Our Reference: CBD15932 Re: USD Amortizing Interest Rate Swap

Exhibit 10.35

14 February 2008

Kadant, Inc.

Dear Sirs,

Our Reference: CBD15932

Re: USD Amortizing Interest Rate Swap

The purpose of this document is to set forth the terms and conditions of the transaction entered into between RBS Citizens, N.A. and Kadant, Inc. on the Trade Date specified below (the “Transaction”). This document will constitute a “Confirmation” as referred to in, and supplements, forms part of and is subject to, the ISDA Master Agreement dated as of May 13, 2005 between RBS Citizens, N.A. (formerly, Citizens Bank of Massachusetts) and Kadant, Inc., as amended and supplemented from time to time, (the “Agreement”). All provisions contained in or incorporated by reference in the Agreement govern this Confirmation except as expressly modified below.

The definitions and provisions contained in the 2006 ISDA Definitions, as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. In the event of any inconsistency between those definitions and provisions and this Confirmation, this Confirmation will govern.

This Confirmation evidences a complete and binding agreement between you and us as to the terms of the Transaction to which this Confirmation relates. In the event of any inconsistency between the provisions of the Agreement and this Confirmation, this Confirmation will prevail for the purpose of this Transaction.

The terms of the particular Transaction to which this Confirmation relates are as follows:

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Optional Early Termination: So long as no Event of Default or Termination Event shall have occurred and then be continuing with respect to Kadant, Inc. the parties hereto agree that Kadant, Inc. may terminate this Transaction by at least one (1) Business Day prior notice to RBS Citizens, N.A. of its intention to do so, whereupon (a) the obligations of the parties to make any further payments under Section 2(a)(i) of the Agreement in respect of such transaction shall terminate, (b) the Calculation Agent shall determine a Settlement Amount in accordance with the provisions of the Agreement and provide a statement with respect thereto, and (c) a termination payment shall be made on the Early Termination Date as if such Transaction were a Terminated Transaction and Kadant, Inc. was the sole Affected Party.

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Bankruptcy: Section 5(a)(vii) is of the Agreement is hereby amended by replacing the words “30 days” wherever it appears with the words, “60 days.”

Specified Indebtedness: The definition of “Specified Indebtedness” in Section 14 of the Agreement will mean the indebtedness owing by Party B under that certain JPM Credit Agreement dated as of February 13, 2008 among Party B (as borrower) and the lenders (as set out therein).

Kadant, Inc. understands that the Transaction entered into under this Agreement does not constitute a deposit and is not insured by the Federal Deposit Insurance Corporation, Federal Reserve Board, Office of the Comptroller of the Currency or any state or federal banking agency.

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Each party represents to the other party on the Trade Date of this Transaction that (in the absence of a written agreement between the parties that expressly imposes affirmative obligations to the contrary for this Transaction):-

(a) Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into this Transaction and as to whether this Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying, and has not relied, on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into this Transaction; it being understood that information and explanations related to the terms and conditions of this Transaction shall not be considered investment advice or a recommendation to enter into this Transaction, no communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of this Transaction.

(b) Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of this Transaction. It is also capable of assuming, and assumes, the risks of this Transaction.

(c) Status of Parties. The other party is not acting as a fiduciary for or an adviser to it in respect of this Transaction.

This Confirmation is in final form and supersedes all previous Confirmations and communications in respect of this Transaction. No hard Copy will follow.

In the event that you disagree with any part of this Confirmation, please notify us via the contact details below, so that the discrepancy may be quickly resolved. All inquiries regarding confirmations, payments and/or rate re-settings should be sent to:

RBS Citizens, N.A.

One Citizens Plaza

Providence, RI 02903

Attn: Interest Rate Risk Management

Phone ###-###-#### or ###-###-####

Fax ###-###-####

We are pleased to have completed this Transaction and look forward to dealing with you again in the near future.

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Please confirm that the foregoing correctly sets forth the terms of our agreement by executing a copy of this Confirmation enclosed for that purpose and returning it to us via fax at the number listed above.

Notional Schedule—CBD15932

All dates are subject to adjustment in accordance with the Modified Following Business Day Convention.

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