Document:

Exhibit
10.3

 

PARTIAL TERMINATION OF AND SECOND AMENDMENT TO

AMENDED AND RESTATED MASTER LEASE AGREEMENT

(LEASE NO. 2)

 

THIS PARTIAL TERMINATION OF AND SECOND AMENDMENT TO AMENDED AND
RESTATED MASTER LEASE AGREEMENT (LEASE NO. 2) (this “Amendment”) is
made and entered into as of August 1, 2010 by and among each of the
parties identified on the signature pages hereof as a landlord
(collectively, “Landlord”) and each of the parties identified on the
signature pages hereof as a tenant (jointly and severally, “Tenant”).

 

W  I  T  N  E
S  S  E  T  H:

 

WHEREAS, pursuant to the terms of that certain Amended and
Restated Master Lease Agreement (Lease No. 2), dated as of August 4,
2009, as amended by that certain Partial Termination of and First Amendment to
Amended and Restated Master Lease Agreement (Lease No. 2), dated as of November 1,
2009 (as so amended, “Amended Lease No. 2”), Landlord leases to
Tenant, and Tenant leases from Landlord, the Leased Property (this and other
capitalized terms used but not otherwise defined herein having the meanings
given such terms in Amended Lease No. 2), all as more particularly
described in Amended Lease No. 2; and

 

WHEREAS, on or about the date hereof, SPTIHS
Properties Trust has sold certain real property and related improvements, as
follows: (i) the Ainsworth Care Center located at 143 North Fullerton,
Ainsworth, Nebraska and more particularly described on Exhibit A-30 to
Amended Lease No. 2 (the “Ainsworth Property”), (ii) the
Exeter Care Center located at 425 South Empire Avenue, Exeter, Nebraska and
more particularly described on Exhibit A-32 to Amended Lease No. 2
(the “Exeter Property”) and (iii) Logan Valley Manor located at
1035 Diamond Street, Lyons, Nebraska and more particularly described on Exhibit A-34
to Amended Lease No. 2 (the “Logan Valley Manor Property” and,
together with the Ainsworth Property and the Exeter Property, collectively, the
“Nebraska Sale Properties”); and

 

WHEREAS, in connection with the sale
of the Nebraska Sale Properties, Landlord and Tenant wish to amend Amended
Lease No. 2 to terminate Amended Lease No. 2 with respect to the
Nebraska Sale Properties;

 

NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the mutual receipt
and legal sufficiency of which are hereby acknowledged, Landlord and Tenant
hereby agree that, effective 

 

 

as
of the date hereof, Amended Lease No. 2 is hereby amended as follows:

 

1.             Partial
Termination of Lease.  Amended
Lease No. 2 is terminated with respect to the Nebraska Sale Properties and
neither Landlord nor Tenant shall have any further rights or liabilities
thereunder with respect to the Nebraska Sale Properties from and after the date
hereof, except for those rights and liabilities which by their terms survive
the termination of Amended Lease No. 2.

 

2.             Definition of
Minimum Rent.  The defined
term “Minimum Rent” set forth in Section 1.68 of Amended Lease No. 2
is deleted in its entirety and replaced with the following:

 

“Minimum Rent”  shall mean the sum of Forty-Eight Million,
Seven Hundred Ninety-Four Thousand, Eight Hundred Thirty-Four and 59/100
Dollars ($48,794,834.59) per annum.

 

3.             Schedule 1.  Schedule 1 to Amended Lease No. 2 is
deleted in its entirety and replaced with Schedule 1 attached hereto.

 

4.             Exhibit A.  Exhibit A to Amended Lease No. 2 is
amended by deleting each of Exhibit A-30, Exhibit A-32 and Exhibit A-34
attached thereto in their respective entireties and replacing each of them with
“Intentionally Deleted.”

 

5.             Ratification.  As amended hereby, Amended Lease No. 2
is ratified and confirmed.

 

 

[Remainder of page intentionally left blank;

signature pages follow]

 

2

 

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

 

	
   

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SPTIHS PROPERTIES TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SPTMNR PROPERTIES TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SNH/LTA PROPERTIES GA LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SNH/LTA PROPERTIES TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  O.F.C. CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SNH CHS PROPERTIES TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CCC OF KENTUCKY TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  President

  

 

3

 

	
   

  	
   

  	
  LEISURE PARK VENTURE LIMITED PARTNERSHIP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  CCC Leisure Park Corporation, 

  
	
   

  	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CCDE SENIOR LIVING LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CCOP SENIOR LIVING LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CCC PUEBLO NORTE TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CCC RETIREMENT COMMUNITIES II, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Crestline
  Ventures LLC,

  
	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CCC INVESTMENTS I, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  President

  
						

 

4

 

	
   

  	
   

  	
  CCC FINANCING I TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CCC FINANCING LIMITED, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  CCC
  Retirement Trust,

  
	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SNH SOMERFORD PROPERTIES TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HRES1 PROPERTIES TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  President

  
						

 

5

 

	
   

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FIVE
  STAR QUALITY CARE TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Bruce J. Mackey Jr.

  
	
   

  	
   

  	
   

  	
  Bruce J. Mackey Jr.

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FS
  TENANT HOLDING COMPANY TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Bruce J. Mackey Jr.

  
	
   

  	
   

  	
   

  	
  Bruce J. Mackey Jr.

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FS
  COMMONWEALTH LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Bruce J. Mackey Jr.

  
	
   

  	
   

  	
   

  	
  Bruce J. Mackey Jr.

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FS
  PATRIOT LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Bruce J. Mackey Jr.

  
	
   

  	
   

  	
   

  	
  Bruce J. Mackey Jr.

  
	
   

  	
   

  	
   

  	
  President

  

 

6

 

SCHEDULE 1

 

PROPERTY-SPECIFIC INFORMATION

 

	
  Exhibit

  	
   

  	
  Property Address

  	
   

  	
  Base Gross

  Revenues

  (Calendar

  Year)

  	
   

  	
  Base Gross

  Revenues

  (Dollar Amount)

  	
   

  	
  Commencement

  Date

  	
   

  	
  Interest

  Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-1

  	
   

  	
  Ashton
  Gables in Riverchase 

  2184 Parkway Lake Drive

  Birmingham,
  AL 35244

  	
   

  	
  2009

  	
   

  	
  N/A

  	
   

  	
  08/01/2008

  	
   

  	
  8

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-2

  	
   

  	
  Lakeview
  Estates

  2634
  Valleydale Road

  Birmingham,
  AL 35244

  	
   

  	
  2009

  	
   

  	
  N/A

  	
   

  	
  08/01/2008

  	
   

  	
  8

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-3

  	
   

  	
  Forum
  at Pueblo Norte

  7090
  East Mescal Street

  Scottsdale,
  AZ  85254

  	
   

  	
  2005

  	
   

  	
  $

  	
  11,470,312

  	
   

  	
  01/11/2002

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-4

  	
   

  	
  La
  Salette Health and

  Rehabilitation
  Center

  537
  East Fulton Street

  Stockton,
  CA  95204

  	
   

  	
  2005

  	
   

  	
  $

  	
  7,726,002

  	
   

  	
  12/31/2001

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-5

  	
   

  	
  Thousand
  Oaks Health Care Center

  93
  West Avenida de Los Arboles

  Thousand
  Oaks, CA  91360

  	
   

  	
  2005

  	
   

  	
  $

  	
  8,087,430

  	
   

  	
  12/31/2001

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-6

  	
   

  	
  Skyline
  Ridge Nursing &

  Rehabilitation
  Center

  515
  Fairview Avenue

  Canon
  City, CO  81212

  	
   

  	
  2005

  	
   

  	
  $

  	
  4,104,100

  	
   

  	
  12/31/2001

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-7

  	
   

  	
  Springs
  Village Care Center

  110
  West Van Buren Street

  Colorado
  Springs, CO  80907

  	
   

  	
  2005

  	
   

  	
  $

  	
  4,799,252

  	
   

  	
  12/31/2001

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-8

  	
   

  	
  Willow
  Tree Care Center

  2050
  South Main Street

  Delta,
  CO  81416

  	
   

  	
  2005

  	
   

  	
  $

  	
  4,310,982

  	
   

  	
  12/31/2001

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-9

  	
   

  	
  Cedars
  Healthcare Center

  1599
  Ingalls Street

  Lakewood,
  CO  80214

  	
   

  	
  2005

  	
   

  	
  $

  	
  6,964,007

  	
   

  	
  12/31/2001

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-10

  	
   

  	
  Millcroft

  255
  Possum Park Road

  Newark,
  DE  19711

  	
   

  	
  2005

  	
   

  	
  $

  	
  11,410,121

  	
   

  	
  01/11/2002

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-11

  	
   

  	
  Forwood
  Manor

  1912
  Marsh Road

  Wilmington,
  DE  19810

  	
   

  	
  2005

  	
   

  	
  $

  	
  13,446,434

  	
   

  	
  01/11/2002

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-12

  	
   

  	
  Foulk
  Manor South

  407
  Foulk Road

  Wilmington,
  DE  19803

  	
   

  	
  2005

  	
   

  	
  $

  	
  4,430,251

  	
   

  	
  01/11/2002

  	
   

  	
  10

  	
  %

  

 

 

	
  Exhibit

  	
   

  	
  Property Address

  	
   

  	
  Base Gross

  Revenues

  (Calendar

  Year)

  	
   

  	
  Base Gross

  Revenues

  (Dollar Amount)

  	
   

  	
  Commencement

  Date

  	
   

  	
  Interest

  Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-13

  	
   

  	
  Shipley
  Manor

  2723
  Shipley Road

  Wilmington,
  DE  19810

  	
   

  	
  2005

  	
   

  	
  $

  	
  9,333,057

  	
   

  	
  01/11/2002

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-14

  	
   

  	
  Forum
  at Deer Creek

  3001
  Deer Creek

  Country
  Club Blvd.

  Deerfield
  Beach, FL  33442

  	
   

  	
  2005

  	
   

  	
  $

  	
  12,323,581

  	
   

  	
  01/11/2002

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-15

  	
   

  	
  Springwood
  Court

  12780
  Kenwood Lane

  Fort
  Myers, FL  33907

  	
   

  	
  2005

  	
   

  	
  $

  	
  2,577,612

  	
   

  	
  01/11/2002

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-16

  	
   

  	
  Fountainview

  111
  Executive Center Drive

  West
  Palm Beach, FL  33401

  	
   

  	
  2005

  	
   

  	
  $

  	
  7,920,202

  	
   

  	
  01/11/2002

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-17

  	
   

  	
  Morningside
  of Athens

  1291
  Cedar Shoals Drive

  Athens,
  GA  30605

  	
   

  	
  2006

  	
   

  	
  $

  	
  1,560,026

  	
   

  	
  11/19/2004

  	
   

  	
  9

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-18

  	
   

  	
  Marsh
  View Senior Living

  7410
  Skidaway Road

  Savannah,
  GA  31406

  	
   

  	
  2007

  	
   

  	
  $

  	
  2,108,378

  	
   

  	
  11/01/2006

  	
   

  	
  8.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-19

  	
   

  	
  Pacific
  Place

  20937
  Kane Avenue

  Pacific
  Junction, IA  51561

  	
   

  	
  2005

  	
   

  	
  $

  	
  848,447

  	
   

  	
  12/31/2001

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-20

  	
   

  	
  West
  Bridge Care &

  Rehabilitation

  1015
  West Summit Street

  Winterset, IA  50273

  	
   

  	
  2005

  	
   

  	
  $

  	
  3,157,928

  	
   

  	
  12/31/2001

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-21

  	
   

  	
  Meadowood
  Retirement Community

  2455
  Tamarack Trail

  Bloomington, IN  47408

  	
   

  	
  2009

  	
   

  	
  N/A

  	
   

  	
  11/01/2008

  	
   

  	
  8

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-22

  	
   

  	
  Woodhaven
  Care Center

  510
  West 7th Street

  Ellinwood,
  KS  67526

  	
   

  	
  2005

  	
   

  	
  $

  	
  2,704,674

  	
   

  	
  12/31/2001

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-23

  	
   

  	
  Lafayette
  at Country Place

  690
  Mason Headley Road

  Lexington,
  KY  40504

  	
   

  	
  2005

  	
   

  	
  $

  	
  4,928,052

  	
   

  	
  01/11/2002

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-24

  	
   

  	
  Lexington
  Country Place

  700
  Mason Headley Road

  Lexington,
  KY  40504

  	
   

  	
  2005

  	
   

  	
  $

  	
  8,893,947

  	
   

  	
  01/11/2002

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-25

  	
   

  	
  Braintree
  Rehabilitation

  Hospital

  250
  Pond Street

  Braintree,
  MA  02184

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  10/01/2006

  	
   

  	
  9

  	
  %

  

 

 

	
  Exhibit

  	
   

  	
  Property Address

  	
   

  	
  Base Gross

  Revenues

  (Calendar

  Year)

  	
   

  	
  Base Gross

  Revenues

  (Dollar Amount)

  	
   

  	
  Commencement

  Date

  	
   

  	
  Interest

  Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-26

  	
   

  	
  New
  England Rehabilitation

  Hospital

  2
  Rehabilitation Way

  Woburn,
  MA  01801

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  10/01/2006

  	
   

  	
  9

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-27

  	
   

  	
  HeartFields
  at Bowie

  7600
  Laurel Bowie Road

  Bowie,
  MD  20715

  	
   

  	
  2005

  	
   

  	
  $

  	
  2,436,102

  	
   

  	
  10/25/2002

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-28

  	
   

  	
  HeartFields
  at Frederick

  1820
  Latham Drive

  Frederick,
  MD  21701

  	
   

  	
  2005

  	
   

  	
  $

  	
  2,173,971

  	
   

  	
  10/25/2002

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-29

  	
   

  	
  Intentionally
  deleted.

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-30

  	
   

  	
  Intentionally
  deleted.

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-31

  	
   

  	
  Morys
  Haven

  1112
  15th Street

  Columbus,
  NE  68601

  	
   

  	
  2005

  	
   

  	
  $

  	
  2,440,714

  	
   

  	
  12/31/2001

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-32

  	
   

  	
  Intentionally
  deleted.

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-33

  	
   

  	
  Wedgewood
  Care Center

  800
  Stoeger Drive

  Grand
  Island, NE  68803

  	
   

  	
  2005

  	
   

  	
  $

  	
  4,000,565

  	
   

  	
  12/31/2001

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-34

  	
   

  	
  Intentionally
  deleted.

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-35

  	
   

  	
  Crestview
  Healthcare Center

  1100
  West First Street

  Milford,
  NE  68405

  	
   

  	
  2005

  	
   

  	
  $

  	
  2,284,407

  	
   

  	
  12/31/2001

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-36

  	
   

  	
  Utica
  Community Care Center

  1350
  Centennial Avenue

  Utica,
  NE  68456

  	
   

  	
  2005

  	
   

  	
  $

  	
  1,950,325

  	
   

  	
  12/31/2001

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-37

  	
   

  	
  Leisure
  Park

  1400
  Route 70

  Lakewood,
  NJ  08701

  	
   

  	
  2005

  	
   

  	
  $

  	
  14,273,446

  	
   

  	
  01/07/2002

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-38

  	
   

  	
  Franciscan
  Manor

  71
  Darlington Road

  Patterson
  Township, Beaver Falls, PA  15010

  	
   

  	
  2006

  	
   

  	
  $

  	
  4,151,818

  	
   

  	
  10/31/2005

  	
   

  	
  9

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-39

  	
   

  	
  Mount
  Vernon of Elizabeth

  145
  Broadlawn Drive

  Elizabeth,
  PA  15037

  	
   

  	
  2006

  	
   

  	
  $

  	
  2,332,574

  	
   

  	
  10/31/2005

  	
   

  	
  9

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-40

  	
   

  	
  Overlook
  Green

  5250
  Meadowgreen Drive

  Whitehall,
  PA  15236

  	
   

  	
  2006

  	
   

  	
  $

  	
  3,878,300

  	
   

  	
  10/31/2005

  	
   

  	
  9

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-41

  	
   

  	
  Myrtle
  Beach Manor

  9547
  Highway 17 North

  Myrtle
  Beach, SC  29572

  	
   

  	
  2005

  	
   

  	
  $

  	
  6,138,714

  	
   

  	
  01/11/2002

  	
   

  	
  10

  	
  %

  

 

 

	
  Exhibit

  	
   

  	
  Property Address

  	
   

  	
  Base Gross

  Revenues

  (Calendar

  Year)

  	
   

  	
  Base Gross

  Revenues

  (Dollar Amount)

  	
   

  	
  Commencement

  Date

  	
   

  	
  Interest

  Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-42

  	
   

  	
  Morningside
  of Anderson

  1304
  McLees Road

  Anderson,
  SC  29621

  	
   

  	
  2006

  	
   

  	
  $

  	
  1,381,775

  	
   

  	
  11/19/2004

  	
   

  	
  9

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-43

  	
   

  	
  Heritage
  Place at Boerne

  120
  Crosspoint Drive

  Boerne,
  TX  78006

  	
   

  	
  2009

  	
   

  	
  N/A

  	
   

  	
  02/07/2008

  	
   

  	
  8

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-44

  	
   

  	
  Forum
  at Park Lane

  7831
  Park Lane

  Dallas,
  TX  75225

  	
   

  	
  2005

  	
   

  	
  $

  	
  13,620,931

  	
   

  	
  01/11/2002

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-45

  	
   

  	
  Heritage
  Place at Fredericksburg

  96
  Frederick Road

  Fredericksburg,
  TX  78624

  	
   

  	
  2009

  	
   

  	
  N/A

  	
   

  	
  02/07/2008

  	
   

  	
  8

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-46

  	
   

  	
  Greentree
  Health &

  Rehabilitation
  Center

  70
  Greentree Road

  Clintonville,
  WI  54929

  	
   

  	
  2005

  	
   

  	
  $

  	
  3,038,761

  	
   

  	
  12/31/2001

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-47

  	
   

  	
  Pine
  Manor Health Care Center

  Village
  of Embarrass

  1625
  East Main Street

  Clintonville,
  WI  54929

  	
   

  	
  2005

  	
   

  	
  $

  	
  4,337,113

  	
   

  	
  12/31/2001

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-48

  	
   

  	
  ManorPointe
  - Oak Creek Independent Senior Apartments and

  Meadowmere
  - 

  Mitchell Manor - Oak Creek

  700
  East Stonegate Drive and 701 East Puetz Road

  Oak
  Creek, WI  53154

  	
   

  	
  2009

  	
   

  	
  N/A

  	
   

  	
  01/04/2008

  	
   

  	
  8

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-49

  	
   

  	
  River
  Hills West

  Healthcare
  Center

  321
  Riverside Drive

  Pewaukee,
  WI  53072

  	
   

  	
  2005

  	
   

  	
  $

  	
  9,211,765

  	
   

  	
  12/31/2001

  	
   

  	
  10

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-50

  	
   

  	
  The
  Virginia Health &

  Rehabilitation
  Center

  1451
  Cleveland Avenue

  Waukesha,
  WI  53186

  	
   

  	
  2005

  	
   

  	
  $

  	
  6,128,045

  	
   

  	
  12/31/2001

  	
   

  	
  10

  	
  %Exhibit 10.1

 

AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this
“Agreement”) is made and entered into this 27th day of October
2010, by and between Arctic Cat Inc. (the “Company”) and Claude J. Jordan
(“Executive”), and shall become effective January 1, 2011.

 

WHEREAS, Executive is currently President and Chief
Operating Officer of the Company and is a party to an employment agreement with
the Company, as amended, and the Company desires to promote and employ
Executive in the capacity of Chief Executive Officer of the Company effective
January 1, 2011, and Executive desires to accept such promotion and employment,
subject to the supervision of the Board of Directors of the Company (the “Board”)
and the terms and conditions set forth herein and the parties desire to amend
and restate Executive’s current amended employment agreement with this
Agreement.

 

NOW, THEREFORE, in consideration of the
mutual covenants contained herein, the sufficiency of which is hereby
acknowledged, the parties agree as follows:

 

ARTICLE I.

DEFINITIONS

 

1.1                                 “Arctic Cat Products” means any goods or services which Executive or
those under his direct or indirect supervision designed, developed, marketed,
promoted, sold, serviced, or provided on behalf of the Company during the last
two years in which Executive was employed by the Company.

 

1.2                                 “Change in
Control” has the same meaning as defined in that certain Change in Control
Agreement of even or substantially even date herewith (the “Change in Control
Agreement”), as such Change in Control Agreement may be amended from time to
time.

 

1.3                                 “Code” means
the Internal Revenue Code of 1986, as amended.

 

1.4                                 “Company” means
Arctic Cat Inc. and all of its subsidiary and affiliated entities and their
divisions which now exist or may exist in the future.

 

1.5                                 “Competitive
Products” means any product, product line or service (including any component
thereof or research to develop information useful in connection with a product
or service) that is being designed, developed, manufactured, marketed, or sold
by the Company, or with respect to which the Company has acquired Confidential
Information which it intends to use in the design, development, manufacture,
marketing, or sale of a product or service.

 

1.6                                 “Confidential Information” means any information or compilation of
information that Executive learns or develops during the course of Executive’s
employment by the Company that derives independent economic value from not
being generally known, or readily ascertainable by proper means, by other
persons who can obtain economic value from its disclosure or use.  Confidential Information includes, but is not
limited to, trade secrets and may relate to such matters as research and
development, engineering, drawings and specifications, strategic plans,
business methods, non-public financial information, proprietary information
pertaining to vendors and customers, product improvement efforts, manufacturing
processes, management systems, sales and marketing plans and information, contracts,
and pricing.

 

1.7                                 “Conflicting
Organization” means any person or entity (regardless of its legal form) which
is engaged in, or about to become engaged in, research or development,
production, marketing or selling a Competitive Product, including Executive if
he is engaged in business for himself.

 

1.8                                 “Customer”
means any person or entity (regardless of its legal form) with whom or with
which Executive or those under his direct or indirect supervision, had any
direct or indirect contact on behalf of the Company in connection with Arctic
Cat Products. Without limiting the generality of the foregoing, the term
Customer includes, but is not limited to, dealers, vendors, suppliers, and
sponsors.

 

1

 

1.9                                 “Disability”
has two different meanings in this Agreement. 
For purposes of benefits due under any Company-sponsored disability
insurance policy (whether short-term, long-term, or any applicable salary
continuation policy provided during any elimination period), the definition of
Disability shall conform to the definition provided in such policy.   For purposes of any payment made to
Executive in excess of the benefits due under any such Company-sponsored
disability insurance policy, the definition of Disability shall be at least as
restrictive as the applicable definition provided in Section 409A of the Code.

 

1.10                           “Invention” means all inventions, discoveries, ideas, processes,
writings, designs, developments, and improvements, whether or not protectible
under the applicable patent, trademark or copyright statutes, of Executive
while employed by the Company.

 

ARTICLE II.

EMPLOYMENT AND TERM

 

2.1                                 Employment.  Upon the terms and subject
to the conditions set forth in this Agreement, the Company hereby promotes and
employs Executive as Chief Executive Officer with such duties and
responsibilities as may be determined from time to time by the Board, and
Executive hereby accepts such promotion and employment.

 

2.2                                 Term.  Except as
otherwise provided in this Agreement, the term of this Agreement shall commence
on January 1, 2011, and shall continue until this Agreement is terminated by
either party pursuant to the terms hereof.

 

ARTICLE III.

COMPENSATION

 

3.1                                 Base Salary. 
As compensation for his services to the Company and as compensation for
his confidentiality, non-competition and non-solicitation agreement provided in
Article IV of this Agreement, Executive shall receive an annual base
salary in the amount of Five Hundred Thousand Dollars ($500,000) payable in
accordance with the Company’s regular payroll processes (the “Base Salary”).
Executive’s Base Salary shall be reviewed by the Board on an annual basis, and
the Board may (but shall not be obligated to) adjust Executive’s Base Salary by
an amount as it deems appropriate based on a review of certain benchmarking
information, including but not limited to, general industry as well as industry
specific and other peer company compensation data.  Executive’s Base Salary may be reduced by the
Company in its discretion during the term of this Agreement to the extent
consistent with reductions in the base salary for other executives similarly
situated.

 

3.2                                 Annual Incentive Awards.    In addition to the Base Salary, Executive shall be entitled
to participate in the Company’s annual incentive program offered to the Company’s
senior executives.   The initial target
incentive payout for Executive shall be fifty-five percent (55%) of his Base
Salary and the fiscal 2011 incentive payout to Executive will be prorated to
apply Executive’s current target to the first three quarters and 55% to the
fourth quarter.

 

3.3                                 Long-Term
Incentive Compensation.  Effective upon the commencement of the term
of this Agreement as set forth in Section 2.2, the Board approved grants to
Executive of stock options to purchase 5,300 shares of common stock of the
Company in accordance with the Company’s 2007 Omnibus Stock and Incentive
Plan.  The options granted to Executive
will vest in equal installments on the first, second and third anniversaries of
the grant date and will expire ten years from the grant date.  Additional stock options may be awarded
annually to Executive by the Board.

 

3.4                                 Benefits. 
Except as the Company may otherwise provide, Executive shall be
entitled to participate in any retirement savings plan, profit sharing plan,
life insurance, health insurance, dental insurance, disability insurance or any
other fringe benefit plan which the Company may from time to time make
available to its salaried senior executives to the extent that Executive’s age,
tenure, and title make him eligible to receive those benefits. In addition,
Executive will be entitled to four weeks paid vacation and access to the
Company’s products at the same or similar level as the Company’s other senior
executives.  Any of such benefits may be
modified or withdrawn by the

 

2

 

Company
in its discretion during the term of this Agreement to the extent the same are
withdrawn or modified or supplemented for other executives similarly situated.

 

3.5                                 Expenses. 
The Company shall reimburse Executive for all reasonable expenses
properly incurred by Executive in the discharge of his duties hereunder upon
production of evidence therefor.

 

ARTICLE IV.

DUTIES OF EXECUTIVE

 

4.1                                 Services; Duties.  Executive
shall have the general duties, responsibilities and authority of Chief
Executive Officer of the Company, subject to the power of the Board to expand
or limit such duties, responsibilities and authority.  Executive agrees to loyally perform the
duties assigned to Executive from time to time, and all duties associated
therewith, to the best of Executive’s abilities, to be familiar with the
Company’s policies as they exist from time to time which relate to Executive’s
duties, and to abide by the Company’s policies as they exist from time to time.

 

4.2                                 Confidentiality and Good Will.  Executive
acknowledges that the Company has provided or will provide Executive with
information concerning its business, products and customers and that the Company
entrusts Executive with business relationships, good will and Confidential
Information of great value to the Company. 
Executive assigns to the Company all good will which Executive has or
develops with Customers while employed by the Company.  Executive agrees that Executive shall treat
all information, business relationships, and good will entrusted to Executive
by the Company as a fiduciary, and Executive undertakes all of the obligations
of a fiduciary to maintain, protect, and continue to develop such information,
business relationships, and good will for the benefit of the Company.  All documents and tangible items (including,
but not limited to, email) provided to Executive by the Company or created by
Executive for use in connection with Executive’s employment are the property of
the Company and shall be held by Executive as a fiduciary on behalf of the
Company.  Upon termination of Executive’s
employment for any reason, Executive shall promptly and without the requirement
of a prior demand by the Company, return to the Company all such documents and
tangible items, together with all copies, recordings, abstracts, notes,
reproductions, or electronic versions of any kind made from or about the
documents and tangible items or the information they contain.  Executive agrees not to directly or
indirectly use or disclose any Confidential Information belonging to the
Company for the benefit of anyone other than the Company, either during or
after employment, for as long as the information remains Confidential
Information.

 

4.3                                 Non-Solicitation.  In recognition of the
importance to the Company of its personal relationships, during and for one
year following his termination of employment by the Company, for any reason,
Executive agrees that he will not directly or indirectly, on his own behalf or
on behalf of any other person, solicit: (i) any Customer with whom he had
contact during the two years preceding his termination of employment, for the
purpose of directly or indirectly (a) marketing, promoting, or encouraging the
use of a Competitive Product; (b) providing advice or assistance in connection
with the marketing, promotion or use of a Competitive Product; or (c)
attempting to interfere with, or preventing or diverting the sale or purchase
of products being designed, developed, sold or marketed by the Company; (ii)
the services of any person who is a Company employee or agent to terminate his
or her employment or agency with the Company; or (iii) any vendor or supplier
which provides an exclusive or unique service or product to the Company for the
purpose of obtaining similar products or services.

 

4.4                                 Non-Competition.  Executive
agrees that during the period of Executive’s employment with the Company and
for one year following the voluntary or involuntary termination of his
employment with the Company for any reason, Executive shall not, directly or
indirectly, on his own account or in the service of any other person, firm,
corporation or other entity, be employed by, or permit his name to be used by,
or engage in or carry on business with, or otherwise be associated in any way
with, a Conflicting Organization as a partner, shareholder, director, officer,
executive, principal, agent, associate, consultant, or in any other capacity.  This non-competition covenant is effective in
each of the markets in which the Company markets, designs, develops, promotes,
sells, services, or provides Company products (i) at any time during Executive’s
employment with the Company or (ii) at any time within one year following termination
of Executive’s employment that were under evaluation with Executive’s knowledge
at the time of Executive’s termination of employment.

 

3

 

4.5                                 Inventions.

 

(a)                                  Disclosure
and Assignment.  Executive agrees to promptly disclose in
writing to the Company complete information concerning each and every
Invention. Executive, to the extent that he has the legal right to do so,
hereby acknowledges that any and all Inventions are the exclusive property of the
Company and hereby assigns and agrees to assign to the Company any and all of
Executive’s right, title and interest in and to any and all Inventions. If an
Invention does not relate to the existing or reasonably foreseeable business
interests of the Company, the Company may, in its sole and unreviewable
discretion, release or license the Invention to Executive upon written request
by Executive.  No release or license
shall be valid unless in writing signed by an officer of the Company.

 

(b)                                 Future
Inventions.  As to any future Inventions made by
Executive which relate to the business, products or practices of the Company
and which are first conceived or reduced to practice during the term of this
Agreement, but which are claimed for any reason to belong to an entity or
person other than the Company, Executive agrees to promptly disclose the same
in writing to the Company and shall not disclose the same to others if the
Company, within 20 days thereafter, shall claim ownership of such
Inventions under the terms of this Agreement.

 

(c)                                  Limitation
on Sections 4.5(a) and (b).  Pursuant to
Minnesota Statute Section 181.78, the provisions of Sections 4.5(a) and
(b) shall not apply to any Invention meeting the following conditions:

 

(i)
such Invention was developed entirely on Executive’s own time;

 

(ii)
such Invention was made without the use of any Company equipment, supplies,
facility or trade secret information;

 

(iii)
such Invention does not relate (a) directly to the business of the
Company, or (b) to the Company’s actual or demonstrably anticipated
research or development; and

 

(iv)
such Invention does not result from any work performed by Executive for the
Company.

 

(d)                                 Assistance
of Executive.  Upon request and without further
compensation therefor, but at no expense to Executive, and whether during the
term of this Agreement or thereafter, Executive will do all lawful acts,
including, but not limited to, the execution of papers and lawful oaths and the
giving of testimony, that in the opinion of the Company, its successors and
assigns, may be necessary or desirable in obtaining, sustaining, reissuing,
extending and enforcing United States and foreign patents, including, but not
limited to, design patents, on any and all of such Inventions, and for
perfecting, affirming and recording the Company’s complete ownership and title
thereto, and to cooperate otherwise in all proceedings and matters relating
thereto.

 

(e)                               Records.  Executive
will keep complete, accurate and authentic accounts, notes, data and records of
all Inventions in the manner and form requested by the Company. Such accounts,
notes, data and records shall be the property of the Company, and, upon its
request, Executive will promptly surrender same to it or, if not previously
surrendered upon its request or otherwise, Executive will surrender the same,
and all copies thereof, to the Company upon the conclusion of his employment.

 

4.6                                 Understandings.  Executive
acknowledges and agrees that (a) the Company informed him, as part of the
offer of employment and prior to his accepting employment with the Company,
that a confidentiality, non-competition, and non-solicitation agreement would
be required as part of the terms and conditions of his employment; (b) he
has carefully considered the restrictions contained in this Agreement;
(c) the restrictions in this Agreement are reasonable and will not unduly
restrict him in securing other employment in the event of termination.

 

4.7                                 Remedies.
 Executive agrees and understands that any breach of any of the
covenants or agreements set forth in Article IV of this Agreement will
cause the Company irreparable harm for which there is no adequate remedy at
law, and, without limiting whatever other rights and remedies the Company may
have under this

 

4

 

Agreement,
Executive consents to the issuance of an injunction by any court of competent
jurisdiction in favor of the Company enjoining the breach of any of the
aforesaid covenants or agreements. If any or all of the aforesaid covenants or
agreements are held to be unenforceable because of the scope or duration of
such covenant or agreement, the parties agree that the court making such
determination shall have the power to reduce or modify the scope and/or
duration of such covenant to the extent that allows the maximum scope and/or
duration permitted by applicable law.

 

4.8                                 Survival.  The obligations of
this Article IV shall survive the expiration or termination of this
Agreement.

 

ARTICLE V.

TERMINATION

 

5.1                                 Termination for Cause.  Notwithstanding anything contained in this Agreement
to the contrary, the Company shall have the right to immediately terminate the
employment of Executive for “Cause” if Executive:

 

(a)                                  willfully or
materially breaches this Agreement or continually fails to perform the duties
that Executive is required to perform under the terms of this Agreement;

 

(b)                                 willfully
violates other reasonable and substantial rules governing Executive’s
performance, including, without limitation, prohibitions against unauthorized
use of drugs or alcohol without treatment;

 

(c)                                  violates or
willfully refuses to obey reasonable instructions of the Board, provided that such instructions are not in violation of this
Agreement;

 

(d)                                 willfully
engages in conduct that is demonstrably and materially injurious to the
Company, monetarily or otherwise;

 

(e)                                  in the
performance of Executive’s duties under this Agreement, engages in any act of
misconduct, including misconduct involving moral turpitude, which is injurious
to the Company; or

 

(f)                                    is convicted of
or pleads guilty to any criminal charge or indictment, the nature of which the
Company determines, in its sole discretion, has a detrimental impact on the
general reputation of the Company.

 

An
act or failure to act is considered “willful” if done or not done with an
absence of good faith and without a reasonable belief that the act or failure
to act was in the best interests of the Company. In the event of termination
for “Cause,” Executive shall not be entitled to any severance payments or any
other payments under this Agreement. Executive shall not be terminated for
Cause unless and until the Company shall have delivered to Executive a copy of
a resolution duly adopted by the Board at a meeting of the Board called and
held for such purpose (after reasonable notice to Executive and an opportunity
for Executive, together with Executive’s counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, Executive’s
conduct was Cause and specifying the particulars thereof in detail.

 

5.2                                 Termination
for Any Other Reason.  
Executive’s employment shall terminate on the occurrence of any one of the
following events:

 

(a)                                  the occurrence
of circumstances that make it impossible or impracticable for the business of the
Company to be continued;

 

(b)                                 Executive’s
death; or

 

(c)                                  Executive’s
Disability unless waived by the Company, where Disability has the meaning set
forth in any Company-sponsored disability insurance policy.

 

5

 

In
the event of termination of employment for any reason set forth in Section
5.2(b) or (c) above, no further compensation or benefits other than any
applicable insurance benefits paid in accordance with any Company-sponsored
insurance policy shall be paid to Executive. 
Any payment made to Executive in excess of those provided by any
Company-sponsored disability insurance policy shall be paid in accordance with
the requirements of and subject to the applicable definitions of Section 409A
of the Code.  Notwithstanding anything
contained in this Agreement to the contrary, the Company shall have the right
to terminate the employment of Executive for any reason, including reasons
other than those described in Sections 5.1 or 5.2.  In the event of termination by the Company
for any reason not constituting Cause or described in Section 5.2, and not in
connection with a Change in Control, Executive shall be entitled to the
severance payments described in Section 5.5. 
In the event of a Change in Control, the Change in Control Agreement
shall supersede this Agreement and any understanding between the parties with
respect to termination upon such Change in Control and any compensation paid to
Executive upon such termination.

 

5.3                                 Termination by Executive for Good Reason.  Notwithstanding
anything contained in this Agreement to the contrary, Executive shall have the
right to terminate his employment at any time for “Good Reason.” “Good Reason”
exists if any of the following events or conditions occurs:

 

(a)                                  a material
change in Executive’s title, position or responsibilities which represents a
substantial reduction of the title, position or responsibilities in effect
immediately prior to the change; the assignment to Executive of any duties or
responsibilities (other than due to a promotion) which are inconsistent with
such title, position or responsibilities; any removal of Executive from or
failure to reappoint or reelect Executive to any of such positions;

 

(b)                                 any material
breach by the Company of any provision of this Agreement;

 

(c)                                  any purported
termination of Executive’s employment which is not made pursuant to a Notice of
Termination satisfying the requirements Section 5.6 of this Agreement; or

 

(d)                                 the relocation
of the Company’s principal executive offices to a location more than 50 miles
from Minneapolis/St. Paul, Minnesota or the Company requiring Executive to be
based more than 50 miles from the Company’s principal executive offices except
for requiring travel on the Company’s business.

 

Prior
to any termination for “Good Reason,” Executive must give notice to the Company
of the existence of the condition for “Good Reason” and intent to terminate
employment within 90 days of the occurrence of the condition and the Company
shall not have eliminated the condition within 30 days thereafter.  In the event of termination of employment by
Executive for Good Reason, Executive shall be entitled to the severance
payments described in Section 5.5 of this Agreement subject to the
limitations contained in Section 5.5.

 

5.4                                 Termination
by Executive for Any Other Reason.  Executive shall have the right to terminate
his employment under this Agreement for any reason. In the event of termination
by Executive for any reason not constituting a termination for Good Reason, Executive
shall not be entitled to any severance payment or any other payments under this
Agreement.

 

5.5                                 Severance Payments.  In the
event of termination by the Company for any reason not constituting Cause or
described in Section 5.2, and not in connection with a Change in Control, or,
in the event that Executive terminates his employment for Good Reason, the
Company shall pay to Executive his Base Salary through such date of
termination, and, in lieu of any further compensation and benefits under this
Agreement, Executive shall be entitled to the following benefits during the
12-month period beginning on the date of such termination of Executive’s
employment (the “Severance Period”), subject to the limitations contained in
this Section 5.5.

 

(a)                                  Severance
Pay.  During the Severance Period,
the Company shall pay to Executive an amount equal to his average annual Base
Salary (exclusive of any bonuses, incentive compensation or income associated
with benefits, restricted stock, or stock options of Executive) over the three
year period immediately preceding the date of termination or such lesser period
as Executive has been employed by the Company; provided
that only the amount permitted by Section 409A of the Code, inclusive of
Section 401(a)(17) of the Code, shall be paid in equal portions over the course

 

6

 

of
the first six months of the Severance Period in accordance with the Company’s
regular payroll practices, and the balance shall be paid in equal portions over
the course of the remaining six months of the Severance Period in accordance
with the Company’s regular payroll practices.

 

(b)                                 Benefits
During Severance Period. 
During the Severance Period, the Company shall continue to pay benefits
provided to Executive (and to Executive’s dependents and beneficiaries) by the
Company immediately prior to the date of termination of employment; provided that if during the Severance Period another
employer provides Executive any benefits which are substantially comparable to
any of the benefits provided by the Company, the Company’s obligations with
respect to such comparable benefits shall cease.

 

(c)                                  Vesting
of Options.  In the event
Executive is entitled to the severance benefits and pay described in Section
5.5, all of Executive’s restricted stock and unexpired stock options granted
under this Agreement or pursuant to any future awards and held by Executive at
the time of his termination of employment shall immediately vest with the
options becoming immediately exercisable for one month, after which time the
options shall expire.

 

(d)                                 Conditions
to Severance Pay. 
Notwithstanding anything contained in this Agreement to the contrary,
Executive shall be entitled to the severance pay and benefits described in this
Section 5.5 only if
(i) on or within 30 days following Executive’s last date of
employment Executive signs and does not rescind a release agreement in a form
prepared by the Company, to include but not be limited to a comprehensive
release of all legal claims by Executive in favor of the Company,
(ii) Executive fully complies with his confidentiality obligations under
Section 4.2, (iii) Executive fully complies with his non-solicitation
obligations under Section 4.3, (iv) Executive fully complies with his
non-competition obligations under Section 4.4, and (v) Executive fully
complies with his disclosure and assignment obligations under Section 4.5.
Executive further understands and agrees that if he does not sign the required
release agreement, if he rescinds the required release agreement after signing,
or if he does not fully comply with the confidentiality, non-solicitation,
non-competition, and/or disclosure and assignment requirements set forth in
Sections 4.2, 4.3, 4.4, and 4.5, he will not be entitled to the severance pay
or benefits described in this Section 5.5 and will be obligated to return
any severance pay and/or benefits already received.

 

5.6                                 Notice of
Termination. Any purported termination
of Executive’s employment by the Company or by Executive shall be communicated
by a Notice of Termination sent to the other party in accordance with Section
6.1.  For purposes of this Agreement, a “Notice
of Termination” shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth a
summary of the facts and circumstances claimed to provide a basis for
termination of Executive’s employment. 
No purported termination of Executive’s employment which is not made
pursuant to a Notice of Termination shall be effective for purposes of this
Agreement.

 

5.7                                 Surviving
Rights.  Notwithstanding the
termination of Executive’s employment, the parties shall be required to carry
out any provisions which contemplate performance subsequent to such
termination; and such termination shall not affect any liability or other
obligation which shall have accrued prior to such termination, including, but
not limited to, any liability for loss or damage on account of a prior default.

 

7

 

ARTICLE VI.

GENERAL PROVISIONS

 

6.1                                 Notices.   For
the purpose of this Agreement, notices and all other communications provided
for shall be in writing and shall be deemed to have been duly given when
delivered or mailed by United States first class mail, postage pre-paid,
addressed to the last known residence address of Executive or in the case of
the Company, to its principal office to the attention of its then Chief
Financial Officer, with a copy to the Chairman of the Board, or if Executive holds
such position, to the Lead Director of the Board, or to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt.

 

6.2                                 Compliance with
Section 409A of the Code. If and to the extent that any provision of
this Agreement is required to comply with Section 409A of the Code, the Company
shall have the authority, without the consent of Executive to interpret and/or
amend such provision to maintain to the maximum extent practicable the original
intent of the applicable provision without violating the provisions of Code
409A.

 

6.3                                 No Conflicting Obligations.  Executive
represents and warrants to the Company that he is not under, or bound to be
under in the future, any obligation to any person, firm, or corporation that is
or would be inconsistent or in conflict with this Agreement or would prevent,
limit, or impair in any way the performance by him of his obligations
hereunder.

 

6.4                                 Waiver, Modification or Amendment.  No
waiver, modification or amendment of any term, condition or provision of this
Agreement shall be valid or of any effect unless made in writing, signed by the
party to be bound or its duly authorized representative and specifying with
particularity the nature and extent of such waiver, modification or amendment.
Any waiver by any party of any default of the other shall not affect or impair
any right arising from any subsequent default. Nothing herein shall limit the
rights and remedies of the parties under and pursuant to this Agreement, except
as set forth above.

 

6.5                                 Entire
Agreement.  This Agreement
contains the entire understanding of the parties in respect of the subject
matter hereof and supersedes all prior agreements and understandings between
the parties with respect to such subject matter, whether oral or written; provided that the parties acknowledge that they have also
entered into a Change in Control Agreement of even date herewith and that the
Change in Control Agreement shall supersede this Agreement and any
understanding between the parties with respect to termination upon a Change in
Control and any compensation paid to Executive upon such termination.  In all other respects, this Agreement shall
remain in full force and effect in the event of a Change in Control.

 

6.6                                 Interpretation.  The
provisions of this Agreement shall be applied and interpreted in a manner
consistent with each other so as to carry out the purposes and intent of the
parties, but if for any reason any provision of this Agreement is determined to
be unenforceable or invalid, such provision or such part thereof as may be
unenforceable or invalid shall be deemed severed from this Agreement and the
remaining provisions shall be carried out with the same force and effect as if
the severed provision or part thereof had not been a part of this Agreement.

 

6.7                                 Governing Law; Venue.  This
Agreement shall be construed and enforced in accordance with the laws of the
State of Minnesota.  Executive waives
Executive’s rights, if any, to have the laws, including conflict of laws
principles, of any jurisdiction other than the State of Minnesota apply to this
Agreement.  Any dispute arising out of or
related to Executive’s employment by the Company or arising out of or related
to this Agreement, or any breach or alleged breach hereof, shall be exclusively
decided by a state or federal court sitting in the State of Minnesota.  Executive hereby irrevocably consents to the
personal jurisdiction of the state and federal courts sitting in the State of
Minnesota for the purposes of any action arising out of or related to Executive’s
employment or this Agreement.  Executive
waives Executive’s right, if any, to have any disputes between Executive and
the Company arising out of or related to Executive’s employment or this
Agreement decided in any jurisdiction or venue other than a state or federal
court in the State of Minnesota. 
Executive agrees not to assist, aid, abet, encourage, or participate in
any lawsuit or action by any third party arising out of or related to Executive’s
employment or this Agreement in any jurisdiction or venue other than a state or
federal court in the State of Minnesota.

 

8

 

6.8                                 Severability.  In the event that any
provision of this Agreement is unenforceable under applicable law, that shall
not affect the validity or enforceability of the remaining provisions.  In the event that any provision of this
Agreement is unenforceable because it is overbroad, vague or otherwise, that
provision may be revised by a court sitting in the state of Minnesota to the
extent required by applicable law, and may be enforced as revised by the court.

 

6.9                                 Assignment.  Executive
acknowledges that Executive’s services are unique and personal. Accordingly,
Executive may not assign Executive’s rights or delegate Executive’s duties or
obligations under this Agreement. This Agreement shall inure to the benefit of
and be enforceable by the Company and any successor or permitted assignee, and
may be assigned by the Company to any purchaser of all or substantially all of
the Company’s business or assets (by merger, sale of assets, consolidation,
acquisition of stock or otherwise) without the consent of Executive, and may
otherwise be assigned by the Company only with Executive’s consent.

 

6.10                           Captions and Headings.  The
captions and section headings used in this Agreement are for convenience of
reference only, and shall not affect the construction or interpretation of this
Agreement or any of the provisions hereof.

 

9

 

IN WITNESS WHEREOF, the parties hereto have
executed this Agreement effective on the date set forth in Section 2.2 of this
Agreement.

 

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  ARCTIC
  CAT INC.

  
	
   

  	
  By:

  	
  /s/
  CHRISTOPHER A. TWOMEY

  
	
   

  	
  Name:
  Christopher A. Twomey

  
	
   

  	
  Its:
  Chairman and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  CLAUDE J. JORDAN

  
	
   

  	
   

  	
  Claude
  J. Jordan

  

 

10

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