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Exhibit 10.36
WAIVER AND RELEASE, dated as of October 23, 2006 (this "
Waiver and Release "), to (i) the Credit Agreement,
dated as of May 9, 2005 (as amended by the First Amendment to
Credit Agreement, dated as of October 21, 2005, the Second
Amendment to Credit Agreement, dated as of December 28, 2005,
and the Third Amendment to the Credit Agreement, dated as of
April 3, 2006, and as may be further amended, supplemented or
modified from time to time, the " Credit Agreement "), among
KADANT INC. (the " Borrower "), the Foreign Subsidiary
Borrowers from time to time parties thereto, the several Lenders
from time to time parties thereto and JPMORGAN CHASE BANK, N.A., as
Administrative Agent (the " Administrative Agent ") and
(ii) the Guarantee and Pledge Agreement, dated as of
May 9, 2005 (as amended, supplemented or modified from time to
time, the " Guarantee and Pledge Agreement "), made by the
Borrower and certain of its Subsidiaries in favor of the
Administrative Agent for the benefit of Lenders.
W I T N E S S E T H :
WHEREAS, the Borrower, certain Subsidiaries, the Required
Lenders and the Administrative Agent are parties to the Credit
Agreement, the Guarantee and Pledge Agreement and other Loan
Documents;
WHEREAS, the Borrower wishes to complete an internal
restructuring transaction, as described and detailed in the
outlined steps as attached as Exhibit A hereto (the "
Johnson Restructuring ");
WHEREAS, pursuant to the Guarantee and Collateral Agreement and
the other Loan Documents, the Grantors granted to the
Administrative Agent for the benefit of the Lenders security
interests in the Collateral listed in Exhibit B hereto as
collateral security for the Obligations (the " Security
Interests ");
WHEREAS, the Borrower has requested that (i) the Required
Lenders and the Administrative Agent waive any noncompliance by the
Borrower or any Subsidiary with the provisions of the Credit
Agreement and other Loan Documents to the extent that any steps or
portion of the Johnson Restructuring result in a breach of any
provisions of the Credit Agreement and (ii) the Required
Lenders and the Administrative Agent agree to release the Security
Interest;
WHEREAS, the Required Lenders and the Administrative Agent have
consented to the requested waivers and release on and subject to
the terms and conditions as set forth herein;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as
follows:
1. Defined Terms . Unless otherwise defined herein, terms
which are defined in the Credit Agreement and the Guarantee and
Pledge Agreement and used herein (and in the recitals hereto) as
defined terms are so used as so defined.
2. General Waiver . The Required Lenders and the
Administrative Agent hereby (i) agree and consent to the
Borrower and its Subsidiaries consummation of the Johnson
Restructuring and (ii) waive any non-compliance by the
Borrower or any of its Subsidiaries with
the provisions of the Credit Agreement and any
other Loan Document to the extent that any steps or portion of the
Johnson Restructuring result in a breach of any provisions of the
Credit Agreement or any Loan Document.
3. Release of Security Interest . (a) Subject to
paragraph (b), the Required Lenders and the Administrative Agent
confirms that the Security Interests may be released by the
Administrative Agent after receipt of a request from the
Borrower.
(b) In the event that the Johnson Restructuring is not fully
completed by December 31, 2007, the Borrower and each of the
Loan Parties shall be required to comply with Section 6.9 of
the Credit Agreement and Section 9.14 of the Guarantee and
Pledge Agreement with respect to any Domestic Subsidiary that has
acquired, owned or holds the Capital Stock of any "first tier"
foreign subsidiary on such date.
4. Further Assurances . The Required Lenders authorize
and direct the Administrative Agent to take any action as
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