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KADANT 8-K 2008 UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
______________________________________________________________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of
report (Date of earliest event reported): January 28, 2008
KADANT
INC.
(Exact
Name of Registrant as Specified in its Charter)
(978)
776-2000
Registrant's
telephone number, including area code
Not
Applicable
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
KADANT
INC.
Item
1.01 Entry into a Material Definitive Agreement.
On
January 28, 2008, Kadant Jining Light Machinery Co., Ltd. (“Kadant Jining”), a
wholly owned subsidiary of Kadant Inc. (“Kadant”), entered into a RMB40 million
term loan agreement (the “Agreement”) with JPMorgan Chase Bank (China) Company
Limited, Shanghai Branch (“JPMorgan Shanghai”). The Agreement permits Kadant
Jining to borrow up to 40 million RMB, or approximately $5.6 million at current
exchange rates, in two tranches equal to 24 million RMB and 16 million RMB.
Amounts borrowed under the first tranche must be repaid two years from the
date
of the Agreement, or January 28, 2010, and amounts borrowed under the second
tranche must be repaid three years from the date of the Agreement, or January
28, 2011. The term loan will bear interest at 95% of the applicable short-term
interest rate for an RMB loan of comparable term as published by The People’s
Bank of China. Proceeds from the term loan will be used to pay off Kadant
Jining’s existing loan with the Bank of China totaling 40 million
RMB.
The
Agreement contains informational and general covenants related to the business
of Kadant Jining, including provision of financial statements, compliance with
applicable law, and restrictions on indebtedness, mergers, acquisitions and
dispositions. In addition, the obligations of Kadant Jining may be accelerated
upon the occurrence of an event of default under the Agreement, which includes
customary events of default such as payment defaults, defaults in the
performance of covenants, misrepresentations, bankruptcy and insolvency related
defaults, change in control, and defaults under certain other indebtedness
of
Kadant Jining and Kadant.
The
term
loan provided by JPMorgan Shanghai is secured by a Guaranty of Kadant dated
July
30, 2007, as amended by an Amendment, Acknowledgement and Consent to Guaranty
dated as of January 28, 2008 in favor of JPMorgan Shanghai (as amended, the
“Guaranty”). The Guaranty secures the payment of all obligations under the
Agreements as well as certain other loans and facilities provided to Kadant
Jining and other Kadant subsidiaries in China, and provides a cross-default
to
Kadant’s existing Credit Agreement, dated as of May 9, 2005, as amended to date
(the “US Credit Agreement”), between Kadant, 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 and certain
successor agreements to the US Credit Agreement.
The
foregoing description of the transaction does not purport to be a complete
statement of the parties’ rights and obligations under the Agreement or the
Guaranty and is qualified in its entirety by reference to the full text of
the
Agreement, which is included as Exhibit 99 to this Current Report on Form 8-K,
and to the Guaranty, which will be filed as an exhibit to Kadant’s annual report
on Form 10-K for the fiscal year ended December 29, 2007.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
The
information set forth in Item 1.01
above with respect to the Agreement
and Guaranty is incorporated herein in its
entirety.
Item
9.01 Financial Statements and Exhibits.
(c)
Exhibits
2
KADANT
INC.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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