiaries and/or affiliated companies.  This Agreement is not intended, nor shall it
be deemed to, directly or indirectly, benefit any person or entity, including
any Dealer, who is not a party hereto.


 


13.                                 Events
of Default.  The
occurrence of any of the following events shall be deemed an “Event of Default”
under this Agreement:  (a) Vendor’s
failure to pay when due any amount owed CDF hereunder or under any other
agreement between CDF and Vendor; (b) any representation made by Vendor to
CDF shall not be true when made or Vendor shall fail to perform or observe any
covenant, warranty, term or provision hereunder or under any other agreement
between CDF and Vendor (and with respect to any breach of Sections 9(d), 9(e) or
9(f) above shall not have been cured within ninety (90) days after
notice by CDF to Vendor of such breach by achieving full compliance for the
next fiscal quarter); (c) any termination or impairment of any guaranty of
Vendor’s obligations hereunder or of any guaranty provided by Vendor, including
but not limited to the Guaranty referenced in Section 17; (d) Vendor
shall cease existence as a corporation, partnership, limited liability company
or trust, as applicable; (e) Vendor ceases or suspends business; (f) Vendor
makes a general assignment for the benefit of creditors; (g) Vendor
becomes insolvent or voluntarily or involuntarily becomes subject to the Federal
Bankruptcy Code, any state insolvency law or any similar law; (h) any
receiver is appointed for any assets of Vendor; (i) Vendor sells,
transfers or assigns all or substantially all of its assets; (j) Vendor
merges its business with another business, regardless of whether Vendor is the
surviving entity;  (k) Vendor shall
fail to maintain the Letter of Credit Addendum and the Irrevocable Standby
Letter of Credit in the amount and under the terms as described in Section 17;
(l)  failure to maintain, and provide
CDF evidence to its satisfaction that, a working capital line of credit with a
commitment no shorter than the initial term of this Agreement and in an amount
sufficient to meet the financial covenant set forth in Section 9(f) above
is in effect for AC; (m) breach the terms of any arrangement or
agreement with any other lender; or (n) there is any material adverse
change in Vendor’s financial condition.


 


14.                                 Remedies
Upon Default.  Upon the
occurrence of any Event of Default (and after any applicable cure period as
provided in Section 13), CDF shall have the right, at CDF’s option,
to immediately exercise one or more of the following remedies: (a) refuse
to extend any further financing to Dealers; (b) terminate the Agreement;
and/or (c) exercise any other rights it may have under applicable law.


 


15.                                 Term and  Termination.                  The term of this Agreement
shall begin on the Effective Date set forth above and shall continue, unless
earlier terminated pursuant to Section 14 or by mutual agreement of
the parties, until October 14, 2011 and thereafter, unless earlier
terminated pursuant to Section 14 or by mutual agreement of the
parties, shall be extended automatically for additional one-year terms unless
at least twelve (12) months prior to the expiration of the initial or any
additional term thereof (as applicable) either party gives written notice to
the other party of its intention not to extend the term of this Agreement.
Notwithstanding anything contained herein to the contrary, CDF may terminate
this Agreement immediately if an Event of Default has occurred.  In any event, no termination of this
Agreement will affect (a) any of Vendor’s (or its assignee’s, whether
permitted or unpermitted) liability with respect to any financial transactions
entered into by CDF with any Dealer prior to the effective date of the
termination, including, without limitation, transactions that will not be
completed until after the effective date of termination, or (b) any other
obligations of Vendor outstanding on the effective date of such termination.


 


16.                                 Miscellaneous.


 


(a)                                  Scope of
Agreement.  This
Agreement constitutes the entire agreement between the parties concerning the
subject matter hereof, and all prior writings, discussions and/or agreements
are superseded by, and merged into, the terms and provisions of this
Agreement.  No modification or amendment
to this Agreement shall be valid or binding unless reduced to writing and
executed by the parties hereto. 
Notwithstanding the foregoing, the parties acknowledge that there may be
other agreements between them covering related matters such as collateral
support, financing program terms, manufacturer sponsored rate programs,
interest free period programs and electronic invoice 


 

















 


transmission
terms (any or all of which terms may be set forth in a terms letter executed in
connection herewith and may be revised from time to time without necessitating
an amendment to this Agreement) which shall continue in full force and
effect.  This Agreement shall not be
deemed to create, or intend, a joint venture, partnership, or agency
relationship between Vendor and CDF.


 


(b)                                 Late Payment;
Collection Costs.  Any amounts
not paid by Vendor when due under this Agreement shall accrue interest at the
rate of 1.5% per month until paid in full. 
Vendor further agrees to pay all reasonable out of pocket costs and
expenses, including attorneys’ fees, actually incurred by CDF in enforcing any
of the provisions of this Agreement.


 


(c)                                  Change in
Vendor’s Status; Waiver of Acceptance.  Vendor will notify CDF of any change in its
name or business structure.  Vendor
waives notice of CDF’s acceptance of this Agreement.


 


(d)                                 Survival.  Notwithstanding any termination of this
Agreement, (a) Section 1(B), Section 7, Section 16(b),
Section 16 (f),  Section 16(h), Section 18, Section 19,
Section 20, Section 21, the last sentence of Section 2,
and the last sentence of Section 15 shall survive any such
termination and (b) any outstanding payment obligations of any party, and
all provisions of this Agreement relating to payment thereof, including but not
limited to Section 3, Section 4 and Section 5
shall survive any such termination until all such payment obligations are paid
in full.


 


(e)                                  Force
Majeure.  CDF shall be
excused for failure to perform any obligation hereunder to the extent that such
failure is directly or indirectly caused by acts of God; national emergency;
disruptions of or adverse change in financial, banking or capital markets
conditions; labor dispute; software, equipment or electrical malfunction;
transportation delays; telecommunication failures; or any other event or
circumstance beyond the reasonable control of CDF, but only until the cessation
of such event or circumstance, or until any such failure or damage is corrected
such that CDF is then able to perform such obligation.  In the event that CDF’s performance hereunder
is affected by such an event or circumstance, CDF shall promptly notify the
Vendor of same, giving reasonably full particulars thereof and, insofar as
known, the probable extent to which it will be unable to perform, or will be
delayed in performing, its obligations hereunder, and CDF shall use reasonable
efforts to remove such force majeure.


 


(f)                                    Other.  If at any time any one or more of the
provisions of this Agreement becomes invalid, illegal or unenforceable in any
respect under any law, the validity, legality and enforceability of the
remaining provisions hereof shall not in any way be affected or impaired
thereby.  CDF’s failure to exercise any
rights granted hereunder shall not operate as a waiver of those rights.  The rights of CDF under this Agreement are
cumulative, may be exercised as often as it considers appropriate, and are in
addition to its rights under applicable law. Section headings herein are
for convenience of reference only and shall not limit the scope of any
provisions hereof.  This Agreement shall
be interpreted without presumption for or against the drafter of all or any
part of this Agreement. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.


 


(g)                                 Fax;
Counterparts.  This
Agreement may be validly executed and delivered by fax or other electronic
transmission and in one or more counterpart signature pages.


 


(h)                                 Joint and
Several Liability.    Each Vendor
shall be jointly and severally liable with each other for the full and punctual
payment and performance when due, whether upon demand, at maturity or earlier
by reason of acceleration or otherwise, and at all times thereafter, of all
obligations owing to CDF hereunder (“Indebtedness”), including without
limitation all obligations relating to any representations, warranties and
covenants of each other to CDF and all other Indebtedness of each other,
whether before, during or after any bankruptcy proceeding involving any Vendor.


 


17.                                 Conditions
Precedent.  This Agreement shall not become effective
until each of the following conditions have been satisfied:


 


(a)                                  Arctic Cat Sales Inc. has executed and delivered to CDF a Program Terms
Letter in the form of Exhibit A attached hereto;


 


(b)                                 Arctic Cat Inc. has executed and delivered to CDF a Guaranty in the form
of Exhibit B attached hereto;


 


(c)                                  Arctic Cat Sales Inc. has executed and delivered to CDF a Guaranty in the
form of Exhibit C attached hereto:


 


(d)                                 Arctic Cat Inc. has delivered to CDF an executed Letter of Credit
Addendum and an Irrevocable Standby Letter of Credit in the amount of Ten
Million Dollars ($10,000,000.00) from a bank acceptable to CDF and in the form
of Exhibit D hereto; and


 


(e)                                  Vendor must provide CDF evidence to its satisfaction that a working
capital line of credit with a commitment no shorter than the initial term of
this Agreement and in an amount sufficient to meet the financial covenant set
forth in Section 9(f) above is in effect forAC.


 


18.                                 Limitation
of Remedies and Damages. In the event there is any dispute under
this Agreement, the aggrieved party shall not be entitled to exemplary or
punitive damages so that the aggrieved party’s remedy in connection with any
action arising under or in any way related to this Agreement shall be limited
to a breach of contract action and any damages in connection therewith are
limited to actual and direct damages, except that CDF may seek equitable relief
in connection with any judicial repossession of, or temporary restraining order
with respect to, the Inventory.


 


19.                                 BINDING
ARBITRATION.


 


Any
controversy or claim arising out of or relating to this Agreement, the
relationship resulting in or from this Agreement, the breach of any duties
hereunder or any other relationship, transaction or dealing between the parties
(collectively “Disputes”) will be settled by binding arbitration in accordance
with the Commercial Arbitration Rules of either: 


 

















 


(a) The
American Arbitration Association (“AAA”); or (b) United States Arbitration &
Mediation (“USA&M”).  Any arbitration
proceeding must be instituted, with respect to any Dispute, within two (2) years
after the date the incident giving rise thereto occurred, whether or not any
damage was sustained or capable of ascertainment or either party knew of such
incident.  Failure to institute an
arbitration proceeding within such period will constitute an absolute bar and
waiver to the institution of any proceeding, whether arbitration or a court
proceeding, with respect to such Dispute. 
Notwithstanding the foregoing, this limitations provision will be
suspended temporarily as of the date any of the following events occur with
respect to Dealer or either party hereto and will not resume until the date the
Dealer or either party hereto is no longer subject to:  (i) bankruptcy, (ii) receivership, (iii) any
proceeding regarding an assignment for the benefit of creditors, or (iv) any
legal proceeding, civil or criminal, which prohibits Dealer or either party
from foreclosing any interest it might have in the collateral of the other
party.  The party first filing an
arbitration claim shall designate which arbitration forum and rules are to
be applied for all disputes between the parties.  The arbitration rules are found at
www.adr.org for AAA, and at www.usam-midwest.com for USA&M.  AAA claims may be filed in any AAA
office.  Claims filed with USA&M
shall be filed in its Midwest office located at 720 Olive Street, Suite 2020,
St. Louis, Missouri 63101. 
Notwithstanding the foregoing, the parties agree that either party may
pursue claims against the other that do not exceed Fifteen Thousand Dollars
($15,000) in the aggregate in a court of competent jurisdiction.  Except as otherwise stated herein, all
notices, arbitration claims, responses, requests and documents will be
sufficiently given or served if mailed or delivered: (a) to CDF at 5595
Trillium Boulevard, Hoffman Estates, Illinois. 60192, Attention:  General Counsel; and (b) to any other
party at the address specified herein; or such other address as the parties may
specify from time to time in writing. 
The parties agree that all arbitrators selected will be attorneys with
at least five (5) years secured transactions experience.  A panel of three arbitrators shall hear all
claims exceeding One Million Dollars ($1,000,000), exclusive of interest, costs
and attorneys’ fees.  Each party hereby
consents to a documentary hearing for all arbitration claims, by submitting the
dispute to the arbitrator(s) by written briefs and affidavits, along with
relevant documents.  However, arbitration
claims will be submitted by way of an oral hearing, if any party requests an
oral hearing within forty (40) days after service of the claim, and that party
remits the appropriate deposit for AAA’s fees and arbitrator compensation
within ten (10) days of making the request.  Each party agrees that failure to timely pay
all fees and arbitrator compensation billed to the party requesting the oral
hearing will be deemed such party’s consent to submitting the Dispute to the
arbitrator on documents and such party’s waiver of its request for oral
hearing. The site of all oral arbitration hearings will be in the Division of
the Federal Judicial District in which AAA or USA&M maintains a regional
office that is closest to Vendor.  Any
award rendered by the arbitrator(s) may be entered as a judgment or order
and confirmed or enforced by either party in any state or federal court having
competent jurisdiction thereof.  Nothing
herein will be construed to prevent CDF’s or Vendor’s use of bankruptcy,
receivership, injunction, repossession, replevin, claim and delivery,
sequestration, seizure, attachment, foreclosure, and/or any other prejudgment
or provisional action or remedy relating to any Inventory for any current or
future debt owed by either party to the other. 
Any such action or remedy will not waive CDF’s or Vendor’s right to
compel arbitration of any Dispute.  The
non-prevailing party will pay all of the costs and expenses (including, without
limitation, reasonable attorneys’ fees) incurred by the prevailing party in any
arbitration proceeding.  If either party
brings or appeals any judicial action to vacate or modify any award rendered
pursuant to arbitration or opposes the confirmation of such award and the party
bringing or appealing such action or opposing confirmation of such award does
not prevail, such party will pay all of the costs and expenses (including,
without limitation, court costs, arbitrators fees and expenses and attorneys’
fees) incurred by the other party in defending such action.  Additionally, if either party brings any
action for judicial relief in the first instance without pursuing arbitration
prior thereto, the party bringing such action for judicial relief will be
liable for and will immediately pay to the other party all of the other party’s
costs and expenses (including, without limitation, court costs and attorneys’
fees) to stay or dismiss such judicial action and/or remove it to
arbitration.  The failure of either party
to exercise any rights granted hereunder shall not operate as a waiver of any
of those rights. This Agreement concerns transactions involving commerce among
the several states.  The arbitrators will
not be empowered to award exemplary or punitive damages.  The arbitrator(s) will decide if any
inconsistency exists between the rules of the applicable arbitral forum
and the arbitration provisions contained herein.  If such inconsistency exists, the arbitration
provisions contained herein will control and supersede such rules. The
agreement to arbitrate will survive termination of this Agreement.


 


20.                               JURY
TRIAL WAIVER; CONSENT TO JURISDICTION; PUNITIVE DAMAGE WAIVER. IF
THIS AGREEMENT IS FOUND TO BE NOT SUBJECT TO ARBITRATION, ANY LEGAL PROCEEDING
WITH RESPECT TO ANY DISPUTE WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION
BY A JUDGE WITHOUT A JURY. VENDOR AND CDF WAIVE ANY RIGHT TO A JURY TRIAL IN
ANY SUCH PROCEEDING. SIMILARLY, IF THIS AGREEMENT OR A PARTICULAR DISPUTE
HEREUNDER IS NOT SUBJECT TO ARBITRATION, VENDOR HEREBY CONSENTS TO THE
JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN ILLINOIS AND
WAIVES ANY OBJECTION WHICH VENDOR MAY HAVE BASED ON IMPROPER VENUE OR
FORUM NON CONVENIENS TO THE CONDUCT OF ANY ACTION OR PROCEEDING IN ANY SUCH
COURT. VENDOR HEREBY WAIVES ANY RIGHT TO PUNITIVE DAMAGES OF ANY KIND AGAINST
CDF IN ANY PROCEEDING OR AWARD, WHETHER IN ARBITRATION OR LITIGATION.


 


21.                               GOVERNING
LAW. THE LAWS OF THE STATE OF ILLINOIS WILL GOVERN THIS AGREEMENT AND ALL
TRANSACTIONS HEREUNDER AS TO INTERPRETATION, ENFORCEMENT, VALIDITY,
CONSTRUCTION, EFFECT AND IN ALL OTHER RESPECTS; PROVIDED, HOWEVER, THAT THE
FEDERAL ARBITRATION ACT 


 

















 


(“FAA”),
TO THE EXTENT INCONSISTENT, WILL SUPERSEDE THE LAWS OF SUCH STATE AND GOVERN
ALL ARBITRATION PROCEEDINGS HEREUNDER.


 


THIS AGREEMENT CONTAINS BINDING ARBITRATION, JURY WAIVER


AND PUNITIVE DAMAGE WAIVER PROVISIONS


 


IN WITNESS WHEREOF, the parties have entered
into this Agreement as of the date first written above.


 


	
  Arctic Cat Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  TIMOTHY C. DELMORE

  	
   

  
	
  Print
  Name:

  	
  Timothy
  C. Delmore

  	
   

  
	
  Title:

  	
  Chief
  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
  Address
  for Notices:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  505
  North Highway 169, Suite 1000

  	
   

  
	
  Plymouth,
  MN 55441

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Arctic Cat Sales Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /S/
  TIMOTHY C. DELMORE

  	
   

  
	
  Print
  Name:

  	
  Timothy
  C. Delmore

  	
   

  
	
  Title:

  	
  Chief
  Financial Officer

  	
   

  
	
   

  	
   

  
	
  Address
  for Notices:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  505
  North Highway 169, Suite 1000

  	
   

  
	
  Plymouth,
  MN 55441

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  GE
  COMMERCIAL DISTRIBUTION FINANCE CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  PETER K. LANNON

  	
   

  
	
  Print
  Name:

  	
  Peter
  K. Lannon

  	
   

  
	
  Title:

  	
  Managing
  Director

  	
   

  
	
   

  	
   

  
	
  Address
  for Notices:

  	
   

  
	
  5595
  Trillium Boulevard

  	
   

  
	
  Hoffman
  Estates, IL 60192

  	
   

  
	
  Attn:
  Credit Department