FIRST AMENDMENT TO CREDIT AGREEMENT AND LIMITED CONSENT

This FIRST AMENDMENT TO CREDIT AGREEMENT AND LIMITED CONSENT (this "First Amendment"), dated as of November 1, 2013 and, made by and among KADANT INC., a Delaware corporation (the "Borrower"), the Foreign Subsidiary Borrowers parties hereto, the several banks and other financial institutions or entities parties hereto (the "Lenders"), RBS CITIZENS, N.A., as administrative agent (the "Administrative Agent") and RBS CITIZENS, N.A., as multicurrency administrative agent (the "Multicurrency Administrative Agent"; together with the Administrative Agent, the "Agents").

The Borrower, the Foreign Subsidiary Borrowers, the Agents and the Lenders, RBS Citizens, N.A., as Joint Lead Arranger and Joint Bookrunner, Wells Fargo Securities, LLC, as Joint Lead Arranger and Joint Bookrunner and Wells Fargo Bank, N.A., as Syndication Agent, entered into a Credit Agreement dated as of August 3, 2012 (the "Original Credit Agreement").

The Borrower has informed the Agents and the Lenders that it intends to acquire all of the Capital Stock of Carmanah Design and Manufacturing Inc. (the "Canadian Acquisition Target") through its wholly-owned subsidiary Kadant Canada Corp. ("Kadant Canada" and such transaction, the "Canadian Acquisition") which Canadian Acquisition shall be funded, in part, with Loans to be advanced under the Credit Agreement (such extension of credit by the Lenders, the "Canadian Acquisition Advance").

The Borrower has requested that the Agents and the Lenders (a) consent to certain amendments to the Original Credit Agreement including (x) the joinder of Kadant Canada as a Foreign Subsidiary Borrower and Canadian Dollars as a Foreign Currency under the Original Credit Agreement, (y) the extension of the maturity date, and (z) the deletion of the Capital Expenditures financial covenant, and (b) agree that the conditions to each extension of credit to a Foreign Subsidiary Borrower set forth in Sections 5.2 and 5.4 of the Credit Agreement shall be limited as set forth herein with respect to the Canadian Acquisition Advance.

Capitalized terms not defined herein shall have the meanings given such terms in the Original Credit Agreement.  The Original Credit Agreement, as amended by this First Amendment and as further amended, modified or supplemented from time to time, the "Credit Agreement".  This First Amendment constitutes a Loan Document for all purposes under the Credit Agreement and the other Loan Documents.

NOW, THEREFORE, in consideration of the promises and the agreements, provisions and covenants herein contained, the Borrower, the Foreign Subsidiary Borrowers, the Agents and the Lenders hereby agree as follows:

(A)            The representations and warranties referenced in Section 5.2(a) of the Credit Agreement shall be limited to (x) those representations and warranties set forth in Sections 4.3(a), 4.3(e), 4.4, 4.5, 4.11, 4.14, 4.19 and 4.21 of the Credit Agreement as those representations and warranties relate to the Borrower and Kadant Canada, and (y) (limited to the best of Kadant Canada's knowledge) those representations and warranties made by or with respect to the Canadian Acquisition Target in the acquisition agreement entered into in connection with the Canadian Acquisition as are material to the interests of the Lenders, but only to the extent Kadant Canada is entitled to terminate such acquisition agreement on the basis of such representations and warranties.

(B)            The Defaults and Events of Default referred to in Section 5.2(b) of the Credit Agreement shall be limited to those Events of Default set forth in Sections 8(a), 8(c) as it relates to a violation of Section 7.1 of the Credit Agreement, 8(f), 8(i) and 8(j) of the Credit Agreement.  Any Default or Event of Default not referenced in the previous sentence is referred to herein as a "Disregarded Default."

The parties hereto acknowledge and agree to the following in connection with the consent granted pursuant to this Section 1:

(i)            The Limited Funding Conditions apply solely to the Canadian Acquisition Funding to the extent consummated on or before December 31, 2013 and not to any other funding under the Credit Agreement.

(ii)            The Canadian Acquisition Funding shall also be subject to the following conditions: (x) the Canadian Acquisition shall constitute a "Permitted Acquisition" under (and as defined in) the Credit Agreement except that the occurrence of a Disregarded Default shall be disregarded for the purposes of determining compliance with clause (c) of the definition of "Permitted Acquisition," and (y) on the date of the Canadian Acquisition Funding, the Borrower shall (I) certify that no Default or Event of Default (based on the Borrower's knowledge with respect to the Canadian Acquisition Target) has occurred or is continuing both before and after giving effect to the Canadian Acquisition Funding and the Canadian Acquisition, or (II) certify that no Default or Event of Default other than a Disregarded Default has occurred or is continuing both before and after giving effect to the Canadian Acquisition Funding and the Canadian Acquisition and provide a list of all Disregarded Defaults (based on the Borrower's knowledge with respect to the Canadian Acquisition Target) that have occurred and are continuing as of such date.

(iii)            The Lenders' agreement to fund the Canadian Acquisition Advance subject to the Limited Funding Conditions is not intended (and should not be construed) as a waiver of any Disregarded Default existing at the time of such Canadian Acquisition Advance or of any of the Agents' or the Lenders' rights and remedies with respect thereto, all of which are hereby reserved and preserved in their entirety by the Agents and the Lenders.

The foregoing limited consent and limited waiver is limited to the Canadian Acquisition as set forth herein and is not a commitment or agreement to grant any consent or waiver in the future.

(A)            Section 1.1 of the Original Credit Agreement is hereby amended to delete the text in the definition of "Eurocurrency Base Rate" and to insert the following in lieu thereof:

"Eurocurrency Base Rate":  with respect to each day during each Interest Period pertaining to a Eurocurrency Loan, the rate per annum determined on the basis of the rate for deposits in Dollars or the relevant Foreign Currency, as the case may be, for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on a Reuters Screen LIBOR01 Page (or other relevant page) as of 11:00 A.M., London time, two Business Days prior to the beginning of such Interest Period (or in the case of a Eurocurrency Loan in Pounds Sterling, on the first day of such Interest Period); provided, that (a) in the event that such rate does not appear on the Reuters Screen LIBOR01 Page (or otherwise on such screen), the "Eurocurrency Base Rate" shall be determined by reference to such other comparable publicly available service for displaying eurocurrency rates as may be selected by the Administrative Agent or, in the absence of such availability, by reference to the rate at which the Administrative Agent is offered Dollars or the relevant Foreign Currency, as the case may be, deposits at or about 11:00 A.M., London time, two Business Days prior to the beginning of such Interest Period (or in the case of a Eurocurrency Loan in Pounds Sterling, on the first day of such Interest Period) in the interbank eurocurrency market where its eurocurrency, foreign currency and exchange operations are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein; (b) in the case of any Eurocurrency Loan denominated in Pounds Sterling and Euros, such rate shall be increased to provide for the Mandatory Costs as determined by the Administrative Agent in accordance with its normal practices; and (c) in the case of any Eurocurrency Loan denominated in Canadian Dollars, the "Eurocurrency Base Rate" shall be determined by reference to the CDOR Rate.

(B)            Section 1.1 of the Original Credit Agreement is hereby amended to delete the text in the definition of "Foreign Currency" and to insert the following in lieu thereof:

"Foreign Currency":  Pounds Sterling, Euros, Canadian Dollars and such other currency as consented to by the Multicurrency Administrative Agent, so long as such Currency is freely traded and convertible into Dollars in the London interbank market and a Dollar Equivalent thereof can be calculated.

(C)            Section 1.1 of the Original Credit Agreement is hereby amended to delete the text in the definition of "Foreign Subsidiary Borrowers" and to insert the following in lieu thereof:

"Foreign Subsidiary Borrowers":  each Foreign Subsidiary of the Borrower that becomes a party hereto as of the date hereof or hereafter; provided that, without the prior written consent of the Administrative Agent and each of the Lenders, the only Foreign Subsidiaries of the Borrower permitted to become parties hereto shall be Kadant U.K. Limited, Kadant Lamort S.A.S. Kadant Johnson Europe B.V and Kadant Canada Corp.

(D)            Section 1.1 of the Original Credit Agreement is hereby amended to delete the "." at the end of the definition of "Lenders" and to insert the following in lieu thereof: "and the Canadian Lending Branch of any Lender (subject to the definition of Canadian Lending Branch)."

(E)            Section 1.1 of the Original Credit Agreement is hereby amended to delete the text in the definition of "Revolving Termination Date" and to insert the following in lieu thereof:

"Revolving Termination Date":  November 1, 2018, unless sooner terminated in accordance with the terms hereof.

(F)            Section 1.1 of the Original Credit Agreement is hereby amended to add the following new definitions in the applicable alphabetical order.

"Canadian Dollars":  means the lawful currency of Canada.

"Canadian Lending Branch" means, with respect to any Lender, any office, branch, subsidiary or Affiliate of such Lender that is designated in writing by such Lender to the Administrative Agent and the Multicurrency Administrative Agent as being responsible for funding or maintaining the portion of the Revolving Commitment, Loans or other extensions of credit of such Lender hereunder to a Foreign Subsidiary Borrower domiciled in Canada which Canadian Lending Branch shall deliver a joinder to this Agreement in form and substance acceptable to the Agents and the Borrower; provided, that if any portion of a Revolving Commitment, Loan or other extension of credit hereunder is being provided by a Canadian Lending Branch of any Lender, then, except as specifically set forth in this Agreement, (i) such Lender and its Canadian Lending Branch shall constitute a single "Lender" and "Multicurrency Lender" under this Agreement and the other Loan Documents, (ii) the commitments of such Lender and its Canadian Lending Branch shall constitute a single "Revolving Commitment" and "Multicurrency Revolving Subcommitment" under this Agreement and the other Loan Documents and (iii) any consent given by such Lender with respect to any amendment, waiver or other modification of any term of this Agreement or any other Loan Document shall be deemed given on behalf of itself and the Canadian Lending Branch.

"CDOR Rate":  with respect to each day during each Interest Period pertaining to a Eurocurrency Loan denominated in Canadian Dollars, is a rate per annum equal to the average of the annual yield rates applicable to Canadian Dollar banker's acceptances at or about 10:00 a.m. (Toronto, Ontario time) two Business Days prior to the beginning of such Interest Period as reported on the "CDOR page" (or any display substituted therefor) of Reuters Monitor Money Rates Service (or such other page or commercially available source displaying Canadian interbank bid rates for Canadian Dollar bankers' acceptances as may be designed by the Multicurrency Administrative Agent from time to time) for a term equivalent to such Interest Period (or if such Interest Period is not equal to a number of months, for a term equivalent to the number of months closest to such Interest Period).

(G)            Section 2.12 (Computation of Interest and Fees) of the Original Credit Agreement is hereby amended by inserting the following clause (c) at the end thereof:

"(c)            For purposes of the Interest Act (Canada) and disclosure thereunder, whenever any interest or fee to be paid by a Foreign Subsidiary Borrower domiciled in Canada hereunder or under any other Loan Document is to be calculated on the basis of a 360-day year or any other period of time less than a calendar year, the yearly rate of interest or fees to which the rate used in such calculation is equivalent, is the rate so used (x) multiplied by the actual number of days in the applicable calendar year and (y) divided by 360 or such other period of time."

(H)            Section 2.16(a), (Taxes) of the Original Credit Agreement is hereby amended to delete the last sentence thereof and to insert the following in lieu thereof:

"If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") or Other Taxes are required to be withheld from any amounts payable to the Administrative Agent or any Lender hereunder, the amounts so payable to the Administrative Agent or such Lender shall be increased to the extent necessary to yield to the Administrative Agent or such Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement; provided that neither the Borrower nor any  Foreign Subsidiary Borrower shall be required to increase any such amounts payable to any Lender with respect to any Non-Excluded Taxes (i) that are attributable to such Lender's failure to comply with the requirements of paragraph (d), (e) or (g) of this Section, (ii) that are United States, French, Netherlands, United Kingdom, or Canadian federal or provincial withholding taxes imposed on amounts payable to such Lender at the time such Lender becomes a party to this Agreement, except to the extent that such Lender's assignor (if any) was entitled, at the time of assignment, to receive additional amounts from the Borrower or any Foreign Subsidiary Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph or (iii) United States federal withholding taxes imposed under FATCA."

(I)            Section 7.1(c) (Financial Condition Covenants, Capital Expenditures) of the Original Credit Agreement is hereby deleted.

(J)            Section 7.4 (Fundamental Changes) of the Original Credit Agreement is hereby amended by (x) deleting the "and" set forth at the end of clause (d) thereof, (y) deleting the "." set forth at the end of clause (e) thereof and replacing it with "; and" and (z) inserting the following clause (f) at the end thereof:

"(f) any Subsidiary of the Borrower that is organized under the laws of Canada may amalgamate with another Subsidiary of the Borrower that is organized under the laws of Canada; provided, that if one of the Subsidiaries participating in the applicable amalgamation is a Foreign Subsidiary Borrower, the entity formed as a result of such amalgamation ("Amalco") shall continue to be a Foreign Subsidiary Borrower and shall provide the Agents with such documentation, including legal opinions, as the Agents shall reasonably require to confirm that this Agreement and the other Loan Documents are enforceable against Amalco."

(K)            Schedule 1.1 (Commitments) of the Credit Agreement is hereby amended to delete the text thereof in its entirety and to insert the text of the Schedule 1.1 attached as Annex A hereof in place thereof.

The provisions of this First Amendment shall be effective as of the date on which all of the following conditions shall be satisfied:

5.            Miscellaneous.

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

KADANT INC., as the Borrower

By:            /s/Daniel J. Walsh_____________

Name:  Daniel J. Walsh

Title:    Treasurer

KADANT U.K. LIMITED, as a Foreign Subsidiary Borrower

By:            /s/Ronald A. Chambers____________

Name:  Ronald A. Chambers

Title:    Chairman

KADANT LAMORT SAS, as a Foreign Subsidiary Borrower

By:            /s/Alain Serres____________________

            Name:  Alain Serres

Title:    President

KADANT JOHNSON EUROPE B.V., as a Foreign Subsidiary Borrower

By:            /s/Fredrik H. Westerhout______________

Name:  Fredrik H. Westerhout

Title:    Managing Director

KADANT CANADA CORP., as a Foreign Subsidiary Borrower

By:            /s/Daniel J. Walsh______________

Name:  Daniel J. Walsh

Title:    Treasurer

RBS CITIZENS, N.A., as Administrative Agent

By:            /s/William E. Lingard_____________

Name:  William E. Lingard

Title:    Senior Vice President

RBS CITIZENS, N.A., as Multicurrency Administrative Agent

By:            /s/William E. Lingard_____________

Name:  William E. Lingard

Title:    Senior Vice President

RBS CITIZENS, N.A., as a Lender

By:            /s/William E. Lingard____________

Name:  William E. Lingard

Title:    Senior Vice President

WELLS FARGO BANK, N.A., as a Lender

By:            /s/Paul B. Forester__________________

Name:  Paul B. Forester

Title:    Senior Vice President

U.S. BANK, N.A., as a Lender

By:            /s/Kenneth R. Fieler______________

Name:  Kenneth R. Fieler

Title:    Vice President

U.S. BANK NATIONAL ASSOCIATION (CANADA BRANCH), as a Lender

By:            /s/Joseph Rauhala__________

HSBC France, as a French Party Lender

By:            /s/Philippe Abonneau____________

Name:  Philippe Abonneau

Title:    Head of Transaction

 Management Unit

HSBC Bank USA, National Association, as a Lender

By:            /s/KerryAnne O'Callaghan___________

Name:  KerryAnne O'Callaghan

Title:    Senior Assistant Vice President

SOVEREIGN BANK, N.A., as a Lender

By:            /s/Karen Ng_____________________

Name:  Karen Ng

Title:     Senior Vice President

ACKNOWLEDGED AND AGREED FOR PURPOSES OF SECTION 5(j):

KADANT INC., as a Guarantor

By:	/s/Daniel J. Walsh_____________________________

Name: Daniel J. Walsh

Title: Treasurer

KADANT BLACK CLAWSON INC., as a Subsidiary Guarantor

By:	/s/Daniel J. Walsh _____________________________

Name: Daniel J. Walsh

Title: Treasurer

KADANT JOHNSON CHINA – WX HOLDING INC., as a Subsidiary Guarantor

By:	/s/Daniel J. Walsh _____________________________

Name: Daniel J. Walsh

Title: Treasurer

KADANT INTERNATIONAL HOLDINGS INC., as a Subsidiary Guarantor

By:	/s/Daniel J. Walsh _____________________________

Name: Daniel J. Walsh

Title: Treasurer

KADANT JOHNSON INC., as a Subsidiary Guarantor

By:	/s/Daniel J. Walsh _____________________________

Name: Daniel J. Walsh

Title: Treasurer