kaiform10q3q2007exh101.htm


    Exhibit
      10.1

                    

    
      
        
          	 


        

      

    

     

     

     

    FIRST
      AMENDMENT

     

    to

    


    ASSET
      PURCHASE AGREEMENT

    among

    KADANT
      COMPOSITES LLC,

    KADANT
      INC.,

    LDI
      COMPOSITES CO.

    and

    LIBERTY
      DIVERSIFIED INDUSTRIES, INC.

    dated
      as
      of

    October
      10, 2006

    


    


    



    
      
              

                   
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    FIRST
      AMENDMENT TO ASSET PURCHASE AGREEMENT

    


    This
      First Amendment to Asset Purchase Agreement is made and entered into as of
      October 10, 2006, among KADANT COMPOSITES LLC, a Delaware
      limited liability company (“Seller”), KADANT
      INC., a Delaware corporation (“Kadant”), LDI
      COMPOSITES CO., a Minnesota corporation (“Buyer”), and
LIBERTY DIVERSIFIED INDUSTRIES, INC., a Minnesota corporation,
      and parent corporation of Buyer (“Buyer
      Parent”).  Capitalized terms used herein and not otherwise
      defined shall have the meaning ascribed to them in the Agreement (defined
      below).

    


    WHEREAS,
      effective October 21, 2005, the parties entered into that certain Asset Purchase
      Agreement (the “Agreement”) pursuant to which Seller sold to
      Buyer all of the tangible and intangible assets of Seller other than the
      Excluded Assets (as defined therein), and Buyer purchased the same on the terms
      set forth therein.

    


    WHEREAS,
      the parties wish to amend certain of the provisions, covenants and obligations
      under the Agreement in accordance with the terms and conditions of this
      Amendment;

    


    NOW,
      THEREFORE, in consideration of the covenants and agreements
      hereinafter set forth, the parties hereto agree as follows:

    


    1.           Amendment
      to Section 10 of Agreement.  Section 10(a) of the Agreement is
      hereby to provide the following additional provision:

    


    “(iv)           During
      Buyer's Administration Period, warranty claimants were sent notices
      (the “Warranty Notices”) that their claims would be remedied (the
      remedy specified in the Warranty Notices being referred to as the
“Approved Warranty Claims”) but such Approved Warranty Claims were not remedied
      before the Warranty Fund was fully committed.  Seller agrees to honor and
      pay up to an additional amount of $1,500,000 (the “Additional Funds”) for
      Approved Warranty Claims as specified in the Warranty Notices.  At
      such time as the Additional Funds have been exhausted, Seller agrees to honor
      and pay for Warranty Claims in accordance with applicable warranty obligations
      as provided in section 10(a) (iii) of the Agreement.

    


    2.           Amendment
      to Section 12 of Agreement.  Section 12(f) of the Agreement shall
      be amended by replacing the second sentence thereof with the following: “No
      Indemnifying Party shall be liable for any Loss, to the extent that the
      aggregate of all such Losses for which Indemnified Parties have received
      indemnification exceed $8,914,000.”

    


    3.           Release.  In
      further consideration of the Seller’s obligation to pay Additional Funds, as set
      forth in Section 1 above, Buyer and Buyer Parent hereby release and forever
      discharge each of Seller and Kadant, their respective agents, employees,
      affiliated entities, directors, officers, successors and assigns of and from
      all
      demands, actions, causes of action, suits, damages and any and all claims,
      demands and liabilities whatsoever of every name and nature, both in law and
      in
      equity, which against the other, each now has or ever had and more especially
      on
      account of, from or relating to, Warranty Claims and  product problems
      related to premature degradation or crumbling of the product and excessive
      contraction of the product; provided, however, that this release
      shall not effect the obligation of Seller and Kadant to defend Buyer and Buyer
      Parent from any Third Party Claim related to Warranty Claims subject to the
      limitations set forth in Section 12(f) of the Agreement, as amended by this
      Amendment.

    


    4.           Survival
      of Remaining Provisions.  Except as set forth above all of the
      other terms, provisions and conditions set forth in the Agreement shall remain
      in full force and legal effect as if the terms of the Amendment had been
      originally included in the Agreement.


    
      
              

                  
      
      

                       
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF,
      this Amendment has been duly executed as of the day and year first above
      written.

     

    KADANT
      COMPOSITES LLC

    


    


    By:           Kadant
      GranTek Inc., its sole member

    
 

    


     
By: 
/s/
      Jonathan W.
      Painter___________

    Name:      Jonathan
      W. Painter

    Title:        Chairman

    


    


    KADANT
      INC.

    


    


    By:           /s/
      Sandra L. Lambert                                                                         

                   
      Name:      Sandra L. Lambert

    Title:         VP
      & General Counsel

    


    


    LDI
      COMPOSITES
      CO.

    


    


    By:           /s/
      Stephen Richardson            

                   Name:     
      Stephen Richardson

    Title:        
      VP & CFO

    


    


    LIBERTY
      DIVERSIFIED INDUSTRIES,
      INC.

    


    


    By:           /s/
      Stephen Richardson            

                   Name:     
      Stephen Richardson

    Title:       
       VP & CFO

    



    
      
              

                            Signature
            Page to First Amendment to Asset Purchase Agreement