Exhibit 10.1

 

 

 

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

DATED AS OF JULY 9, 2012

AMONG

PENFORD CORPORATION

THE GUARANTORS FROM TIME TO TIME PARTIES HERETO,

THE LENDERS FROM TIME TO TIME PARTIES HERETO,

BANK OF MONTREAL,

as Administrative Agent

AND

COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., “RABOBANK NEDERLAND,”

NEW YORK BRANCH,

as Syndication Agent

KEYBANK NATIONAL ASSOCIATION

and

JPMORGAN CHASE BANK N.A.

as Co-Documentation Agents

 

 

 

BMO CAPITAL MARKETS

and

COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., “RABOBANK NEDERLAND,”

NEW YORK BRANCH,

as Joint Lead Arrangers and Joint Book Runners

 

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TABLE OF CONTENTS

 

SECTION   HEADING    PAGE   SECTION 1.   THE CREDIT FACILITIES      1   

Section 1.1.

  Revolving Credit Commitments      1   

Section 1.2.

  Letters of Credit      2   

Section 1.3.

  Applicable Interest Rates      6   

Section 1.4.

  Minimum Borrowing Amounts; Maximum Eurodollar Loans      6   

Section 1.5.

  Manner of Borrowing Loans and Designating Applicable Interest Rates      7   

Section 1.6.

  Interest Periods      9   

Section 1.7.

  Maturity of Loans      9   

Section 1.8.

  Prepayments      9   

Section 1.9.

  Default Rate      11   

Section 1.10.

  The Notes      11   

Section 1.11.

  Funding Indemnity      12   

Section 1.12.

  Commitment Terminations      12   

Section 1.13.

  Substitution of Lenders      12   

Section 1.14.

  Swing Loans      13   

Section 1.15.

  Defaulting Lenders      15   

SECTION 2.

  FEES      15   

Section 2.1.

  Fees      15   

SECTION 3.

  PLACE AND APPLICATION OF PAYMENTS      16   

Section 3.1.

  Place and Application of Payments      16   

Section 3.2.

  Account Debit      18   

SECTION 4.

  GUARANTIES AND COLLATERAL      18   

Section 4.1.

  Guaranties      18   

Section 4.2.

  Collateral      18   

Section 4.3.

  Liens on Real Property      19   

Section 4.4.

  Further Assurances      19   

Section 4.5.

  Operating Accounts      20   

SECTION 5.

  DEFINITIONS; INTERPRETATION      20   

Section 5.1.

  Definitions      20   

Section 5.2.

  Interpretation      38   

Section 5.3.

  Change in Accounting Principles      38   

 

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SECTION 6.

  REPRESENTATIONS AND WARRANTIES      38   

Section 6.1.

  Organization and Qualification      38   

Section 6.2.

  Subsidiaries      39   

Section 6.3.

  Authority and Validity of Obligations      39   

Section 6.4.

  Use of Proceeds; Margin Stock      40   

Section 6.5.

  Financial Reports      40   

Section 6.6.

  No Material Adverse Change      40   

Section 6.7.

  Full Disclosure      40   

Section 6.8.

  Trademarks, Franchises, and Licenses      41   

Section 6.9.

  Governmental Authority and Licensing      41   

Section 6.10.

  Good Title      41   

Section 6.11.

  Litigation and Other Controversies      41   

Section 6.12.

  Taxes      41   

Section 6.13.

  Approvals      42   

Section 6.14.

  Affiliate Transactions      42   

Section 6.15.

  Investment Company      42   

Section 6.16.

  ERISA      42   

Section 6.17.

  Compliance with Laws      42   

Section 6.18.

  Other Agreements      44   

Section 6.19.

  Solvency      44   

Section 6.20.

  No Default      44   

Section 6.21.

  OFAC      44   

SECTION 7.

  CONDITIONS PRECEDENT      44   

Section 7.1.

  All Credit Events      44   

Section 7.2.

  Initial Credit Event      45   

SECTION 8.

  COVENANTS      48   

Section 8.1.

  Maintenance of Business      48   

Section 8.2.

  Maintenance of Properties      48   

Section 8.3.

  Taxes and Assessments      48   

Section 8.4.

  Insurance      49   

Section 8.5.

  Financial Reports      49   

Section 8.6.

  Inspection      51   

Section 8.7.

  Borrowings and Guaranties      52   

Section 8.8.

  Liens      52   

Section 8.9.

  Investments, Acquisitions, Loans and Advances      53   

Section 8.10.

  Mergers, Consolidations and Sales      55   

Section 8.11.

  Maintenance of Subsidiaries      55   

Section 8.12.

  Dividends and Certain Other Restricted Payments      56   

Section 8.13.

  ERISA      56   

Section 8.14.

  Compliance with Laws      56   

Section 8.15.

  Burdensome Contracts With Affiliates      58   

Section 8.16.

  No Changes in Fiscal Year      58   

Section 8.17.

  Formation of Subsidiaries      58   

 

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Section 8.18.

  Change in the Nature of Business      58   

Section 8.19.

  Use of Proceeds      58   

Section 8.20.

  No Restrictions      58   

Section 8.21.

  Subordinated Debt      59   

Section 8.22.

  Financial Covenants      59   

Section 8.23.

  Compliance with OFAC Sanctions Programs      59   

Section 8.24.

  Post-Closing Covenant      60   

SECTION 9.

  EVENTS OF DEFAULT AND REMEDIES      61   

Section 9.1.

  Events of Default      61   

Section 9.2.

  Non-Bankruptcy Defaults      62   

Section 9.3.

  Bankruptcy Defaults      63   

Section 9.4.

  Collateral for Undrawn Letters of Credit      63   

Section 9.5.

  Notice of Default      64   

Section 9.6.

  Expenses      64   

Section 9.7.

  Right to Cure      64   

SECTION 10.

  CHANGE IN CIRCUMSTANCES      65   

Section 10.1.

  Change of Law      65   

Section 10.2.

  Unavailability of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR
     65   

Section 10.3.

  Increased Cost and Reduced Return      66   

Section 10.4.

  Lending Offices      67   

Section 10.5.

  Discretion of Lender as to Manner of Funding      67   

SECTION 11.

  THE ADMINISTRATIVE AGENT      67   

Section 11.1.

  Appointment and Authorization of Administrative Agent      67   

Section 11.2.

  Administrative Agent and its Affiliates      68   

Section 11.3.

  Action by Administrative Agent      68   

Section 11.4.

  Consultation with Experts      68   

Section 11.5.

  Liability of Administrative Agent; Credit Decision      69   

Section 11.6.

  Indemnity      69   

Section 11.7.

  Resignation of Administrative Agent and Successor Administrative Agent      70
  

Section 11.8.

  L/C Issuer      70   

Section 11.9.

  Hedging Liability and Funds Transfer and Deposit Account Liability
Arrangements      70   

Section 11.10.

  Designation of Additional Agents      71   

Section 11.11.

  Authorization to Release or Subordinate or Limit Liens      71   

Section 11.12.

  Authorization to Enter into, and Enforcement of, the Collateral Documents     
71   

 

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SECTION 12.

  THE GUARANTEES      72   

Section 12.1.

  The Guarantees      72   

Section 12.2.

  Guarantee Unconditional      72   

Section 12.3.

  Discharge Only upon Payment in Full; Reinstatement in Certain Circumstances   
  73   

Section 12.4.

  Subrogation      73   

Section 12.5.

  Waivers      74   

Section 12.6.

  Limit on Recovery      74   

Section 12.7.

  Stay of Acceleration      74   

Section 12.8.

  Benefit to Guarantors      74   

Section 12.9.

  Guarantor Covenants      74   

SECTION 13.

  MISCELLANEOUS.      74   

Section 13.1.

  Withholding Taxes      74   

Section 13.2.

  No Waiver, Cumulative Remedies      76   

Section 13.3.

  Non-Business Days      76   

Section 13.4.

  Documentary Taxes      76   

Section 13.5.

  Survival of Representations      77   

Section 13.6.

  Survival of Indemnities      77   

Section 13.7.

  Sharing of Set-Off      77   

Section 13.8.

  Notices      77   

Section 13.9.

  Counterparts      78   

Section 13.10.

  Successors and Assigns      78   

Section 13.11.

  Participants      78   

Section 13.12.

  Assignments      79   

Section 13.13.

  Amendments      81   

Section 13.14.

  Headings      81   

Section 13.15.

  Costs and Expenses; Indemnification      81   

Section 13.16.

  Set-off      82   

Section 13.17.

  Entire Agreement      83   

Section 13.18.

  Governing Law      83   

Section 13.19.

  Severability of Provisions      83   

Section 13.20.

  Excess Interest      83   

Section 13.21.

  Construction      84   

Section 13.22.

  Lender’s Obligations Several      84   

Section 13.23.

  Submission to Jurisdiction; Waiver of Jury Trial      84   

Section 13.24.

  USA Patriot Act      84   

Section 13.25.

  Amendment and Restatement      85   

Section 13.26.

  Equalization of Loans and Commitments      85   

 

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EXHIBIT A

  —    Notice of Payment Request   

EXHIBIT B

  —    Notice of Borrowing   

EXHIBIT C

  —    Notice of Continuation/Conversion   

EXHIBIT D-1

  —    Revolving Note   

EXHIBIT D-2

  —    Swing Note   

EXHIBIT E

  —    Compliance Certificate   

EXHIBIT F

  —    Additional Guarantor Supplement   

EXHIBIT G

  —    Assignment and Acceptance   

EXHIBIT H

  —    Opinion of Counsel   

EXHIBIT I

  —    Commitment Amount Increase Request   

SCHEDULE 1

  —    Commitments   

SCHEDULE 6.2

  —    Subsidiaries   

 

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FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

This Fourth Amended and Restated Credit Agreement is entered into as of July 9,
2012, by and among Penford Corporation, a Washington corporation (the
“Borrower”), the direct and indirect Subsidiaries of the Borrower from time to
time party to this Agreement, as Guarantors, the several financial institutions
from time to time party to this Agreement, as Lenders, and Bank of Montreal, a
Canadian chartered bank acting through its Chicago branch, as Administrative
Agent as provided herein. All capitalized terms used herein without definition
shall have the same meanings herein as such terms are defined in Section 5.1
hereof.

PRELIMINARY STATEMENT

The Borrower, certain of the Lenders and the Administrative Agent are parties to
a Third Amended and Restated Credit Agreement dated as of April 7, 2010 (as
previously supplemented and amended, the “Original Credit Agreement”). The
Borrower has requested that the Lenders party to the Original Credit Agreement
make certain further amendments to the Original Credit Agreement and, for the
sake of convenience and clarity, to restate the Original Credit Agreement in its
entirety as so amended. Additionally, the Borrower has requested that certain
additional banks and financial institutions become party to this Agreement as
Lenders. Accordingly, upon satisfaction of the conditions precedent to
effectiveness contained in Section 7.2 hereof, the Original Credit Agreement and
all Exhibits and Schedules thereto shall be amended and as so amended shall be
restated in their entirety to read as follows:

SECTION 1.    THE CREDIT FACILITIES.

Section 1.1. Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Lender, by its acceptance hereof, severally agrees to
make a loan or loans (individually a “Revolving Loan” and collectively the
“Revolving Loans”) in U.S. Dollars to the Borrower from time to time on a
revolving basis up to the amount of such Lender’s Revolving Credit Commitment,
subject to any reductions thereof pursuant to the terms hereof, before the
Revolving Credit Termination Date. The sum of the aggregate principal amount of
all Revolving Loans, Swing Loans and L/C Obligations at any time outstanding
shall not exceed the Revolving Credit Commitments in effect at such time. Each
Borrowing of Revolving Loans shall be made ratably by the Lenders in proportion
to their respective Revolver Percentages. As provided in Section 1.5(a) hereof,
the Borrower may elect that each Borrowing of Revolving Loans be either Base
Rate Loans or Eurodollar Loans. Revolving Loans may be repaid and the principal
amount thereof reborrowed before the Revolving Credit Termination Date, subject
to the terms and conditions hereof.

(b) The Borrower may with the consent of the Administrative Agent, which consent
shall not be unreasonably withheld or delayed (but without the consent of any
Lender), on any Business Day prior to the Revolving Credit Termination Date,
increase the aggregate amount of the Revolving Credit Commitments by delivering
a Commitment Amount Increase Request substantially in the form attached hereto
as Exhibit I or in such other form acceptable to the Administrative Agent at
least five (5) Business Days prior to the desired effective date of such

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increase (the “Commitment Amount Increase”) identifying an additional Lender (or
additional Revolving Credit Commitments for existing Lender(s)) and the amount
of its Revolving Credit Commitment (or additional amount of its Revolving Credit
Commitment(s)); provided, however, that (i) any increase of the aggregate amount
of the Revolving Credit Commitments by an amount in excess of $30,000,000 will
require the approval of the Required Lenders, (ii) any increase of the aggregate
amount of the Revolving Credit Commitments shall be in an amount not less than
$5,000,000, (iii) no Default or Event of Default shall have occurred and be
continuing at the time of the request or the effective date of the Commitment
Amount Increase, and (iv) any new Lender providing a new commitment shall be
approved by the Administrative Agent (which approval shall not be unreasonably
withheld or delayed). The effective date of the Commitment Amount Increase shall
be agreed upon by the Borrower and the Administrative Agent. Upon the
effectiveness thereof, the new Lender(s) (or, if applicable, existing Lender(s))
shall advance Revolving Loans in an amount sufficient such that after giving
effect to its Loans each Lender shall have outstanding its Revolver Percentage
of Revolving Loans. It shall be a condition to such effectiveness that (i) if
any Eurodollar Loans are outstanding under the Revolving Credit on the date of
such effectiveness, such Eurodollar Loans shall be deemed to be prepaid on such
date and the Borrower shall pay any amounts owing to the Lenders pursuant to
Section 1.11 hereof and (ii) the Borrower shall not have terminated any portion
of the Revolving Credit Commitments pursuant to Section 1.12 hereof. The
Borrower agrees to pay any reasonable expenses of the Administrative Agent
relating to any Commitment Amount Increase. Promptly upon the effectiveness of
any Commitment Amount Increase, the Borrower shall execute and deliver new
Revolving Notes in the amount of any additional Lender’s Revolving Credit
Commitment (or in the amount of any existing Lender’s increased Revolving Credit
Commitment). Notwithstanding anything herein to the contrary, no Lender shall
have any obligation to increase its Revolving Credit Commitment and no Lender’s
Revolving Credit Commitment shall be increased without its consent thereto, and
each Lender may at its option, unconditionally and without cause, decline to
increase its Revolving Credit Commitment.

Section 1.2. Letters of Credit. (a) General Terms. Subject to the terms and
conditions hereof, as part of the Revolving Credit, the L/C Issuer shall issue
standby and commercial letters of credit (each a “Letter of Credit”) in U.S.
Dollars for the account of the Borrower or for the account of the Borrower and
one or more of its Subsidiaries in an aggregate undrawn face amount up to the
lesser of (i) the L/C Sublimit and (ii) the excess (if any) of the Revolving
Credit Commitments over the aggregate principal amount of all Revolving Loans,
Swing Loans and L/C Obligations then outstanding. Each Letter of Credit shall be
issued by the L/C Issuer, but each Lender shall be obligated to reimburse the
L/C Issuer for such Lender’s Revolver Percentage of the amount of each drawing
thereunder and, accordingly, each Letter of Credit shall constitute usage of the
Revolving Credit Commitment of each Lender pro rata in an amount equal to its
Revolver Percentage of the L/C Obligations then outstanding. Notwithstanding
anything in this Agreement to the contrary, upon the making of the initial
Revolving Loan under this Agreement, the Existing Letters of Credit shall be
deemed to be Letters of Credit issued under this Agreement for all purposes
whatsoever and each application pursuant to which an Existing Letter of Credit
was issued shall be deemed to be an Application for all purposes.

(b) Applications. At any time before the Revolving Credit Termination Date, the
L/C Issuer shall, at the request of the Borrower, issue one or more Letters of
Credit in U.S. Dollars, in

 

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a form satisfactory to the L/C Issuer, with expiration dates no later than the
earlier of 12 months from the date of issuance (or which are cancelable not
later than 12 months from the date of issuance and each renewal) or 30 days
prior to the Revolving Credit Termination Date unless the Borrower has provided
cash collateral for its obligations with respect to such Letter of Credit as
provided below, in an aggregate face amount as set forth above, upon the receipt
of an application duly executed by the Borrower and, if such Letter of Credit is
for the account of one of its Subsidiaries, such Subsidiary for the relevant
Letter of Credit in the form then customarily prescribed by the L/C Issuer for
the Letter of Credit requested (each an “Application”). Notwithstanding anything
contained in any Application to the contrary: (i) the Borrower shall pay fees in
connection with each Letter of Credit as set forth in Section 2.1 hereof, and
(ii) except as otherwise provided in Section 1.8 hereof, unless an Event of
Default has occurred and is continuing, the L/C Issuer will not call for the
funding by the Borrower of any amount under a Letter of Credit before being
presented with a drawing thereunder. The Borrower agrees that if on the date
that is 30 days prior to the Revolving Credit Termination Date any Letters of
Credit remain outstanding, the Borrower shall then deliver to the Administrative
Agent, without notice or demand, cash collateral in accordance with Section 9.4
hereof in an amount equal to 105% of the aggregate amount of each Letter of
Credit then outstanding. If the L/C Issuer issues any Letter of Credit with an
expiration date that is automatically extended unless the L/C Issuer gives
notice that the expiration date will not so extend beyond its then scheduled
expiration date, unless the Lenders instruct the L/C Issuer otherwise, the L/C
Issuer will give such notice of non-renewal before the time necessary to prevent
such automatic extension if before such required notice date: (i) the expiration
date of such Letter of Credit if so extended would be after the Revolving Credit
Termination Date, (ii) the Revolving Credit Commitments have been terminated, or
(iii) an Event of Default exists and the Administrative Agent, at the request or
with the consent of the Required Lenders, has given the L/C Issuer instructions
not to so permit the extension of the expiration date of such Letter of Credit.
The L/C Issuer agrees to issue amendments to the Letter(s) of Credit increasing
the amount, or extending the expiration date, thereof at the request of the
Borrower subject to the conditions of Section 7 hereof and the other terms of
this Section 1.2.

(c) The Reimbursement Obligations. Subject to Section 1.2(b) hereof, the
obligation of the Borrower to reimburse the L/C Issuer for all drawings under a
Letter of Credit (a “Reimbursement Obligation”) shall be governed by the
Application related to such Letter of Credit, except that reimbursement shall be
made by no later than 12:00 Noon (Chicago time) on the date when each drawing is
to be paid if the Borrower has been informed of such drawing by the L/C Issuer
on or before 9:00 a.m. (Chicago time) on the date when such drawing is to be
paid or, if notice of such drawing is given to the Borrower after 9:00 a.m.
(Chicago time) on the date when such drawing is to be paid, by the end of such
day, in immediately available funds at the Administrative Agent’s principal
office in Chicago, Illinois or such other office as the Administrative Agent may
designate in writing to the Borrower (who shall thereafter cause to be
distributed to the L/C Issuer such amount(s) in like funds). Unless the Borrower
has reimbursed the L/C Issuer 12:00 Noon (Chicago time) on the date a drawing is
paid, the Borrower shall be deemed to have requested a Borrowing of Base Rate
Loans in the amount paid by the L/C Issuer in connection with the relevant
drawing and the Administrative Agent shall promptly notify the Lenders of the
amount of such requested Borrowing and each Lender’s Revolver Percentage
thereof. Such Base Rate Loans shall only be made if all conditions precedent to
the Lender’s

 

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obligation to make the requested Loans are satisfied, other than the minimum
amount required by Section 1.4 hereof and the delivery of a Notice of Borrowing
as required by Section 1.5(a). Each Lender shall fund its Revolver Percentage of
the requested Base Rate Loans in the manner specified in Section 1.5(c) hereof.
If the Borrower does not make any such reimbursement payment on the date due and
the Participating Lenders fund their participations therein in the manner set
forth in Section 1.2(d) below, then all payments thereafter received by the
Administrative Agent in discharge of any of the relevant Reimbursement
Obligations shall be distributed in accordance with Section 1.2(d) below. All
unpaid Reimbursement Obligations that are not required to be paid on the date
the relevant drawing under a Letter of Credit is paid shall bear interest from
the date such drawing is honored at a rate per annum equal to the sum of the
Base Rate from time to time in effect plus the Applicable Margin, subject to
Section 1.9 hereof. The Reimbursement Obligations of the Borrower under this
Agreement shall be absolute, unconditional, and irrevocable, and shall be
performed strictly in accordance with the terms of the Loan Documents under all
circumstances whatsoever and the Borrower hereby waives any defense to the
payment of the Reimbursement Obligations based on any circumstance whatsoever,
including in any case, the following circumstances: (i) any lack of validity or
enforceability of any Letter of Credit or any other Loan Document; (ii) any
amendment or waiver of or any consent to departure from any Loan Document made
after the Closing Date; (iii) the existence of any claim, set-off, counterclaim,
defense, or other rights which the Borrower or any other Person may have at any
time against any beneficiary of any Letter of Credit, the Administrative Agent,
the L/C Issuer, any Lender, or any other Person, whether in connection with any
Loan Document or any unrelated transaction; (iv) any statement, draft, or other
documentation presented under any Letter of Credit proving to be forged,
fraudulent, invalid, or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect whatsoever; (v) payment by the L/C
Issuer under any Letter of Credit against presentation of a draft or other
document that does not comply with the terms of such Letter of Credit; or
(vi) any other circumstance whatsoever, whether or not similar to any of the
foregoing. None of the Administrative Agent, the Lenders, or the L/C Issuer
shall have any liability or responsibility by reason of or in connection with
the issuance or transfer of any Letter of Credit or any payment or failure to
make any payment thereunder (irrespective of any of the circumstances referred
to in the preceding sentence), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the L/C Issuer ;
provided that the foregoing shall not be construed to excuse the L/C Issuer from
liability to the Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the L/C Issuer ’s failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or willful misconduct on the part of the L/C Issuer (as
determined by a court of competent jurisdiction by final and nonappealable
judgment), the L/C Issuer shall be deemed to have exercised care in each such
determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the L/C Issuer may, in its sole discretion, either accept and
make payment upon such documents without

 

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responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

(d) The Participating Interests. Each Lender (other than the Lender acting as
L/C Issuer in issuing the relevant Letter of Credit), by its acceptance hereof,
severally agrees to purchase from the L/C Issuer, and the L/C Issuer hereby
agrees to sell to each such Lender (a “Participating Lender”), an undivided
percentage participating interest (a “Participating Interest”), to the extent of
its Revolver Percentage, in each Letter of Credit issued by, and each
Reimbursement Obligation owed to, the L/C Issuer. Upon any failure by the
Borrower to pay any Reimbursement Obligation at the time required on the date
the related drawing is to be paid, as set forth in Section 1.2(c) above, or if
the L/C Issuer is required at any time to return to the Borrower or to a
trustee, receiver, liquidator, custodian or other Person any portion of any
payment of any Reimbursement Obligation, each Participating Lender shall, not
later than the Business Day it receives a certificate in the form of Exhibit A
hereto from the L/C Issuer (with a copy to the Administrative Agent) to such
effect, if such certificate is received before 1:00 p.m. (Chicago time), or not
later than 1:00 p.m. (Chicago time) the following Business Day, if such
certificate is received after such time, pay to the Administrative Agent for the
account of the L/C Issuer an amount equal to such Participating Lender’s
Revolver Percentage of such unpaid or recaptured Reimbursement Obligation
together with interest on such amount accrued from the date the related payment
was made by the L/C Issuer to the date of such payment by such Participating
Lender at a rate per annum equal to: (i) from the date the related payment was
made by the L/C Issuer to the date 2 Business Days after payment by such
Participating Lender is due hereunder, the Federal Funds Rate for each such day
and (ii) from the date 2 Business Days after the date such payment is due from
such Participating Lender to the date such payment is made by such Participating
Lender, the Base Rate in effect for each such day. Each such Participating
Lender shall thereafter be entitled to receive its Revolver Percentage of each
payment received in respect of the relevant Reimbursement Obligation and of
interest paid thereon, with the L/C Issuer retaining its Revolver Percentage
thereof as a Lender hereunder. The several obligations of the Participating
Lenders to the L/C Issuer under this Section 1.2 shall be absolute, irrevocable,
and unconditional under any and all circumstances whatsoever and shall not be
subject to any set-off, counterclaim or defense to payment which any
Participating Lender may have or have had against the Borrower, the L/C Issuer,
the Administrative Agent, any Lender or any other Person whatsoever. Without
limiting the generality of the foregoing, such obligations shall not be affected
by any Default or Event of Default or by any reduction or termination of any
Commitment of any Lender, and each payment by a Participating Lender under this
Section 1.2 shall be made without any offset, abatement, withholding or
reduction whatsoever.

(e) Indemnification. The Participating Lenders shall, to the extent of their
respective Revolver Percentages, indemnify the L/C Issuer (to the extent not
reimbursed by the Borrower) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from the L/C Issuer’s gross negligence or willful
misconduct) that the L/C Issuer may suffer or incur in connection with any
Letter of Credit issued by it. The obligations of the Participating Lenders
under this Section 1.2(e) and all other parts of this Section 1.2 shall survive
termination of this Agreement and of all Applications, Letters of Credit, and
all drafts and other documents presented in connection with drawings thereunder.

 

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(f) Manner of Requesting a Letter of Credit. The Borrower shall provide at least
three (3) Business Days’ advance written notice to the Administrative Agent of
each request for the issuance of a Letter of Credit, such notice in each case to
be accompanied by an Application for such Letter of Credit properly completed
and executed by the Borrower and, in the case of an extension or an increase in
the amount of a Letter of Credit, a written request therefor, in a form
acceptable to the Administrative Agent and the L/C Issuer, in each case,
together with the fees called for by this Agreement. The Administrative Agent
shall promptly notify the L/C Issuer of the Administrative Agent’s receipt of
each such notice and the L/C Issuer shall promptly notify the Administrative
Agent and the Lenders of the issuance of the Letter of Credit so requested.

Section 1.3. Applicable Interest Rates. (a) Base Rate Loans. Each Base Rate Loan
made or maintained by a Lender shall bear interest during each Interest Period
it is outstanding (computed on the basis of a year of (i) 360 days and actual
days elapsed in the case of determinations of the Base Rate under clause (c) of
the definition thereof and (ii) 365 or 366 days, as the case may be, and the
actual days elapsed in all other cases) on the unpaid principal amount thereof
from the date such Loan is advanced or continued, or created by conversion from
a Eurodollar Loan, until maturity (whether by acceleration or otherwise) at a
rate per annum equal to the sum of the Applicable Margin plus the Base Rate from
time to time in effect, payable on the last day of its Interest Period and at
maturity (whether by acceleration or otherwise).

(b) Eurodollar Loans. Each Eurodollar Loan made or maintained by a Lender shall
bear interest during each Interest Period it is outstanding (computed on the
basis of a year of 360 days and actual days elapsed) on the unpaid principal
amount thereof from the date such Loan is advanced, continued or created by
conversion from a Base Rate Loan, until maturity (whether by acceleration or
otherwise) at a rate per annum equal to the sum of the Applicable Margin plus
the Adjusted LIBOR applicable for such Interest Period, payable on the last day
of the Interest Period and at maturity (whether by acceleration or otherwise),
and, if the applicable Interest Period is longer than three months, on each day
occurring every three months after the commencement of such Interest Period.

(c) Rate Determinations. The Administrative Agent shall determine each interest
rate applicable to the Loans and the Reimbursement Obligations hereunder, and
its determination thereof shall be conclusive and binding except in the case of
manifest error.

Section 1.4. Minimum Borrowing Amounts; Maximum Eurodollar Loans. Each Borrowing
of Base Rate Loans shall be in an amount not less than $250,000, or such greater
amount which is an integral multiple of $50,000. Each Borrowing of Eurodollar
Loans advanced, continued or converted shall be in an amount equal to $500,000
or such greater amount which is an integral multiple of $100,000. Without the
Administrative Agent’s consent, there shall not be more than 10 Borrowings of
Eurodollar Loans outstanding at any one time.

 

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Section 1.5. Manner of Borrowing Loans and Designating Applicable Interest
Rates. (a) Notice to the Administrative Agent. The Borrower shall give notice to
the Administrative Agent by no later than 1:00 p.m. (Chicago time): (i) at least
3 Business Days before the date on which the Borrower requests the Lenders to
advance a Borrowing of Eurodollar Loans, and (ii) on the date the Borrower
requests the Lenders to advance a Borrowing of Base Rate Loans. The Loans
included in each Borrowing shall bear interest initially at the type of rate
specified in such notice of a new Borrowing. Thereafter, the Borrower may from
time to time elect to change or continue the type of interest rate borne by each
Borrowing or, subject to Section 1.4’s minimum amount requirement for each
outstanding Borrowing, a portion thereof, as follows: (i) if such Borrowing is
of Eurodollar Loans, on the last day of the Interest Period applicable thereto,
the Borrower may continue part or all of such Borrowing as Eurodollar Loans or
convert part or all of such Borrowing into Base Rate Loans or (ii) if such
Borrowing is of Base Rate Loans, on any Business Day, the Borrower may convert
all or part of such Borrowing into Eurodollar Loans for an Interest Period or
Interest Periods specified by the Borrower. The Borrower shall give all such
notices requesting the advance, continuation or conversion of a Borrowing to the
Administrative Agent by telephone or telecopy (which notice shall be irrevocable
once given and, if by telephone, shall be promptly confirmed in writing),
substantially in the form attached hereto as Exhibit B (Notice of Borrowing) or
Exhibit C (Notice of Continuation/Conversion), as applicable, or in such other
form acceptable to the Administrative Agent. Notice of the continuation of a
Borrowing of Eurodollar Loans for an additional Interest Period or of the
conversion of part or all of a Borrowing of Base Rate Loans into Eurodollar
Loans must be given by no later than 1:00 p.m. (Chicago time) at least
3 Business Days before the date of the requested continuation or conversion. All
such notices concerning the advance, continuation or conversion of a Borrowing
shall specify the date of the requested advance, continuation or conversion of a
Borrowing (which shall be a Business Day), the amount of the requested Borrowing
to be advanced, continued or converted, the type of Loans to comprise such new,
continued or converted Borrowing and, if such Borrowing is to be comprised of
Eurodollar Loans, the Interest Period applicable thereto. The Borrower agrees
that the Administrative Agent may rely on any such telephonic or telecopy notice
given by any person the Administrative Agent in good faith believes is an
Authorized Representative without the necessity of independent investigation,
and in the event any such notice by telephone conflicts with any written
confirmation such telephonic notice shall govern if the Administrative Agent has
acted in reliance thereon.

(b) Notice to the Lenders. The Administrative Agent shall give prompt telephonic
or telecopy notice to each Lender of any notice from the Borrower received
pursuant to Section 1.5(a) above and, if such notice requests the Lenders to
make Eurodollar Loans, the Administrative Agent shall give notice to the
Borrower and each Lender by like means of the applicable currency and interest
rate applicable thereto promptly after the Administrative Agent has made such
determination. Each Lender shall, subject to Section 7 hereof, make its Loan in
accordance with Section 1.5 hereof.

(c) Borrower’s Failure to Notify; Automatic Continuations and Conversions. Any
outstanding Borrowing of Base Rate Loans shall automatically be continued for an
additional Interest Period on the last day of its then current Interest Period
unless the Borrower has notified the Administrative Agent within the period
required by Section 1.5(a) that the Borrower intends

 

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to convert such Borrowing, subject to Section 7.1 hereof, into a Borrowing of
Eurodollar Loans or such Borrowing is prepaid in accordance with Section 1.8(a).
If the Borrower fails to give notice pursuant to Section 1.5(a) above of the
continuation or conversion of any outstanding principal amount of a Borrowing of
Eurodollar Loans before the last day of its then current Interest Period within
the period required by Section 1.5(a) or, whether or not such notice has been
given, one or more of the conditions set forth in Section 7.1 for the
continuation or conversion of a Borrowing of Eurodollar Loans would not be
satisfied, and such Borrowing is not prepaid in accordance with Section 1.8(a),
such Borrowing shall automatically be converted into a Borrowing of Base Rate
Loans. In the event the Borrower fails to give notice pursuant to Section 1.5(a)
above of a Borrowing equal to the amount of a Reimbursement Obligation and has
not notified the Administrative Agent by 1:00 p.m. (Chicago time) on the day
such Reimbursement Obligation becomes due that it intends to repay such
Reimbursement Obligation through funds not borrowed under this Agreement, the
Borrower shall be deemed to have requested a Borrowing of Base Rate Loans under
the Revolving Credit (or, at the option of the Administrative Agent, under the
Swing Line) on such day in the amount of the Reimbursement Obligation then due,
which Borrowing shall be applied to pay the Reimbursement Obligation then due.

(d) Disbursement of Loans. Not later than 2:00 p.m. (Chicago time) on the date
of any requested advance of a new Borrowing, subject to Section 7 hereof, each
Lender shall make available its Loan comprising part of such Borrowing in funds
immediately available at the principal office of the Administrative Agent in
Chicago, Illinois. The Administrative Agent shall make the proceeds of each new
Borrowing available to the Borrower at the Administrative Agent’s principal
office in Chicago, Illinois, in the type of funds received by the Administrative
Agent from the Lenders.

(e) Administrative Agent Reliance on Lender Funding. Unless the Administrative
Agent shall have been notified by a Lender prior to (or, in the case of a
Borrowing of Base Rate Loans, by 2:00 p.m. (Chicago time) on) the date on which
such Lender is scheduled to make payment to the Administrative Agent of the
proceeds of a Loan (which notice shall be effective upon receipt) that such
Lender does not intend to make such payment, the Administrative Agent may assume
that such Lender has made such payment when due and the Administrative Agent may
in reliance upon such assumption (but shall not be required to) make available
to the Borrower the proceeds of the Loan to be made by such Lender and, if any
Lender has not in fact made such payment to the Administrative Agent, such
Lender shall, on demand, pay to the Administrative Agent the amount made
available to the Borrower attributable to such Lender together with interest
thereon in respect of each day during the period commencing on the date such
amount was made available to the Borrower and ending on (but excluding) the date
such Lender pays such amount to the Administrative Agent at a rate per annum
equal to: (i) from the date the related advance was made by the Administrative
Agent to the date 2 Business Days after payment by such Lender is due hereunder,
the Federal Funds Rate for each such day and (ii) from the date 2 Business Days
after the date such payment is due from such Lender to the date such payment is
made by such Lender, the Base Rate in effect for each such day. If such amount
is not received from such Lender by the Administrative Agent immediately upon
demand, the Borrower will, on demand, repay to the Administrative Agent the
proceeds of the Loan attributable to such Lender with interest thereon at a rate
per annum equal to the interest

 

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rate applicable to the relevant Loan, but without such payment being considered
a payment or prepayment of a Loan under Section 1.11 hereof so that the Borrower
will have no liability under such Section with respect to such payment.

Section 1.6. Interest Periods. As provided in Section 1.5(a) and 1.14 hereof, at
the time of each request to advance, continue or create by conversion a
Borrowing of Eurodollar Loans or Swing Loans, the Borrower shall select an
Interest Period applicable to such Loans from among the available options. The
term “Interest Period” means the period commencing on the date a Borrowing of
Loans is advanced, continued or created by conversion and ending: (a) in the
case of Base Rate Loans, on the last day of the calendar quarter (i.e., the last
day of March, June, September or December, as applicable) in which such
Borrowing is advanced, continued or created by conversion (or on the last day of
the following calendar quarter if such Loan is advanced, continued or created by
conversion on the last day of a calendar quarter), (b) in the case of a
Eurodollar Loan, 1, 2, 3 or 6 months thereafter, and (c) in the case of a Swing
Loan, on the date 1 to 5 days thereafter as mutually agreed to by the Borrower
and the Administrative Agent; provided, however, that:

(i) any Interest Period for a Borrowing of Revolving Loans or Swing Loans
consisting of Base Rate Loans that otherwise would end after the Revolving
Credit Termination Date shall end on the Revolving Credit Termination Date;

(ii) no Interest Period with respect to any portion of the Revolving Loans or
Swing Loans shall extend beyond the Revolving Credit Termination Date;

(iii) whenever the last day of any Interest Period would otherwise be a day that
is not a Business Day, the last day of such Interest Period shall be extended to
the next succeeding Business Day, provided that, if such extension would cause
the last day of an Interest Period for a Borrowing of Eurodollar Loans to occur
in the following calendar month, the last day of such Interest Period shall be
the immediately preceding Business Day; and

(iv) for purposes of determining an Interest Period for a Borrowing of
Eurodollar Loans, a month means a period starting on one day in a calendar month
and ending on the numerically corresponding day in the next calendar month;
provided, however, that if there is no numerically corresponding day in the
month in which such an Interest Period is to end or if such an Interest Period
begins on the last Business Day of a calendar month, then such Interest Period
shall end on the last Business Day of the calendar month in which such Interest
Period is to end.

Section 1.7. Maturity of Loans. Each Revolving Loan and Swing Loan, both for
principal and interest not sooner paid, shall mature and become due and payable
by the Borrower on the Revolving Credit Termination Date.

Section 1.8. Prepayments. (a) Optional. The Borrower shall have the privilege of
prepaying without premium or penalty (except as set forth in Section 1.11
hereof) and in whole or in part (but, if in part, then: (i) if such Borrowing is
of Base Rate Loans, in an amount not less

 

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than $250,000, (ii) if such Borrowing is of Eurodollar Loans, in an amount not
less than $500,000 or any greater amount that is an integral multiple of
$100,000, and (iii) in each case, in an amount such that the minimum amount
required for a Borrowing pursuant to Sections 1.4 and 1.14 hereof remains
outstanding) any Borrowing of Eurodollar Loans at any time upon three
(3) Business Days’ prior notice to the Administrative Agent by the Borrower or,
in the case of a Borrowing of Base Rate Loans, notice delivered to the
Administrative Agent by the Borrower no later than 1:00 p.m. (Chicago time) on
the date of such prepayment. Each such prepayment shall be made by the payment
of the principal amount to be prepaid and, in the case of any Eurodollar Loans
or Swing Loans, accrued interest thereon to the date fixed for prepayment plus
any amounts due the Lenders under Section 1.11 and shall be subject to
Section 1.8(d).

(b) Mandatory. (i) The Borrower covenants and agrees that if at any time the
aggregate principal amount of all outstanding Revolving Loans, Swing Loans and
L/C Obligations exceeds the Revolving Credit Commitments then in effect, the
Borrower shall immediately and without notice or demand pay over the amount of
the excess to the Administrative Agent for the ratable benefit of the Lenders as
and for a mandatory prepayment on the Revolving Notes, Swing Note and L/C
Obligations until payment in full thereof. Each such prepayment shall be
accompanied by accrued interest on the amount prepaid to the date of prepayment
plus any amounts due to the Lenders under Section 1.11 hereof and shall be
subject to Section 1.8(d).

(ii) The Borrower shall, on each date the Revolving Credit Commitments are
reduced pursuant to Section 1.12 hereof, prepay the Revolving Loans, Swing
Loans, and, if necessary, prefund the L/C Obligations by the amount, if any,
necessary to reduce the sum of the aggregate principal amount of all Revolving
Loans, Swing Loans and L/C Obligations then outstanding to the amount to which
the Revolving Credit Commitments have been so reduced. Each such prepayment
shall be subject to Section 1.8(d).

(c) The Administrative Agent will promptly advise each Lender of any notice of
prepayment it receives from the Borrower. Any amount of Revolving Loans and
Swing Loans paid or prepaid before the Revolving Credit Termination Date may,
subject to the terms and conditions of this Agreement, be borrowed, repaid and
borrowed again.

(d) Unless the Borrower otherwise directs, prepayments of Loans under
Section 1.8(b) shall be applied first to Borrowings of Base Rate Loans until
payment in full thereof with any balance applied to Borrowings of Eurodollar
Loans in the order in which their Interest Periods expire. Each prepayment of
Loans under Section 1.8(b) shall be made by the payment of the principal amount
to be prepaid and, in the case of Eurodollar Loans or Swing Loans, accrued
interest thereon to the date of prepayment together with any amounts due the
Lenders under Section 1.11 hereof. Each prefunding of L/C Obligations shall be
made in accordance with Section 9.4 hereof.

 

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Section 1.9. Default Rate. Notwithstanding anything to the contrary contained in
Section 1.3 hereof, while any Event of Default exists or after acceleration, the
Borrower shall pay interest (after as well as before entry of judgment thereon
to the extent permitted by law) on the principal amount of all Loans and
Reimbursement Obligations, and letter of credit fees at a rate per annum equal
to:

(a) for any Base Rate Loan or any Swing Loan bearing interest based on the Base
Rate, the sum of 2.0% plus the Applicable Margin plus the Base Rate from time to
time in effect;

(b) for any Eurodollar Loan or any Swing Loan bearing interest at the
Administrative Agent’s Quoted Rate, the sum of 2.0% plus the rate of interest in
effect thereon at the time of such default until the end of the Interest Period
applicable thereto and, thereafter, at a rate per annum equal to the sum of 2.0%
plus the Applicable Margin for Base Rate Loans plus the Base Rate from time to
time in effect; and

(c) for any Reimbursement Obligation, the sum of 2.0% plus the Applicable Margin
plus the Base Rate from time to time in effect;

provided, however, that in the absence of acceleration, any adjustments pursuant
to this Section shall be made at the election of the Administrative Agent,
acting at the request or with the consent of the Required Lenders, with written
notice to the Borrower. While any Event of Default exists or after acceleration,
interest shall be paid on demand of the Administrative Agent at the request or
with the consent of the Required Lenders.

Section 1.10. The Notes. (a) The Revolving Loans made to the Borrower by a
Lender shall be evidenced by a single promissory note of the Borrower issued to
such Lender in the form of Exhibit D-1 hereto. Each such promissory note is
hereinafter referred to as a “Revolving Note” and collectively such promissory
notes are referred to as the “Revolving Notes.”

(b) The Swing Loans made to the Borrower by the Administrative Agent shall be
evidenced by a single promissory note of the Borrower issued to the
Administrative Agent in the form of Exhibit D-2 hereto. Such promissory note is
hereinafter referred to as the “Swing Note.”

(c) Each Lender shall record on its books and records or on a schedule to its
appropriate Note the amount of each Loan advanced, continued or converted by it,
all payments of principal and interest and the principal balance from time to
time outstanding thereon, the type of such Loan, and, for any Eurodollar Loan or
Swing Loan, the Interest Period, the currency in which such Loan is denominated,
and the interest rate applicable thereto. The record thereof, whether shown on
such books and records of a Lender or on a schedule to the relevant Note, shall
be prima facie evidence as to all such matters; provided, however, that the
failure of any Lender to record any of the foregoing or any error in any such
record shall not limit or otherwise affect the obligation of the Borrower to
repay all Loans made to it hereunder together with accrued interest thereon. At
the request of any Lender and upon such Lender tendering to the Borrower the
appropriate Note to be replaced, the Borrower shall furnish a new Note to such
Lender to replace any outstanding Note, and at such time the first notation
appearing on a schedule on the reverse side of, or attached to, such Note shall
set forth the aggregate unpaid principal amount of all Loans, if any, then
outstanding thereon.

 

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Section 1.11. Funding Indemnity. If any Lender shall incur any loss, cost or
expense (including, without limitation, any loss of profit, and any loss, cost
or expense incurred by reason of the liquidation or re-employment of deposits or
other funds acquired by such Lender to fund or maintain any Eurodollar Loan or
Swing Loan or the relending or reinvesting of such deposits or amounts paid or
prepaid to such Lender) as a result of:

(a) any payment, prepayment or conversion of a Eurodollar Loan on a date other
than the last day of its Interest Period, including without limitation as a
result of a reallocation of Revolving Loans pursuant to Section 1.1(b) hereof,

(b) any failure (because of a failure to meet the conditions of Section 7 or
otherwise) by the Borrower to borrow or continue a Eurodollar Loan or Swing
Loan, or to convert a Base Rate Loan into a Eurodollar Loan or Swing Loan on the
date specified in a notice given pursuant to Section 1.5(a) or 1.14 hereof,

(c) any failure by the Borrower to make any payment of principal on any
Eurodollar Loan or Swing Loan when due (whether by acceleration or otherwise),
or

(d) any acceleration of the maturity of a Eurodollar Loan or Swing Loan as a
result of the occurrence of any Event of Default hereunder,

then, upon the demand of such Lender, the Borrower shall pay to such Lender such
amount as will reimburse such Lender for such loss, cost or expense. If any
Lender makes such a claim for compensation, it shall provide to the Borrower,
with a copy to the Administrative Agent, a certificate setting forth the amount
of such loss, cost or expense in reasonable detail (including an explanation of
the basis for and the computation of such loss, cost or expense) and the amounts
shown on such certificate shall be conclusive if reasonably determined.

Section 1.12. Commitment Terminations. (a) Optional Revolving Credit
Terminations. The Borrower shall have the right at any time and from time to
time, upon five (5) Business Days’ prior written notice to the Administrative
Agent (or such shorter time period agreed to by the Administrative Agent), to
terminate the Revolving Credit Commitments without premium or penalty and in
whole or in part, any partial termination to be (i) in an amount not less than
$1,000,000 or a whole multiple thereof, and (ii) allocated ratably among the
Lenders in proportion to their respective Revolver Percentages, provided that
the Revolving Credit Commitments may not be reduced to an amount less than the
sum of the aggregate principal amount of all Revolving Loans, Swing Loans, and
L/C Obligations then outstanding. Any termination of the Revolving Credit
Commitments below the L/C Sublimit or Swing Line Sublimit then in effect shall
reduce the L/C Sublimit and Swing Line Sublimit, as applicable, to an amount
equal to the Revolving Credit Commitments. The Administrative Agent shall give
prompt notice to each Lender of any such termination of the Revolving Credit
Commitments.

(b) No Reinstatement. Any termination of the Revolving Credit Commitments
pursuant to this Section 1.12 may not be reinstated.

Section 1.13. Substitution of Lenders. Upon the receipt by the Borrower of (a) a
claim from any Lender for compensation under Section 10.3 or 13.1 hereof,
(b) notice by any Lender to the Borrower of any illegality pursuant to
Section 10.1 hereof or (c) any Lender is then a Defaulting Lender or such Lender
is a Subsidiary of a Person who has been deemed insolvent or

 

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becomes the subject of a bankruptcy or insolvency proceeding or a receiver or
conservator has been appointed for any such person, (any such Lender referred to
in clause (a), (b) or (c) above being hereinafter referred to as an “Affected
Lender”), the Borrower may, in addition to any other rights the Borrower may
have hereunder or under applicable law, require, at its expense, any such
Affected Lender to assign, at par plus accrued interest and fees, without
recourse, all of its interest, rights, and obligations hereunder (including all
of its Commitments and the Loans and participation interests in Letters of
Credit and other amounts at any time owing to it hereunder and the other Loan
Documents) to a bank or other institutional Lender specified by the Borrower,
provided that (i) such assignment shall not conflict with or violate any law,
rule or regulation or order of any court or other governmental authority,
(ii) the Borrower shall have received the written consent of the Administrative
Agent, which consent shall not be unreasonably withheld, to such assignment,
(iii) the Borrower shall have paid to the Affected Lender all monies (together
with amounts due such Affected Lender under Section 1.11 hereof as if the Loans
owing to it were prepaid rather than assigned) owed hereunder other than such
principal, interest, and fees accrued and owing to it hereunder, and (iv) the
assignment is entered into in accordance with the other requirements of
Section 13.12 hereof.

Section 1.14. Swing Loans. (a) Generally. Subject to the terms and conditions
hereof, as part of the Revolving Credit, the Administrative Agent agrees to make
loans in U.S. Dollars to the Borrower under the Swing Line (individually a
“Swing Loan” and collectively the “Swing Loans”) which shall not in the
aggregate at any time outstanding exceed the Swing Line Sublimit. The Swing
Loans may be availed of the Borrower from time to time and Borrowings thereunder
may be repaid and used again during the period ending on the Revolving Credit
Termination Date; provided that each Swing Loan must be repaid on the last day
of the Interest Period applicable thereto and on the Revolving Credit
Termination Date. Each Swing Loan shall be in a minimum amount of $100,000 or
such greater amount which is an integral multiple of $50,000.

(b) Interest on Swing Loans. Each Swing Loan shall bear interest until maturity
(whether by acceleration or otherwise) at a rate per annum equal to (i) the sum
of the Base Rate plus the Applicable Margin for Base Rate Loans under the
Revolving Credit as from time to time in effect (computed on the basis of a year
of 365 or 366 days, as the case may be, for the actual number of days elapsed)
or (ii) the Administrative Agent’s Quoted Rate (computed on the basis of a year
of 360 days for the actual number of days elapsed). Interest on each Swing Loan
shall be due and payable prior to such maturity on the last day of each Interest
Period applicable thereto and on the Revolving Credit Termination Date.

(c) Requests for Swing Loans. The Borrower shall give the Administrative Agent
prior notice (which may be written or oral) no later than (x) 12:00 Noon
(Chicago time) on the date upon which the Borrower requests that any Swing Loan
be made at the Administrative Agent’s Quoted Rate and (y) 3:00 p.m. (Chicago
time) on the date upon which the Borrower requests that any Swing Loan be at the
Base Rate, of the amount and date of such Swing Loan, and the Interest Period
requested therefor. Within 30 minutes after receiving such notice, the
Administrative Agent shall in its discretion quote an interest rate to the
Borrower at which the Administrative Agent would be willing to make such Swing
Loan available to the Borrower for the Interest Period so requested (the rate so
quoted for a given Interest Period being herein

 

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referred to as “Administrative Agent’s Quoted Rate”). The Borrower acknowledges
and agrees that the interest rate quote is given for immediate and irrevocable
acceptance. If the Borrower does not so immediately accept the Administrative
Agent’s Quoted Rate for the full amount requested by the Borrower for such Swing
Loan, the Administrative Agent’s Quoted Rate shall be deemed immediately
withdrawn and such Swing Loan shall bear interest at the rate per annum
determined by adding the Applicable Margin for Base Rate Loans under the
Revolving Credit to the Base Rate as from time to time in effect. If the
Borrower requests a Swing Loan at the Base Rate, such Swing Loan shall bear
interest at the rate per annum determined by adding the Applicable Margin for
the Base Rate Loans under the Revolving Credit to the Base Rate as from time to
time in effect. Subject to the terms and conditions hereof, the proceeds of such
Swing Loan shall be made available to the Borrower on the date so requested at
the offices of the Administrative Agent in Chicago, Illinois. Anything contained
in the foregoing to the contrary notwithstanding, (i) the obligation of the
Administrative Agent to make Swing Loans shall be subject to all of the terms
and conditions of this Agreement and (ii) the Administrative Agent shall not be
obligated to make more than one Swing Loan during any one day.

(d) Refunding Loans. In its sole and absolute discretion, the Administrative
Agent may at any time, on behalf of the Borrower (which hereby irrevocably
authorizes the Administrative Agent to act on its behalf for such purpose) and
with notice to the Borrower, request each Lender to make a Revolving Loan in the
form of a Base Rate Loan in an amount equal to such Lender’s Revolver Percentage
of the amount of the Swing Loans outstanding on the date such notice is given.
Unless an Event of Default described in Section 9.1(j) or 9.1(k) exists with
respect to the Borrower, regardless of the existence of any other Event of
Default, each Lender shall make the proceeds of its requested Revolving Loan
available to the Administrative Agent, in immediately available funds, at the
Administrative Agent’s principal office in Chicago, Illinois, before 12:00 Noon
(Chicago time) on the Business Day following the day such notice is given. The
proceeds of such Borrowing of Revolving Loans shall be immediately applied to
repay the outstanding Swing Loans.

(e) Participations. If any Lender refuses or otherwise fails to make a Revolving
Loan when requested by the Administrative Agent pursuant to Section 1.14(d)
above (because an Event of Default described in Section 9.1(j) or 9.1(k) exists
with respect to the Borrower or otherwise), such Lender will, by the time and in
the manner such Revolving Loan was to have been funded to the Administrative
Agent, purchase from the Administrative Agent an undivided participating
interest in the outstanding Swing Loans in an amount equal to its Revolver
Percentage of the aggregate principal amount of Swing Loans that were to have
been repaid with such Revolving Loans. Each Lender that so purchases a
participation in a Swing Loan shall thereafter be entitled to receive its
Revolver Percentage of each payment of principal received on the Swing Loan and
of interest received thereon accruing from the date such Lender funded to the
Administrative Agent its participation in such Loan. The several obligations of
the Lenders under this Section shall be absolute, irrevocable and unconditional
under any and all circumstances whatsoever and shall not be subject to any
set-off, counterclaim or defense to payment which any Lender may have or have
had against the Borrower, any other Lender or any other Person whatsoever.
Without limiting the generality of the foregoing, such obligations shall not be
affected by any Default or Event of Default or by any reduction or termination
of the Commitments of any Lender, and each payment made by a Lender under this
Section shall be made without any offset, abatement, withholding or reduction
whatsoever.

 

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Section 1.15. Defaulting Lenders. Anything contained herein to the contrary
notwithstanding, in the event that any Lender at any time is a Defaulting
Lender, then (a) during any Defaulting Lender Period with respect to such
Defaulting Lender, such Defaulting Lender shall be deemed not to be a “Lender”
for purposes of voting on any matters (including the granting of any consents or
waivers) with respect to any of the Loan Documents and such Defaulting Lender’s
Commitments shall be excluded for purposes of determining “Required Lenders”
(provided that the foregoing shall not permit an increase in such Lender’s
Commitments or an extension of the maturity date of such Lender’s Loans or other
Obligations without such Lender’s consent); (b) to the extent permitted by
applicable law, until such time as the Defaulting Lender Excess with respect to
such Defaulting Lender shall have been reduced to zero, any voluntary prepayment
of the Loans shall, if the Administrative Agent so directs at the time of making
such voluntary prepayment, be applied to the Loans of other Lenders as if such
Defaulting Lender had no Loans outstanding; (c) such Defaulting Lender’s
Commitments and outstanding Loans shall be excluded for purposes of calculating
any commitment fee payable to Lenders pursuant to Section 2.1 in respect of any
day during any Defaulting Lender Period with respect to such Defaulting Lender,
and such Defaulting Lender shall not be entitled to receive any fee pursuant to
Section 2.1 with respect to such Defaulting Lender’s Revolving Credit Commitment
in respect of any Defaulting Lender Period with respect to such Defaulting
Lender (and any letter of credit fee otherwise payable to a Lender who is a
Defaulting Lender shall instead be paid to the L/C Issuer for its use and
benefit); (d) the utilization of Commitments as at any date of determination
shall be calculated as if such Defaulting Lender had funded all Loans of such
Defaulting Lender; and (e) if so requested by the L/C Issuer at any time during
the Defaulting Lender Period with respect to such Defaulting Lender, the
Borrower shall deliver to the Administrative Agent cash collateral in an amount
equal to such Defaulting Lender’s Revolver Percentage of L/C Obligations then
outstanding (to be held by the Administrative Agent as set forth in Section 9.4
hereof). No Commitment of any Lender shall be increased or otherwise affected,
and, except as otherwise expressly provided in this Section 1.15, performance by
the Borrower of its obligations hereunder and the other Loan Documents shall not
be excused or otherwise modified as a result of the operation of this
Section 1.15. The rights and remedies against a Defaulting Lender under this
Section 1.15 are in addition to other rights and remedies which the Borrower may
have against such Defaulting Lender and which the Administrative Agent or any
Lender may have against such Defaulting Lender.

SECTION 2.    FEES.

Section 2.1. Fees. (a) Revolving Credit Commitment Fee. The Borrower shall pay
to the Administrative Agent for the ratable account of the Lenders in accordance
with their Revolver Percentages a commitment fee at the rate per annum equal to
the Applicable Margin (computed on the basis of a year of 360 days and the
actual number of days elapsed) on the average daily Unused Revolving Credit
Commitments. Such commitment fee shall be payable quarter-annually in arrears on
the last day of each March, June, September and December in each year
(commencing on the first such date occurring after the date hereof) and on the
Revolving Credit Termination Date, unless the Revolving Credit Commitments are
terminated in whole on an earlier date, in which event the commitment fee for
the period to the date of such termination in whole shall be paid on the date of
such termination.

 

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(b) Letter of Credit Fees. On the date of issuance or extension, or increase in
the amount, of any Letter of Credit pursuant to Section 1.2 hereof, the Borrower
shall pay to the L/C Issuer for its own account a fronting fee equal to 0.25% of
the face amount of (or of the increase in the face amount of) such Letter of
Credit. Quarterly in arrears, on the last day of each March, June, September and
December, commencing on the first such date occurring after the date hereof, the
Borrower shall pay to the Administrative Agent, for the ratable benefit of the
Lenders in accordance with their Revolver Percentages, a letter of credit fee at
a rate per annum equal to the Applicable Margin (computed on the basis of a year
of 360 days and the actual number of days elapsed) in effect during each day of
such quarter applied to the daily average face amount of Letters of Credit
outstanding during such quarter. In addition, the Borrower shall pay to the L/C
Issuer for its own account the L/C Issuer’s standard issuance, drawing,
negotiation, amendment, assignment, and other administrative fees for each
Letter of Credit as established by the L/C Issuer from time to time.

(c) Administrative Agent Fees. The Borrower shall pay to the Administrative
Agent, for its own use and benefit, the fees agreed to between the
Administrative Agent and the Borrower in a letter dated June 5, 2012, or as
otherwise agreed to in writing between them.

(d) Audit Fees. The Borrower shall pay to the Administrative Agent for its own
use and benefit reasonable charges for audits of the Collateral performed by the
Administrative Agent or its agents or representatives in such amounts as the
Administrative Agent may from time to time request (the Administrative Agent
acknowledging and agreeing that such charges shall be computed in the same
manner as it at the time customarily uses for the assessment of charges for
similar collateral audits); provided, however, that in the absence of any
Default and Event of Default, the Borrower shall not be required to pay the
Administrative Agent for more than one (1) such audit per calendar year.

SECTION 3.    PLACE AND APPLICATION OF PAYMENTS.

Section 3.1. Place and Application of Payments. All payments of principal of and
interest on the Loans and the Reimbursement Obligations, and of all other
Obligations payable by the Borrower under this Agreement and the other Loan
Documents, shall be made by the Borrower to the Administrative Agent by no later
than 12:00 Noon (Chicago time) on the due date thereof at the office of the
Administrative Agent in Chicago, Illinois (or such other location as the
Administrative Agent may designate to the Borrower) for the benefit of the
Lender or Lenders entitled thereto. Any payments received after such time shall
be deemed to have been received by the Administrative Agent on the next Business
Day. All such payments shall be made in immediately available funds at the place
of payment without set-off or counterclaim. The Administrative Agent will
promptly thereafter cause to be distributed like funds relating to the payment
of principal or interest on Loans and on Reimbursement Obligations in which the
Lenders have purchased Participating Interests ratably to the Lenders and like
funds relating to the payment of any other amount payable to any Lender to such
Lender, in each case to be applied in accordance with the terms of this
Agreement. If the Administrative Agent causes

 

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amounts to be distributed to the Lenders in reliance upon the assumption that
the Borrower will make a scheduled payment and such scheduled payment is not so
made, each Lender shall, on demand, repay to the Administrative Agent the amount
distributed to such Lender together with interest thereon in respect of each day
during the period commencing on the date such amount was distributed to such
Lender and ending on (but excluding) the date such Lender repays such amount to
the Administrative Agent, at a rate per annum equal to: (i) from the date the
distribution was made to the date 2 Business Days after payment by such Lender
is due hereunder, the Federal Funds Rate for each such day and (ii) from the
date 2 Business Days after the date such payment is due from such Lender to the
date such payment is made by such Lender, the Base Rate in effect for each such
day.

Anything contained herein to the contrary notwithstanding, all payments and
collections received in respect of the Obligations and all proceeds of the
Collateral received, in each instance, by the Administrative Agent or any of the
Lenders after the occurrence and during the continuation of an Event of Default,
shall be remitted to the Administrative Agent and distributed as follows:

(a) first, to the payment of any outstanding costs and expenses incurred by the
Administrative Agent, and any security trustee therefor, in monitoring,
verifying, protecting, preserving or enforcing the Liens on the Collateral, in
protecting, preserving or enforcing rights under the Loan Documents, and in any
event including all costs and expenses of a character which the Borrower has
agreed to pay the Administrative Agent under Section 13.15 hereof (such funds to
be retained by the Administrative Agent for its own account unless it has
previously been reimbursed for such costs and expenses by the Lenders, in which
event such amounts shall be remitted to the Lenders to reimburse them for
payments theretofore made to the Administrative Agent);

(b) second, to the payment of principal and interest on the Swing Note until
paid in full;

(c) third, to the payment of any outstanding interest and fees due under the
Loan Documents to be allocated pro rata in accordance with the aggregate unpaid
amounts owing to each holder thereof;

(d) fourth, to the payment of principal on the Notes, unpaid Reimbursement
Obligations, together with amounts to be held by the Administrative Agent as
collateral security for any outstanding L/C Obligations pursuant to Section 9.4
hereof (until the Administrative Agent is holding an amount of cash equal to the
then outstanding amount of all such L/C Obligations), and Hedging Liability, the
aggregate amount paid to, or held as collateral security for, the Lenders and
the L/C Issuer and, in the case of Hedging Liability, their Affiliates to be
allocated pro rata in accordance with the aggregate unpaid amounts owing to each
holder thereof;

(e) fifth, to the payment of all other unpaid Obligations and all other
indebtedness, obligations, and liabilities of the Borrower and its Subsidiaries
secured by the Loan Documents (including, without limitation, Funds Transfer and
Deposit Account Liability) to be allocated pro rata in accordance with the
aggregate unpaid amounts owing to each holder thereof; and

 

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(f) finally, to the Borrower or whoever else may be lawfully entitled thereto.

Section 3.2. Account Debit. The Borrower hereby irrevocably authorizes the
Administrative Agent to charge any of the Borrower’s deposit accounts maintained
with the Administrative Agent for the amounts from time to time necessary to pay
any then due Obligations; provided that the Borrower acknowledges and agrees
that the Administrative Agent shall not be under an obligation to do so and the
Administrative Agent shall not incur any liability to the Borrower or any other
Person for the Administrative Agent’s failure to do so.

SECTION 4.    GUARANTIES AND COLLATERAL.

Section 4.1. Guaranties. The payment and performance of the Obligations, Hedging
Liability, and Funds Transfer and Deposit Account Liability shall at all times
be guaranteed by each direct and indirect Domestic Subsidiary of the Borrower
(individually a “Guarantor” and collectively the “Guarantors”) pursuant to
Section 12 hereof or pursuant to one or more guaranty agreements in form and
substance acceptable to the Administrative Agent, as the same may be amended,
modified or supplemented from time to time (individually a “Guaranty” and
collectively the “Guaranties”).

Section 4.2. Collateral. The Obligations, Hedging Liability, and Funds Transfer
and Deposit Account Liability shall be secured to the extent provided herein and
in the Collateral Documents by (a) valid, perfected and enforceable Liens on all
right, title, and interest of the Borrower and the Guarantors in all capital
stock and other equity interests held by such Person in each of its Domestic
Subsidiaries, whether now owned or hereafter formed or acquired, and all
proceeds thereof, and (b) valid, perfected, and enforceable Liens on all right,
title, and interest of the Borrower and each Guarantor in all personal property,
fixtures, and to the extent provided in Section 4.3 hereof real estate, whether
now owned or hereafter acquired or arising, and all proceeds thereof; provided,
however, that: (i) until an Event of Default has occurred and is continuing and
thereafter until otherwise required by the Administrative Agent or the Required
Lenders, Liens on local petty cash deposit accounts maintained by the Borrower
and the Guarantors in proximity to their operations need not be perfected
provided that the total amount on deposit at any one time not so perfected shall
not exceed $1,000,000 in the aggregate and Liens on payroll accounts maintained
by the Borrower and the Guarantors need not be perfected provided the total
amount on deposit at any time does not exceed the current amount of their
payroll obligations, (ii) until an Event of Default has occurred and is
continuing and thereafter until otherwise required by the Administrative Agent
or the Required Lenders, Liens on vehicles which are subject to a certificate of
title law need not be perfected provided that the total value of such property
at any one time not so perfected shall not exceed $1,000,000 in the aggregate
and (iii) until an Event of Default has occurred and is continuing and
thereafter until otherwise required by the Administrative Agent or the Required
Lenders, Liens are not required to be granted or perfected on (A) Property of
the Borrower and the Guarantors (other than Property which is being pledged
pursuant to the Security Agreement) located outside of the United States of
America or Property as to which the grant or perfection of a Lien thereon would
not be

 

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governed by the laws of the United States of America or any State thereof,
provided that the aggregate net book value of such Property at any one time not
so encumbered does not exceed $1,000,000 in the aggregate and (B) goods in
transit outside of the United States of America in the ordinary course of
business. The Borrower and the Guarantors acknowledge and agree that each Lien
on the Collateral shall be granted by the Borrower and the Guarantors to the
Administrative Agent for the benefit of the holder of the Obligations, the
Hedging Liability, and the Funds Transfer and Deposit Account Liability and
shall be a valid and perfected first priority Lien subject only to Liens
permitted by Section 8.8 hereof, in each case pursuant to one or more Collateral
Documents from such Persons, each in form and substance satisfactory to the
Administrative Agent. In furtherance and not in limitation of the foregoing the
Borrower and the Guarantors agree that any reference to the Original Credit
Agreement and the Original Security Agreement contained in any Collateral
Documents (other than the Original Security Agreement and the Mortgages) shall
without any further action be deemed to refer to this Agreement and the Security
Agreement, respectively.

Section 4.3. Liens on Real Property. In the event that the Borrower or any
Guarantor owns or hereafter acquires any real property which, in the case of
hereafter acquired property (a) has a fair market value greater than $1,000,000,
or (b) is contiguous to the Borrower’s or such Guarantor’s operations and has a
fair market value greater than $500,000, the Borrower shall, or shall cause such
Guarantor to, execute and deliver to the Administrative Agent a mortgage or deed
of trust acceptable in form and substance to the Administrative Agent for the
purpose of granting to the Administrative Agent (or a security trustee therefor)
a Lien on such real property to secure the Obligations, Hedging Liability, and
Funds Transfer and Deposit Account Liability, shall pay all taxes, costs, and
expenses incurred by the Administrative Agent in recording such mortgage or deed
of trust, and shall supply to the Administrative Agent at the Borrower’s cost
and expense a survey, environmental report, hazard insurance policy, appraisal
report, and a mortgagee’s policy of title insurance from a title insurer
acceptable to the Administrative Agent insuring the validity of such mortgage or
deed of trust and its status as a first Lien (subject to Liens permitted by this
Agreement) on the real property encumbered thereby and such other instrument,
documents, certificates, and opinions reasonably required by the Administrative
Agent in connection therewith. The Lenders acknowledge that Carolina Starches,
LLC and Penford Carolina, LLC shall not be required to grant mortgages to the
Administrative Agent in the real property owned by them on the Closing Date.

Section 4.4. Further Assurances. The Borrower agrees that it shall, and shall
cause each Guarantor to, from time to time at the request of the Administrative
Agent or the Required Lenders, execute and deliver such documents and do such
acts and things as the Administrative Agent or the Required Lenders may
reasonably request in order to provide for or perfect or protect such Liens on
the Collateral. In the event the Borrower or any Guarantor forms or acquires any
other Subsidiary after the date hereof, except as otherwise provided in
Sections 4.1 and 4.2 above, the Borrower shall promptly upon such formation or
acquisition cause such newly formed or acquired Subsidiary to execute a Guaranty
and such Collateral Documents as the Administrative Agent may then require, and
the Borrower shall also deliver to the Administrative Agent, or cause such
Subsidiary to deliver to the Administrative Agent, at the Borrower’s cost and
expense, such other instruments, documents, certificates, and opinions
reasonably required by the Administrative Agent in connection therewith.

 

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Section 4.5. Operating Accounts. The Borrower shall maintain all of its
operating deposit accounts with the Administrative Agent (or an Affiliate of the
Administrative Agent) or with other financial institutions selected by the
Borrower and acceptable to the Administrative Agent which financial institutions
have entered, or will enter, into acceptable account control agreements with the
Administrative Agent relating to such accounts.

SECTION 5.    DEFINITIONS; INTERPRETATION.

Section 5.1. Definitions. The following terms when used herein shall have the
following meanings:

“Acquired Business” means the entity or assets acquired by the Borrower or a
Subsidiary in an Acquisition after the date hereof.

“Acquisition” means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or substantially all of the assets of a Person, or of any business or division
of a Person, (b) the acquisition of in excess of 50% of the capital stock,
partnership interests, membership interests or equity of any Person (other than
a Person that is a Subsidiary), or otherwise causing any Person to become a
Subsidiary, or (c) a merger or consolidation or any other combination with
another Person (other than a Person that is a Subsidiary) provided that the
Borrower or the Subsidiary is the surviving entity.

“Adjusted LIBOR” means, for any Borrowing of Eurodollar Loans, a rate per annum
determined in accordance with the following formula:

 

  Adjusted LIBOR    =   

LIBOR

           1 - Eurocurrency Reserve Percentage   

“Administrative Agent” means Bank of Montreal and any successor pursuant to
Section 11.7 hereof.

“Administrative Agent’s Quoted Rate” is defined in Section 1.14(c) hereof.

“Affiliate” means any Person directly or indirectly controlling or controlled
by, or under direct or indirect common control with, another Person. A Person
shall be deemed to control another Person for the purposes of this definition if
such Person possesses, directly or indirectly, the power to direct, or cause the
direction of, the management and policies of the other Person, whether through
the ownership of voting securities, common directors, trustees or officers, by
contract or otherwise; provided that, in any event for purposes of this
definition, any Person that owns, directly or indirectly, 5% or more of the
securities having the ordinary voting power for the election of directors or
governing body of a corporation or 5% or more of the partnership or other
ownership interest of any other Person (other than as a limited partner of such
other Person) will be deemed to control such corporation or other Person;
provided further, however, that the term “Affiliate” shall exclude in any event
all Related Parties.

 

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“Agreement” means this Fourth Amended and Restated Credit Agreement, as the same
may be amended, modified, restated or supplemented from time to time pursuant to
the terms hereof.

“Applicable Margin” means, with respect to Loans, Reimbursement Obligations, and
the commitment fees and letter of credit fees payable under Section 2.1 hereof,
until the first Pricing Date, the rates per annum shown opposite Level V below,
and thereafter from one Pricing Date to the next the Applicable Margin means the
rates per annum determined in accordance with the following schedules:

 

LEVEL   

TOTAL LEVERAGE

RATIO FOR SUCH

PRICING DATE

   APPLICABLE MARGIN FOR
BASE RATE LOANS AND
REIMBURSEMENT
OBLIGATIONS SHALL BE:  

APPLICABLE MARGIN FOR
EURODOLLAR LOANS  AND

LETTER OF CREDIT FEE
SHALL BE:

 

APPLICABLE MARGIN
FOR REVOLVING  CREDIT
COMMITMENT FEE

SHALL BE:

V    Greater than 3.50 to 1.0    3.00%   4.00%   0.50% IV    Less than or equal
to 3.50 to 1.0, but greater than 3.00 to 1.0    2.50%   3.50%   0.50% III   
Less than or equal to 3.00 to 1.0, but greater than 2.50 to 1.0    2.00%   3.00%
  0.50% II    Less than or equal to 2.50 to 1.0, but greater than 2.00 to 1.0   
1.50%   2.50%   0.45% I    Less than or equal to 2.00    1.00%   2.00%   0.40%

For purposes hereof, the term “Pricing Date” means, for any fiscal quarter of
the Borrower ending on or after August 31, 2012, the date on which the
Administrative Agent is in receipt of the Borrower’s most recent financial
statements (and, in the case of the year-end financial statements, audit report)
for the fiscal quarter then ended, pursuant to Section 8.5 hereof. The
Applicable Margin shall be established based on the Total Leverage Ratio for the
most recently completed fiscal quarter and the Applicable Margin established on
a Pricing Date shall remain in effect until the next Pricing Date. If the
Borrower has not delivered its financial statements by the date such financial
statements (and, in the case of the year-end financial statements, audit report)
are required to be delivered under Section 8.5 hereof, until such financial
statements and audit report are delivered, the Applicable Margin shall be the
highest Applicable Margin (i.e., the Total Leverage Ratio shall be deemed to be
greater than 3.50 to 1.0). If the Borrower subsequently delivers such financial
statements before the next Pricing Date, the Applicable Margin established by
such late delivered financial statements shall take effect from the date of
delivery until the next Pricing Date. In all other circumstances, the Applicable
Margin established by such financial statements shall be in effect from the
Pricing Date that occurs

 

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immediately after the end of the fiscal quarter covered by such financial
statements until the next Pricing Date. Each determination of the Applicable
Margin made by the Administrative Agent in accordance with the foregoing shall
be conclusive and binding on the Borrower and the Lenders if reasonably
determined.

“Application” is defined in Section 1.2(b) hereof.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

“Authorized Representative” means those persons shown on the list of officers
provided by the Borrower pursuant to Section 7.2 hereof or on any update of any
such list provided by the Borrower to the Administrative Agent, or any further
or different officers of the Borrower so named by any Authorized Representative
of the Borrower in a written notice to the Administrative Agent.

“Base Rate” means with respect to credit extended in U.S. Dollars, for any day,
the rate per annum equal to the greatest of: (a) the rate of interest announced
or otherwise established by the Administrative Agent from time to time as its
prime commercial rate, or its equivalent, for U.S. Dollar loans to borrowers
located in the United States as in effect on such day, with any change in the
Base Rate resulting from a change in said prime commercial rate to be effective
as of the date of the relevant change in said prime commercial rate (it being
acknowledged and agreed that such rate may not be the Administrative Agent’s
best or lowest rate), (b) the sum of (i) the rate determined by the
Administrative Agent to be the average (rounded upward, if necessary, to the
next higher 1/100 of 1%) of the rates per annum quoted to the Administrative
Agent at approximately 10:00 a.m. (Chicago time) (or as soon thereafter as is
practicable) on such day (or, if such day is not a Business Day, on the
immediately preceding Business Day) by two or more Federal funds brokers
selected by the Administrative Agent for sale to the Administrative Agent at
face value of Federal funds in the secondary market in an amount equal or
comparable to the principal amount for which such rate is being determined, plus
(ii) 1/2 of 1%, and (c) the LIBOR Quoted Rate for such day plus 1.00%.

“Base Rate Loan” means a Loan bearing interest at a rate specified in
Section 1.3(a) hereof.

“BMO” means Bank of Montreal, a Canadian chartered bank.

“Borrower” is defined in the introductory paragraph of this Agreement.

“Borrowing” means the total of Loans of a single type advanced, continued for an
additional Interest Period, or converted from a different type into such type by
the Lenders on a single date and, in the case of Eurodollar Loans, for a single
Interest Period. Borrowings of Loans are made and maintained ratably from each
of the Lenders according to their Revolver Percentages. A Borrowing is
“advanced” on the day Lenders advance funds comprising such Borrowing to the
Borrower, is “continued” on the date a new Interest Period for the same type of

 

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Loans commences for such Borrowing, and is “converted” when such Borrowing is
changed from one type of Loans to the other, all as requested pursuant to
Section 1.5(a) hereof. Borrowings of Swing Loans are made by the Administrative
Agent in accordance with the procedures set forth in Section 1.14 hereof.

“Business Day” means any day (other than a Saturday or Sunday) on which banks
are not authorized or required to close in Chicago, Illinois or Englewood,
Colorado, and, if the applicable Business Day relates to the advance or
continuation of, or conversion into, or payment of a Eurodollar Loan, on which
banks are dealing in U.S. Dollar deposits in the interbank Eurocurrency market
in London, England and Nassau, Bahamas.

“Capital Expenditures” means, with respect to any Person for any period, the
aggregate amount of all expenditures (whether paid in cash or accrued as a
liability) by such Person during that period for the acquisition or leasing
(pursuant to a Capital Lease) of fixed or capital assets or additions to
property, plant, or equipment (including replacements, capitalized repairs, and
improvements) which should be capitalized on the balance sheet of such Person in
accordance with GAAP.

“Capital Lease” means any lease of Property, which in accordance with GAAP is
required to be capitalized on the balance sheet of the lessee.

“Capitalized Lease Obligation” means, for any Person, the amount of the
liability shown on the balance sheet of such Person in respect of a Capital
Lease determined in accordance with GAAP.

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. §§9601 et seq., and any future
amendments.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority, or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary,(x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, regulations, guidelines or directives thereunder or issued
in connection therewith shall be deemed to be a “Change in Law”, regardless of
the date enacted, adopted or issued and (y) all requests, rules, guidelines or
directives promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the
United States or foreign regulatory authorities, in each case pursuant to Basel
III, shall in each case be deemed to be a “Change in Law”, regardless of the
date enacted, adopted or issued.

“Change of Control” means any of (a) the acquisition by any “person” or “group”
(as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended) at any time of beneficial ownership of 40% or more of
the outstanding capital stock or

 

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other equity interests of the Borrower on a fully-diluted basis, (b) the failure
of individuals who are members of the board of directors (or similar governing
body) of the Borrower on the Closing Date (together with any new or replacement
directors whose initial nomination for election was approved by either a
majority of the Borrower’s shareholders or a majority of the directors who were
either directors on the Closing Date or previously so approved) to constitute a
majority of the board of directors (or similar governing body) of the Borrower,
or (c) any “Change of Control” (or words of like import), as defined in any
other agreement or indenture, in each case, relating to any issue of
Indebtedness for Borrowed Money having an aggregate principal amount in excess
of $5,000,000 shall occur.

“Closing Date” means the date of this Agreement or such later Business Day upon
which each condition described in Section 7.2 shall be satisfied or waived in a
manner acceptable to the Administrative Agent in its discretion.

“Code” means the Internal Revenue Code of 1986, as amended, and any successor
statute thereto.

“Collateral” means all properties, rights, interests, and privileges from time
to time subject to the Liens granted to the Administrative Agent, or any
security trustee therefore, by the Collateral Documents.

“Collateral Account” is defined in Section 9.4 hereof.

“Collateral Documents” means the Mortgages, the Security Agreement and all other
mortgages, deeds of trust, security agreements, pledge agreements, assignments,
financing statements and other documents as shall from time to time secure or
relate to the Obligations, the Hedging Liability, and the Funds Transfer and
Deposit Account Liability or any part thereof.

“Commitment Amount Increase” is defined in Section 1.1(b) hereof.

“Commitments” means the Revolving Credit Commitments.

“Controlled Group” means all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414 of the Code.

“Credit Event” means the advancing of any Loan, the continuation of or
conversion into a Eurodollar Loan, or the issuance of, or extension of the
expiration date or increase in the amount of, any Letter of Credit.

“Default” means any event or condition the occurrence of which would, with the
passage of time or the giving of notice, or any combination of the foregoing,
constitute an Event of Default.

“Defaulting Lender” means, subject to Section 1.15(b), any Lender that (a) has
failed to (i) fund all or any portion of its Loans within two Business Days of
the date such Loans were

 

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required to be funded hereunder unless such Lender notifies the Administrative
Agent and the Borrower in writing that such failure is the result of such
Lender’s determination that one or more conditions precedent to funding (each of
which conditions precedent, together with any applicable default, shall be
specifically identified in such writing) has not been satisfied, or (ii) pay to
the Administrative Agent, any L/C Issuer or any other Lender any other amount
required to be paid by it hereunder (including in respect of its participation
in Letters of Credit or Swing Loans) within two Business Days of the date when
due, (b) has notified the Borrower, the Administrative Agent or any L/C Issuer
in writing that it does not intend to comply with its funding obligations
hereunder, or has made a public statement to that effect (unless such writing or
public statement relates to such Lender’s obligation to fund a Loan hereunder
and states that such position is based on such Lender’s determination that a
condition precedent to funding (which condition precedent, together with any
applicable default, shall be specifically identified in such writing or public
statement) cannot be satisfied), (c) has failed, within three Business Days
after written request by the Administrative Agent or the Borrower, to confirm in
writing to the Administrative Agent and the Borrower that it will comply with
its prospective funding obligations hereunder (provided that such Lender shall
cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such
written confirmation by the Administrative Agent and the Borrower), or (d) has,
or has a direct or indirect parent company that has, (i) become the subject of a
proceeding under the United States Bankruptcy Code or similar debtor relief
laws, or (ii) had appointed for it a receiver, custodian, conservator, trustee,
administrator, assignee for the benefit of creditors or similar Person charged
with reorganization or liquidation of its business or assets, including the
Federal Deposit Insurance Corporation or any other state or federal regulatory
authority acting in such a capacity; provided that a Lender shall not be a
Defaulting Lender solely by virtue of the ownership or acquisition of any equity
interest in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender. Any determination by the Administrative Agent that a Lender is a
Defaulting Lender under clauses (a) through (d) above shall be conclusive and
binding absent manifest error, and such Lender shall be deemed to be a
Defaulting Lender upon delivery of written notice of such determination to the
Borrower, the L/C Issuer, and each Lender.

“Defaulting Lender Excess” means, with respect to any Defaulting Lender, the
excess, if any, of such Defaulting Lender’s Revolver Percentage of the aggregate
outstanding principal amount of Loans of all Lenders (calculated as if all
Defaulting Lenders other than such Defaulting Lender had funded all of their
respective Defaulted Loans) over the aggregate outstanding principal amount of
all Loans of such Defaulting Lender.

“Defaulting Lender Period” means, with respect to any Defaulting Lender, the
period commencing on the date upon which such Lender first became a Defaulting
Lender and ending on the earliest of the following dates: (i) the date on which
all Revolving Credit Commitments are cancelled or terminated and/or the Loans
are declared or become immediately due and payable and (ii) the date on which
(a) such Defaulting Lender is no longer insolvent, the subject of a bankruptcy
or insolvency proceeding or, if applicable, under the direction of a receiver or

 

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conservator, (b) the Defaulting Lender Excess with respect to such Defaulting
Lender shall have been reduced to zero (whether by the funding by such
Defaulting Lender of any Defaulted Loans of such Defaulting Lender or
otherwise), and (c) such Defaulting Lender shall have delivered to the Borrower
and the Administrative Agent a written reaffirmation of its intention to honor
its obligations hereunder with respect to its Revolving Credit Commitments.

“Domestic Subsidiary” means each Subsidiary of the Borrower which is organized
under the laws of the United States of America or any state thereof.

“EBITDA” means, with reference to any period, Net Income from continuing
operations for such period plus the sum of all amounts deducted in arriving at
such Net Income amount in respect of (a) Interest Expense for such period,
(b) federal, state, and local income taxes for such period, (c) depreciation of
fixed assets and amortization of intangible assets for such period, plus cash
distributions received from Joint Ventures not otherwise included in Net Income,
plus (minus) any non-cash losses (gains) but only to the extent such losses
(gains) have not become a cash loss (or gain), plus non-cash stock compensation
charges incurred in such period, plus (minus) (d) any extraordinary or
nonrecurring losses (gains) (including any cash losses related to the unwinding
of existing interest rate hedging arrangements), plus (e) the amount of all
non-cash charges incurred as a result of the accounting treatment of interest
rate hedging arrangements, minus (f) the amount of all non-cash gains resulting
from the accounting treatment of interest rate hedging arrangements, in each
case relating solely to continuing operations, plus (g) any one-time charges
related to the redemption of the Borrower’s Preferred Stock.

“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an
Approved Fund, and (d) any other Person (other than a natural person) approved
by (i) the Administrative Agent, (ii) in the case of any assignment of a
Revolving Credit Commitment, the L/C Issuer, and (iii) unless an Event of
Default has occurred and is continuing, the Borrower (each such approval not to
be unreasonably withheld or delayed); provided that notwithstanding the
foregoing, “Eligible Assignee” shall not include the Borrower or any Guarantor
or any of the Borrower’s or such Guarantor’s Affiliates, Joint Ventures or
Subsidiaries or any Related Party or, so long as no Event of Default shall have
occurred and be continuing, any of their respective suppliers, customers or
competitors.

“Eligible Line of Business” means any business in which the Borrower and any
Subsidiary are engaged as of the date of this Agreement or any business which is
based upon or is an extension of such a business, including, without limitation,
any business that manufactures or markets (i) ingredients or ingredient systems
developed from starch or other form of carbohydrate, (ii) human or animal food,
(iii) ethanol or any other type of biofuel, or (iv) any other type of material
or chemical developed primarily from natural or renewable sources.

“Environmental Claim” means any investigation, notice, violation, demand,
action, suit, injunction, judgment, order, consent decree, penalty, fine, lien,
proceeding or claim (whether administrative, judicial or private in nature)
arising (a) pursuant to, or in connection with an actual or alleged violation
of, any Environmental Law, (b) in connection with a law relating to Hazardous
Material, (c) from any abatement, removal, remedial, corrective or response
action in connection with a Hazardous Material, Environmental Law or order of a
governmental authority or (d) from any actual or alleged damage, injury, threat
or harm to health, safety, natural resources or the environment.

 

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“Environmental Law” means any Legal Requirement pertaining to (a) the protection
of health, safety and the indoor or outdoor environment, (b) the conservation,
management or use of natural resources and wildlife, (c) the protection or use
of surface water or groundwater, (d) the management, manufacture, possession,
presence, use, generation, transportation, treatment, storage, disposal,
Release, threatened Release, abatement, removal, remediation or handling of, or
exposure to, any Hazardous Material or (e) pollution (including any Release to
air, land, surface water or groundwater), and any amendment, rule, regulation,
order or directive issued thereunder by a recognized and legally authorized
entity.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
or any successor statute thereto.

“Eurodollar Loan” means a Loan bearing interest at the rate specified in
Section 1.3(b) hereof.

“Eurocurrency Reserve Percentage” means, with respect to any Borrowing of
Revolving Credit Loans, the daily average for the applicable Interest Period of
the maximum rate, expressed as a decimal, at which reserves (including, without
limitation, any supplemental, marginal, and emergency reserves) are imposed
during such Interest Period by the Board of Governors of the Federal Reserve
System (or any successor) on “eurocurrency liabilities”, as defined in such
Board’s Regulation D (or in respect of any other category of liabilities that
includes deposits by reference to which the interest rate on Revolving Credit
Loans is determined or any category of extensions of credit or other assets that
include loans by non-United States offices of any Lender to United States
residents), subject to any amendments of such reserve requirement by such Board
or its successor, taking into account any transitional adjustments thereto. For
purposes of this definition, the Revolving Credit Loans shall be deemed to be
“eurocurrency liabilities” as defined in Regulation D without benefit or credit
for any prorations, exemptions or offsets under Regulation D.

“Event of Default” means any event or condition identified as such in
Section 9.1 hereof.

“Existing Letter of Credit” means a Letter of Credit as defined in and
outstanding under the Original Credit Agreement.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with) and any current or future
regulations or official interpretations thereof.

“Federal Funds Rate” means the fluctuating interest rate per annum described in
part (i) of clause (b) of the definition of Base Rate.

 

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“Fixed Charges” means, with reference to any period, the sum of (a) all
scheduled payments of principal paid in cash during such period with respect to
Indebtedness for Borrowed Money of the Borrower and its Subsidiaries plus
(b) Interest Expense paid in cash by the Borrower and its Subsidiaries for such
period plus (c) all Restricted Payments made by the Borrower during such period
in cash, but excluding the amount of all payments of accrued dividends and the
redemption price paid in cash for any redemptions of the Preferred Stock during
such period, plus (d) federal, state, and local income taxes paid or payable by
the Borrower and its Subsidiaries in cash during such period, minus (e) all
federal, state and local income tax refunds received by the Borrower and its
Subsidiaries during such period.

“Foreign Subsidiary” means each Subsidiary which (a) is organized under the laws
of a jurisdiction other than the United States of America or any state thereof,
(b) conducts substantially all of its business outside of the United States of
America, and (c) has substantially all of its assets outside of the United
States of America.

“Free Cash Flow” means, with respect to any period, an amount equal to EBITDA of
the Borrower and its Subsidiaries for such period minus the sum of (a) Capital
Expenditures made by the Borrower and its Subsidiaries during such period,
(b) payments of principal paid in cash during such period with respect to
Indebtedness for Borrowed Money of the Borrower and its Subsidiaries,
(c) Interest Expense paid in cash by the Borrower and its Subsidiaries for such
period, and (d) federal, state, and local income taxes paid in cash by the
Borrower and its Subsidiaries during such period, plus (e) all federal, state,
and local income tax refunds received by the Borrower and its Subsidiaries
during such period.

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

“Funds Transfer and Deposit Account Liability” means the liability of the
Borrower or any Subsidiary owing to any of the Lenders, or any Affiliates of
such Lenders, arising out of (a) the execution or processing of electronic
transfers of funds by automatic clearing house transfer, wire transfer or
otherwise to or from the deposit accounts of the Borrower and/or any Subsidiary
now or hereafter maintained with any of the Lenders or their Affiliates, (b) the
acceptance for deposit or the honoring for payment of any check, draft or other
item with respect to any such deposit accounts, including any overdraft facility
that is solely ancillary to any of the foregoing, and (c) any credit card,
purchase card or other deposit, disbursement, and cash management services
afforded to the Borrower or any Subsidiary by any of such Lenders or their
Affiliates.

“GAAP” means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.

 

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“Governmental Authority” means the government of the United States of America or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).

“Guarantor” and “Guarantors” each is defined in Section 4.1 hereof.

“Guaranty” and “Guaranties” each is defined in Section 4.1 hereof.

“Hazardous Material” means any substance, chemical, compound, product, solid,
gas, liquid, waste, byproduct, pollutant, contaminant or material which is
classified or regulated as “hazardous” or “toxic” or words of like import
pursuant to any Environmental Law and including, without limitation, asbestos,
polychlorinated biphenyls and petroleum (including crude oil or any fraction
thereof).

“Hazardous Material Activity” means any activity, event or occurrence involving
a Hazardous Material, including, without limitation, the manufacture,
possession, presence, use, generation, transportation, treatment, storage,
disposal, Release, threatened Release, abatement, removal, remediation, handling
of or corrective or response action to any Hazardous Material.

“Hedging Liability” means the liability of the Borrower or any Subsidiary to any
of the Lenders, or any Affiliates of such Lenders, in respect of any interest
rate, foreign currency, and/or commodity swap, exchange, cap, collar, floor,
forward, future or option agreement, or any other similar interest rate,
currency or commodity hedging arrangement (each, a “Hedging Agreement”),
including any overdraft facility that is solely ancillary to any of the
foregoing, as the Borrower or such Subsidiary, as the case may be, may from time
to time enter into with any one or more of the Lenders party to this Agreement
or their Affiliates.

“Hostile Acquisition” means the acquisition of the capital stock or other equity
interests of a Person through a tender offer or similar solicitation of the
owners of such capital stock or other equity interests which has not been
approved (prior to the consummation of such acquisition) by resolutions of the
Board of Directors of such Person or by similar action if such Person is not a
corporation, and as to which such approval has not been withdrawn.

“Indebtedness for Borrowed Money” means for any Person (without duplication)
(a) all indebtedness of such Person for borrowed money, whether current or
funded, or secured or unsecured, (b) all indebtedness for the deferred purchase
price of Property or services, (c) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by such Person (even though the rights and remedies of the seller or
Lender under such agreement in the event of a default are limited to
repossession or sale of such Property), (d) all indebtedness secured by a
purchase money mortgage or other Lien to secure all or part of the purchase
price of Property subject to such mortgage or Lien, (e) all obligations under
leases which shall have been or must be, in accordance with GAAP, recorded as
Capital Leases in respect of which such Person is liable as lessee, (f) any
indebtedness, whether or not

 

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assumed, secured by Liens on Property acquired by such Person at the time of
acquisition thereof, (g) any shares which are expressed to be redeemable,
(h) any liability in respect of any guarantee or indemnity for any of the items
referred to above, and (i) all indebtedness secured by any Lien upon Property of
such Person, whether or not such Person has assumed or become liable for the
payment of such indebtedness; it being understood that the term “Indebtedness
for Borrowed Money” shall not include (x) trade payables arising in the ordinary
course of business, and (y) any liabilities with respect to any post-retirement
benefits under a Welfare Plan.

“Interest Expense” means, with reference to any period, the sum of all interest
charges (including imputed interest charges with respect to Capitalized Lease
Obligations and all amortization of debt discount and expense) of the Borrower
and its Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP.

“Interest Period” is defined in Section 1.6 hereof.

“Investor” means Zell Credit Opportunities Master Fund, L.P.

“Joint Venture” means an entity formed or acquired after the date of this
Agreement for which ownership, control and/or profits and losses are shared by
the Borrower or any Subsidiary with a third party pursuant to a written
agreement, in each case to the extent the Borrower’s or such Subsidiary’s equity
interest therein is permitted by Section 8.9(h) hereof.

“L/C Issuer” means the Administrative Agent, any Affiliate of the Agent, or any
other Lender requested by the Borrower and approved by the Administrative Agent
in its sole discretion with respect to any Letter of Credit.

“L/C Obligations” means the aggregate undrawn face amounts of all outstanding
Letters of Credit and all unpaid Reimbursement Obligations.

“L/C Sublimit” means $10,000,000 as reduced pursuant to the terms hereof.

“Legal Requirement” means any applicable treaty, convention, statute, law,
regulation, ordinance, license, permit, governmental approval, injunction,
judgment, order, consent decree or other requirement of any governmental
authority, whether federal, state, or local whether in effect as of the date of
this Agreement or hereafter.

“Lenders” means and includes Bank of Montreal and the other financial
institutions from time to time party to this Agreement, including each party
that becomes a lender hereunder pursuant to Section 1.1(b) hereof and each
assignee Lender pursuant to Section 13.12 hereof. It is understood and agreed
that any “Lender” party to the Original Credit Agreement that does not execute
and deliver this Agreement shall not be a Lender party to this Agreement.

“Lending Office” is defined in Section 10.4 hereof.

“Letter of Credit” is defined in Section 1.2(a) hereof.

 

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“LIBOR” means, for an Interest Period for a Borrowing of Eurodollar Loans,
(a) the LIBOR Index Rate for such Interest Period, if such rate is available,
and (b) if the LIBOR Index Rate cannot be determined, the arithmetic average of
the rates of interest per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) at which deposits in U.S. Dollars in immediately available funds
are offered to the Administrative Agent at 11:00 a.m. (London, England time) two
(2) Business Days before the beginning of such Interest Period by three (3) or
more major banks in the interbank eurodollar market selected by the
Administrative Agent for delivery on the first day of and for a period equal to
such Interest Period and in an amount equal or comparable to the principal
amount of the Eurodollar Loan scheduled to be made as part of such Borrowing.

“LIBOR Index Rate” means, for any Interest Period, the rate per annum (rounded
upwards, if necessary, to the next higher one hundred-thousandth of a percentage
point) for deposits in U.S. Dollars for a period equal to such Interest Period,
which appears on the LIBOR01 Page as of 11:00 a.m. (London, England time) on the
day two (2) Business Days before the commencement of such Interest Period.

“LIBOR01 Page” means the display designated as “LIBOR01 Page” on the Reuters
Service (or such other page as may replace the LIBOR01 Page on that service or
such other service as may be nominated by the British Bankers’ Association as
the information vendor for the purpose of displaying British Bankers’
Association Interest Settlement Rates for U.S. Dollar deposits).

“LIBOR Quoted Rate” means, for any day, the rate per annum equal to the quotient
of (i) the rate per annum (rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point) for deposits in U.S. Dollars for a
one-month interest period which appears on the LIBOR01 Page as of 11:00 a.m.
(London, England time) on such day (or, if such day is not a Business Day, on
the immediately preceding Business Day) divided by (ii) one (1) minus the
Eurocurrency Reserve Percentage.

“Lien” means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, Capital Lease or other title
retention arrangement.

“Loan” means any Revolving Loan or Swing Loan, whether outstanding as a Base
Rate Loan or Eurodollar Loan or otherwise, each of which is a “type” of Loan
hereunder.

“Loan Documents” means this Agreement, the Notes, the Applications, the
Collateral Documents, the Guaranties, and each other instrument or document to
be delivered hereunder or thereunder or otherwise in connection therewith.

“Material Adverse Effect” means (a) a material adverse change in, or material
adverse effect upon, the operations, business, Property, condition (financial or
otherwise) or prospects of the Borrower or of the Borrower and its Subsidiaries
taken as a whole, (b) a material impairment of the ability of the Borrower or
any Subsidiary to perform its material obligations under any Loan Document or
(c) a material adverse effect upon (i) the legality, validity, binding effect or

 

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enforceability against the Borrower or any Subsidiary of any Loan Document or
the rights and remedies of the Administrative Agent and the Lenders thereunder
or (ii) the perfection or priority of any Lien granted under any Collateral
Document.

“Moody’s” means Moody’s Investors Service, Inc.

“Mortgages” means, collectively, each Mortgage and Security Agreement with
Assignment of Rents, each Deed of Trust and Security Agreement with Assignment
of Rents, each Leasehold Mortgage and Security Agreement with Assignment of
Rents, and each Leasehold Deed of Trust and Security Agreement with Assignment
of Rents between the Borrower or the relevant Domestic Subsidiary and the
Administrative Agent relating to such Person’s real property owned or leased, as
applicable, as of the Closing Date and located in the states of Iowa, Idaho,
Washington and Wisconsin, and any other mortgages or deeds of trust delivered to
the Administrative Agent pursuant to Section 4.3 hereof as the same may be
amended, modified, supplemented or restated from time to time.

“Net Income” means, with reference to any period, the net income (or net loss)
of the Borrower and its Subsidiaries for such period computed on a consolidated
basis in accordance with GAAP; provided that there shall be excluded from Net
Income (a) the net income (or net loss) of any Person accrued prior to the date
it becomes a Subsidiary of, or has merged into or consolidated with, the
Borrower or another Subsidiary, and (b) the net income (or net loss) of any
Person (other than a Subsidiary) in which the Borrower or any of its
Subsidiaries has a equity interest in, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower or any of its
Subsidiaries during such period.

“Notes” means and includes the Revolving Notes and the Swing Note.

“Obligations” means all obligations of the Borrower to pay principal and
interest on the Loans, all Reimbursement Obligations owing under the
Applications, all fees and charges payable hereunder, and all other payment
obligations of the Borrower or any of its Subsidiaries arising under or in
relation to any Loan Document, in each case whether now existing or hereafter
arising, due or to become due, direct or indirect, absolute or contingent, and
howsoever evidenced, held or acquired.

“Original Security Agreement” means the Security Agreement dated as of
October 7, 2003, among the Borrower, Penford Products Co. and the Administrative
Agent, as amended and restated by that certain Amended and Restated Security
Agreement dated as of August 22, 2005, as further amended and restated by that
certain Second Amended and Restated Security Agreement dated as of October 5,
2006, and as further amended and restated by that certain Third Amended and
Restated Security Agreement dated as of April 7, 2010, in each case as
previously supplemented and amended.

“OFAC” means the United States Department of Treasury Office of Foreign Assets
Control.

“OFAC Event” means the event specified in Section 8.23 hereof.

 

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“OFAC Sanctions Programs” means all laws, regulations, and Executive Orders
administered by OFAC, including without limitation, the Bank Secrecy Act,
anti-money laundering laws (including, without limitation, the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, Pub. L. 107-56 (a/k/a the USA Patriot Act)), and
all economic and trade sanction programs administered by OFAC, any and all
similar United States federal laws, regulations or Executive Orders, and any
similar laws, regulators or orders adopted by any State within the United
States.

“OFAC SDN List” means the list of the Specially Designated Nationals and Blocked
Persons maintained by OFAC.

“Participating Interest” is defined in Section 1.2(d) hereof.

“Participating Lender” is defined in Section 1.2(d) hereof.

“PBGC” means the Pension Benefit Guaranty Corporation or any Person succeeding
to any or all of its functions under ERISA.

“Permitted Acquisition” means any Acquisition with respect to which all of the
following conditions shall have been satisfied:

(a) the Acquired Business is in an Eligible Line of Business and has its primary
operations within the United States of America;

(b) the Acquisition shall not be a Hostile Acquisition, unless otherwise
approved by the Administrative Agent;

(c) the financial statements of the Acquired Business shall have been audited by
one of the “Big Four” accounting firms or by another independent accounting firm
of national or regional repute or otherwise reasonably satisfactory to the
Administrative Agent, or if such financial statements have not been audited by
such an accounting firm, (i) such financial statements shall have been approved
by the Administrative Agent and (ii) the Acquired Business has undergone a
successful review by an accounting firm acceptable to the Administrative Agent
as part of the Borrower’s due diligence on the Acquisition;

(d) (i) the Total Consideration for any Acquisitions of an Acquired Business
organized in the United States, when taken together with the Total Consideration
for all Acquired Businesses acquired during the immediately preceding 12-month
period (other than the acquisition of Penford Carolina LLC and Carolina
Starches, LLC), does not exceed $50,000,000 in the aggregate, (or $100,000,000
so long as the amount in excess of $50,000,000 is funded solely with the cash
proceeds of the issuance and sale of equity securities of the Borrower on terms
acceptable to the Administrative Agent) and the Total Consideration paid for all
Permitted Acquisitions made after the Closing Date does not exceed $100,000,000
in the aggregate;

 

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(e) the Borrower shall have notified the Administrative Agent and Lenders not
less than 30 days prior to any such Acquisition and furnished to the
Administrative Agent and Lenders at such time reasonable details as to such
Acquisition (including sources and uses of funds therefor), and 3-year
historical financial information and 3-year pro forma financial forecasts of the
Acquired Business on a stand alone basis as well as of the Borrower on a
consolidated basis after giving effect to the Acquisition and covenant
compliance calculations reasonably satisfactory to the Administrative Agent;

(f) if a new Subsidiary is formed or acquired as a result of or in connection
with the Acquisition, the Borrower shall have complied with the requirements of
Section 4 hereof in connection therewith;

(g) after giving effect to the Acquisition, no Default or Event of Default shall
exist, including demonstration to the satisfaction of the Administrative Agent
with respect to the covenants contained in Section 8.22 on a pro forma basis
(calculated on the basis of actual financial results for the most recently
completed four consecutive fiscal quarters);

(h) after giving effect to the Acquisition, the amount of the Unused Revolving
Credit Commitments shall be not less than $15,000,000; and

(i) the Borrower shall have delivered to the Administrative Agent evidence
satisfactory to the Administrative Agent that after giving effect to such
Acquisition the Borrower would be in compliance on a pro forma basis with
Section 8.22(a) hereof by more than 0.25 to 1.0.

“Permitted Transactions” means (a) the making of Restricted Payments permitted
under Section 8.12 hereof with respect to the Preferred Stock, and (b) the
transactions contemplated by the Cure Right pursuant to Section 9.7 of this
Agreement.

“Person” means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization or any other entity or
organization, including a government or agency or political subdivision thereof.

“Plan” means any employee pension benefit plan covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Code that
either (a) is maintained by a member of the Controlled Group for employees of a
member of the Controlled Group or (b) is maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one employer
makes contributions and to which a member of the Controlled Group is then making
or accruing an obligation to make contributions or has within the preceding five
plan years made contributions.

“Preferred Stock” means the Borrower’s Series A 15.0% Cumulative Non-Voting
Non-Convertible Preferred Stock, par value $1.00 per share.

 

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“Premises” means the real property owned or leased by the Borrower or any
Subsidiary, including without limitation the real property and improvements
thereon owned by the Borrower or any Subsidiary subject to the Lien of the
Mortgages or any other Collateral Documents.

“Property” means, as to any Person, all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in the
most recent balance sheet of such Person and its subsidiaries under GAAP.

“RCRA” means the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments
of 1984, 42 U.S.C. §§6901 et seq., and any future amendments.

“Reimbursement Obligation” is defined in Section 1.2(c) hereof.

“Related Party” means (a) any Person in which the Investor directly or
indirectly owns an equity interest, (b) any Person that is controlled by the
Investor, or (c) any Person that is controlled by a Person that is under common
control with the Investor; provided that, for the purpose of this definition any
Person that owns, directly or indirectly, 5% or more of the securities having
the ordinary voting power for the election of directors or governing body of a
corporation or 5% or more of the partnership or other ownership interest of any
other Person (other than as a limited partner of such other Person) will be
deemed to control such corporation or other Person.

“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, migration, dumping, or disposing
into the indoor or outdoor environment, including, without limitation, the
abandonment or discarding of barrels, drums, containers, tanks or other
receptacles containing or previously containing any Hazardous Material in any
manner or quantity contrary to, or otherwise potentially giving rise to
liability under, any Environmental Law.

“Required Lenders” means, as of the date of determination thereof, two or more
non-affiliated Lenders whose outstanding Loans and interests in Letters of
Credit and Unused Revolving Credit Commitments as of such date constitute more
than 50% of the sum of the total outstanding Loans, interests in Letters of
Credit and Unused Revolving Credit Commitments of the Lenders as of such date.

“Restricted Payments” is defined in Section 8.12.

“Revolver Percentage” means, for each Lender, the percentage of the Revolving
Credit Commitments represented by such Lender’s Revolving Credit Commitment or,
if the Revolving Credit Commitments have been terminated, the percentage held by
such Lender (including through participation interests in Reimbursement
Obligations) of the aggregate principal amount of all Revolving Loans and
L/C Obligations then outstanding.

“Revolving Credit” means the credit facility for making Revolving Loans and
issuing Letters of Credit described in Sections 1.1 and 1.2 hereof.

 

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“Revolving Credit Commitment” means, as to any Lender, the obligation of such
Lender to make Revolving Loans and to participate in Swing Loans and Letters of
Credit issued for the account of the Borrower hereunder in an aggregate
principal or face amount at any one time outstanding not to exceed the amount
set forth opposite such Lender’s name on Schedule 1 attached hereto and made a
part hereof, as the same may be reduced or modified at any time or from time to
time pursuant to the terms hereof. The Borrower and the Lenders acknowledge and
agree that the Revolving Credit Commitments of the Lenders aggregate
$130,000,000 on the date hereof.

“Revolving Credit Termination Date” means July 9, 2017, or such earlier date on
which the Revolving Credit Commitments are terminated in whole pursuant to
Section 1.12, 9.2 or 9.3 hereof.

“Revolving Loan” is defined in Section 1.1 hereof and, as so defined, includes a
Base Rate Loan or a Eurodollar Loan, each of which is a “type” of Revolving Loan
hereunder.

“Revolving Note” is defined in Section 1.10 hereof.

“S&P” means Standard & Poor’s Ratings Services Group, a division of The
McGraw-Hill Companies, Inc.

“Security Agreement” means that certain Fourth Amended and Restated Security
Agreement dated the date of this Agreement among the Borrower and the Guarantors
and the Administrative Agent, as the same may be amended, modified, supplemented
or restated from time to time.

“Subordinated Debt” means Indebtedness for Borrowed Money owing to any Person on
terms and conditions, and in such amounts, acceptable to the Administrative
Agent and the Required Lenders and which is subordinated in right of payment to
the prior payment in full of the Obligations pursuant to written subordination
provisions approved in writing by the Administrative Agent and the Required
Lenders.

“Subsidiary” means, as to any particular parent corporation or organization, any
other corporation or organization more than 50% of the outstanding Voting Stock
of which is at the time directly or indirectly owned by such parent corporation
or organization or by any one or more other entities which are themselves
subsidiaries of such parent corporation or organization, provided, however, that
a Joint Venture shall not be considered a Subsidiary. Unless otherwise expressly
noted herein, the term “Subsidiary” means a Subsidiary of the Borrower or of any
of its direct or indirect Subsidiaries.

“Swing Line” means the credit facility for making one or more Swing Loans
described in Section 1.14 hereof.

“Swing Line Sublimit” means $5,000,000, as reduced pursuant to the terms hereof.

“Swing Loan” and “Swing Loans” each is defined in Section 1.14 hereof.

 

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“Swing Note” is defined in Section 1.10 hereof.

“Total Consideration” means, the total amount (but without duplication) of
(a) cash paid in connection with any Acquisition, plus (b) indebtedness payable
to the seller in connection with such Acquisition, plus (c) the fair market
value of any equity securities, including any warrants or options therefor,
delivered in connection with any Acquisition, plus (d) the present value of
covenants not to compete entered into in connection with such Acquisition or
other future payments which are required to be made over a period of time and
are not contingent upon the Borrower or its Subsidiary meeting financial
performance objectives (exclusive of salaries paid in the ordinary course of
business) (discounted at the Base Rate), but only to the extent not included in
clause (a), (b) or (c) above, plus (e) the amount of indebtedness assumed in
connection with such Acquisition.

“Total Funded Debt” means, at any time the same is to be determined, the sum
(but without duplication) of (a) all Indebtedness for Borrowed Money of the
Borrower and its Subsidiaries at such time, plus (b) all Indebtedness for
Borrowed Money of any other Person which is directly or indirectly guaranteed by
the Borrower or any of its Subsidiaries or which the Borrower or any of its
Subsidiaries has agreed (contingently or otherwise) to purchase or otherwise
acquire or in respect of which the Borrower or any of its Subsidiaries has
otherwise assured a creditor against loss, plus (c) the maximum amount available
to be drawn under all letters of credit issued for the account of such Person
and all unpaid drawings in respect of such letters of credit.

“Total Leverage Ratio” is defined in Section 8.22 hereto.

“Unfunded Vested Liabilities” means, for any Plan at any time, the amount (if
any) by which the present value of all vested nonforfeitable accrued benefits
under such Plan exceeds the fair market value of all Plan assets allocable to
such benefits, all determined as of the then most recent valuation date for such
Plan, but only to the extent that such excess represents a potential liability
of a member of the Controlled Group to the PBGC or the Plan under Title IV of
ERISA.

“Unused Revolving Credit Commitments” means, at any time, the difference between
the Revolving Credit Commitments then in effect and the aggregate outstanding
principal amount of all Revolving Loans, Swing Loans and L/C Obligations,
provided that Swing Loans outstanding from time to time shall be deemed to
reduce the Unused Revolving Credit Commitment of the Administrative Agent for
purposes of computing the commitment fee under Section 2.1(a) hereof.

“U.S. Dollars” and “$” each means the lawful currency of the United States of
America.

“Voting Stock” of any Person means capital stock or other equity interests of
any class or classes (however designated) having ordinary power for the election
of directors or other similar governing body of such Person, other than stock or
other equity interests having such power only by reason of the happening of a
contingency.

“Welfare Plan” means a “welfare plan” as defined in Section 3(1) of ERISA.

 

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“Wholly-owned Subsidiary” means a Subsidiary of which all of the issued and
outstanding shares of capital stock (other than directors’ qualifying shares as
required by law) or other equity interests are owned by the Borrower and/or one
or more Wholly-owned Subsidiaries within the meaning of this definition.

Section 5.2. Interpretation. The foregoing definitions are equally applicable to
both the singular and plural forms of the terms defined. The words “hereof”,
“herein”, and “hereunder” and words of like import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. All references to time of day herein are references to Chicago,
Illinois, time unless otherwise specifically provided. Where the character or
amount of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, it shall be done in accordance with
GAAP except where such principles are inconsistent with the specific provisions
of this Agreement.

Section 5.3. Change in Accounting Principles. If, after the date of this
Agreement, there shall occur any change in GAAP from those used in the
preparation of the financial statements referred to in Section 6.5 hereof and
such change shall result in a change in the method of calculation of any
financial covenant, standard or term found in this Agreement, either the
Borrower or the Required Lenders may by notice to the Lenders and the Borrower,
respectively, require that the Lenders and the Borrower negotiate in good faith
to amend such covenants, standards, and terms so as equitably to reflect such
change in accounting principles, with the desired result being that the criteria
for evaluating the financial condition of the Borrower and its Subsidiaries
shall be the same as if such change had not been made. No delay by the Borrower
or the Required Lenders in requiring such negotiation shall limit their right to
so require such a negotiation at any time after such a change in accounting
principles. Until any such covenant, standard, or term is amended in accordance
with this Section 5.3, financial covenants shall be computed and determined in
accordance with GAAP in effect prior to such change in accounting principles.
Without limiting the generality of the foregoing, the Borrower shall neither be
deemed to be in compliance with any financial covenant hereunder nor out of
compliance with any financial covenant hereunder if such state of compliance or
noncompliance, as the case may be, would not exist but for the occurrence of a
change in accounting principles after the date hereof.

SECTION 6.    REPRESENTATIONS AND WARRANTIES.

The Borrower represents and warrants to the Administrative Agent and the Lenders
as follows:

Section 6.1. Organization and Qualification. The Borrower is duly organized,
validly existing, and in good standing as a corporation under the laws of the
State of Washington. The Borrower has full and adequate power to own its
Property and conduct its business as now conducted, and is duly licensed or
qualified and in good standing in each jurisdiction in which the nature of the
business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to do so would
not have a Material Adverse Effect.

 

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Section 6.2. Subsidiaries. Each Subsidiary is duly incorporated (or otherwise
organized if such Subsidiary is not a corporation), validly existing and in good
standing (to the extent the concept of good standing is applicable) under the
laws of the jurisdiction in which it is incorporated or organized, as the case
may be, has full and adequate power to own its Property and conduct its business
as now conducted, and is duly licensed or qualified and in good standing (to the
extent the concept of good standing is applicable in such jurisdiction) in each
jurisdiction in which the nature of the business conducted by it or the nature
of the Property owned or leased by it requires such licensing or qualifying,
except where the failure to do so would not have a Material Adverse Effect.
Schedule 6.2 hereto identifies each Subsidiary, the jurisdiction of its
incorporation or organization, as the case may be, the percentage of issued and
outstanding shares of each class of its capital stock or other equity interests
owned by the Borrower and its other Subsidiaries and, if such percentage is not
100% (excluding, if applicable, directors’ qualifying shares as required by
law), a description of each class of its authorized capital stock and other
equity interests and the number of shares of each class issued and outstanding.
All of the outstanding shares of capital stock and other equity interests of
each Subsidiary are validly issued and outstanding and fully paid and
nonassessable and all such shares and other equity interests indicated on
Schedule 6.2 as owned by the Borrower or another Subsidiary are owned,
beneficially and of record, by the Borrower or such Subsidiary free and clear of
all Liens other than the Liens granted in favor of the Administrative Agent
pursuant to the Collateral Documents. There are no outstanding commitments or
other obligations of any Subsidiary to issue, and no options, warrants or other
rights of any Person to acquire, any shares of any class of capital stock or
other equity interests of any Subsidiary.

Section 6.3. Authority and Validity of Obligations. The Borrower has full right
and authority to enter into this Agreement and the other Loan Documents executed
by it, to make the borrowings herein provided for or under the other Loan
Documents, to issue the Notes in evidence thereof, to grant to the
Administrative Agent the Liens described in the Collateral Documents, and to
perform all of its obligations hereunder and under the other Loan Documents
executed by it. Each Subsidiary has full right and authority to enter into the
Loan Documents executed by it, to guarantee the Obligations, Hedging Liability,
and Funds Transfer and Deposit Account Liability, to grant to the Administrative
Agent the Liens described in the Collateral Documents executed by such Person,
and to perform all of its obligations under the Loan Documents executed by it.
The Loan Documents delivered by the Borrower and its Subsidiaries have been duly
authorized, executed, and delivered by such Persons and constitute valid and
binding obligations of the Borrower and its Subsidiaries enforceable against
them in accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
creditors’ rights generally and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding in
equity or at law); and this Agreement and the other Loan Documents do not, nor
does the performance or observance by the Borrower or any Subsidiary of any of
the matters and things herein or therein provided for, (a) contravene or
constitute a default under any provision of law or any judgment, injunction,
order or decree binding upon the Borrower or any Subsidiary or any provision of
the organizational documents (e.g., charter, articles of incorporation or
by-laws, articles of association or operating agreement, partnership agreement,
or other similar document) of the Borrower or any Subsidiary, (b) contravene or
constitute a default under any covenant, indenture or agreement of or affecting
the Borrower or any Subsidiary or any of its Property, in

 

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each case where such contravention or default, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect or (c) result in
the creation or imposition of any Lien on any Property of the Borrower or any
Subsidiary other than the Liens granted in favor of the Administrative Agent
pursuant to the Collateral Documents.

Section 6.4. Use of Proceeds; Margin Stock. The Borrower shall use the proceeds
of the Loans to refinance existing indebtedness, to redeem the Borrower’s
Preferred Stock, for their general working capital purposes, to finance capital
expenditures, to fund certain fees and expenses associated with the negotiation,
documentation, closing and syndication of the credit facilities provided to the
Borrower under the Loan Documents and for such other legal and proper purposes
as are consistent with all applicable laws. Neither the Borrower nor any
Subsidiary is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System), and no part of the proceeds
of any Loan or any other extension of credit made hereunder will be used to
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock. Margin stock (as
hereinabove defined) constitutes less than 25% of the assets of the Borrower and
its Subsidiaries which are subject to any limitation on sale, pledge or other
restriction hereunder.

Section 6.5. Financial Reports. The consolidated balance sheet of the Borrower
and its Subsidiaries as at August 31, 2011, and the related consolidated
statements of income, retained earnings and cash flows of the Borrower and its
Subsidiaries for the fiscal year then ended, and accompanying notes thereto,
which financial statements are accompanied by the audit report of Ernst & Young,
LLP, independent public accountants, and the unaudited interim consolidated
balance sheet of the Borrower and its Subsidiaries as at May 31, 2012, and the
related consolidated statements of income, retained earnings and cash flows of
the Borrower and its Subsidiaries for the 6 months then ended, heretofore
furnished to the Administrative Agent and the Lenders, fairly present the
consolidated financial condition of the Borrower and its Subsidiaries as at said
dates and the consolidated results of their operations and cash flows for the
periods then ended in conformity with GAAP applied on a consistent basis and
disclose or reflect all its actual and contingent liabilities at that date.
Neither the Borrower nor any Subsidiary has contingent liabilities which are
material to it other than as indicated on such financial statements or, with
respect to future periods, on the financial statements furnished pursuant to
Section 8.5 hereof.

Section 6.6. No Material Adverse Change. Since August 31, 2011, there has been
no Material Adverse Effect.

Section 6.7. Full Disclosure. The statements and information furnished to the
Administrative Agent and the Lenders in connection with the negotiation of this
Agreement and the other Loan Documents and the commitments by the Lenders to
provide all or part of the financing contemplated hereby or by the other Loan
Documents do not contain any untrue statements of a material fact or omit a
material fact necessary to make the material statements contained herein or
therein not misleading, the Administrative Agent and the Lenders acknowledging
that as to any projections furnished to the Administrative Agent and the
Lenders, the Borrower only represents that the same were prepared on the basis
of information and estimates the Borrower believed to be reasonable.

 

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Section 6.8. Trademarks, Franchises, and Licenses. The Borrower and its
Subsidiaries own, possess, or have the right to use all necessary patents,
licenses, franchises, trademarks, trade names, trade styles, copyrights, trade
secrets, know how, and confidential commercial and proprietary information to
conduct their businesses as now conducted, without known conflict with any
patent, license, franchise, trademark, trade name, trade style, copyright or
other proprietary right of any other Person which could reasonably be expected
to have a Material Adverse Effect.

Section 6.9. Governmental Authority and Licensing. The Borrower and its
Subsidiaries have received all licenses, permits, and approvals of all federal,
state, and local governmental authorities, if any, necessary to conduct their
businesses, in each case where the failure to obtain or maintain the same could
reasonably be expected to have a Material Adverse Effect. No investigation or
proceeding which, if adversely determined, could reasonably be expected to
result in revocation or denial of any material license, permit or approval is
pending or, to the knowledge of the Borrower, threatened.

Section 6.10. Good Title. The Borrower and its Subsidiaries have good and
defensible title (or valid leasehold interests) to their assets as reflected on
the most recent consolidated balance sheet of the Borrower and its Subsidiaries
furnished to the Administrative Agent and the Lenders (except for sales of
assets in the ordinary course of business), subject to no Liens other than such
thereof as are permitted by Section 8.8 hereof.

Section 6.11. Litigation and Other Controversies. Except as disclosed in filings
with the Securities and Exchange Commission made by the Borrower before the
Closing Date or which are being contested in good faith and by appropriate
proceedings which prevent enforcement of the matter under contest and as to
which adequate reserves established in accordance with GAAP have been provided,
there is no litigation or governmental or arbitration proceeding or labor
controversy pending, nor to the knowledge of the Borrower threatened, against
the Borrower or any Subsidiary or any of its Property which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.

Section 6.12. Taxes. All tax returns required to be filed by the Borrower or any
Subsidiary in any jurisdiction have, in fact, been filed, and all taxes,
assessments, fees, and other governmental charges upon the Borrower or any
Subsidiary or upon any of its Property, income or franchises, which are shown to
be due and payable in such returns, have been paid, except such taxes,
assessments, fees and governmental charges, if any, as are being contested in
good faith and by appropriate proceedings which prevent enforcement of the
matter under contest and as to which adequate reserves established in accordance
with GAAP have been provided. The Borrower does not know of any proposed
additional tax assessment against it or its Subsidiaries for which adequate
provisions in accordance with GAAP have not been made on their accounts.
Adequate provisions in accordance with GAAP for taxes on the books of the
Borrower and each Subsidiary have been made for all open years, and for its
current fiscal period.

 

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Section 6.13. Approvals. No authorization, consent, license or exemption from,
or filing or registration with, any court or governmental department, agency or
instrumentality, nor any approval or consent of any other Person, is or will be
necessary to the valid execution, delivery or performance by the Borrower or any
Subsidiary of any Loan Document, except for such approvals which have been
obtained prior to the date of this Agreement and remain in full force and
effect.

Section 6.14. Affiliate Transactions. Neither the Borrower nor any Subsidiary is
a party to any contracts or agreements with any of its Affiliates (other than
with Wholly-owned Subsidiaries) on terms and conditions which are less favorable
to the Borrower or such Subsidiary than would be usual and customary in similar
contracts or agreements between Persons not affiliated with each other, provided
that the foregoing shall not apply to any Permitted Transaction.

Section 6.15. Investment Company. Neither the Borrower nor any Subsidiary is an
“investment company” or a company “controlled” by an “investment company” within
the meaning of the Investment Company Act of 1940, as amended.

Section 6.16. ERISA. The Borrower and each other member of its Controlled Group
has fulfilled its obligations under the minimum funding standards of and is in
compliance in all material respects with ERISA and the Code to the extent
applicable to it and has not incurred any liability to the PBGC or a Plan under
Title IV of ERISA other than a liability to the PBGC for premiums under
Section 4007 of ERISA. Except as disclosed in the Borrower’s Form 10-K dated
November 13, 2009, neither the Borrower nor any Subsidiary has any contingent
liabilities with respect to any post-retirement benefits under a Welfare Plan,
other than liability for continuation coverage described in article 6 of Title I
of ERISA.

Section 6.17. Compliance with Laws. (a) The Borrower and its Subsidiaries are in
compliance with the requirements of all federal, state and local laws, rules and
regulations applicable to or pertaining to their Property or business operations
(including, without limitation, the Occupational Safety and Health Act of 1970,
the Americans with Disabilities Act of 1990, and laws and regulations
establishing quality criteria and standards for air, water, land and toxic or
hazardous wastes and substances), where any such non-compliance, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.

(b) Without limiting the representations and warranties set forth in
Section 6.17(a) above, except for such matters, individually or in the
aggregate, which could not reasonably be expected to result in a Material
Adverse Effect, the Borrower represents and warrants that:

(i) the Borrower and its Subsidiaries, and each of the Premises, comply in all
material respects with all applicable Environmental Laws;

(ii) the Borrower and its Subsidiaries have obtained all governmental approvals
required for their operations and each of the Premises by any applicable
Environmental Law;

 

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(iii) the Borrower and its Subsidiaries have not, and the Borrower has no
knowledge of any other Person who has, caused any Release, threatened Release or
unlawful disposal of any Hazardous Material at, on, about, or off any of the
Premises in any material quantity, which could reasonably be expected to have a
Material Adverse Effect, and, to the knowledge of the Borrower, none of the
Premises are adversely affected by any Release, threatened Release or unlawful
disposal of a Hazardous Material originating or emanating from any other
property;

(iv) to the Borrower’s knowledge, none of the Premises contain and have
contained any: (1) underground storage tank, which could reasonably be expected
to have a Material Adverse Effect, (2) material amounts of asbestos containing
building material, which could reasonably be expected to have a Material Adverse
Effect, (3) landfills or dumps, (4) hazardous waste management facility as
defined pursuant to RCRA or any comparable state law or any Environmental Law of
any jurisdiction in which any of the Borrower’s or Subsidiary’s assets are
located, or (5) site on or nominated for the National Priority List promulgated
pursuant to CERCLA or any state remedial priority list promulgated or published
pursuant to any comparable state law;

(v) the Borrower and its Subsidiaries have not used a material quantity of any
Hazardous Material and have conducted no Hazardous Material Activity at any of
the Premises, in each case, except in compliance with Environmental Laws;

(vi) the Borrower and its Subsidiaries have no material liability for response
or corrective action, natural resource damage or other harm pursuant to CERCLA,
RCRA or any comparable state law or any Environmental Law of any jurisdiction in
which any of the Borrower’s or Subsidiary’s assets are located;

(vii) the Borrower and its Subsidiaries are not subject to, have no notice or
knowledge of and are not required to give any notice of any Environmental Claim
involving the Borrower or any Subsidiary or any of the Premises, and there are
no conditions or occurrences at any of the Premises which could reasonably be
anticipated to form the basis for an Environmental Claim against the Borrower or
any Subsidiary or such Premises which it adversely determined would have a
Material Adverse Effect;

(viii) none of the Premises are subject to any, and the Borrower has no
knowledge of any imminent restriction on the ownership, occupancy, use or
transferability of the Premises in connection with any (1) Environmental Law or
(2) Release, threatened Release or disposal of a Hazardous Material; and

(ix) there are no conditions or circumstances at any of the Premises which pose
an unreasonable risk to the environment or the health or safety of Persons.

Notwithstanding any other provision of this Agreement, this Section 6.17(b)
shall not apply to the extent that: (i) neither Borrower nor any of its
Subsidiaries has any ownership interest in a particular Premises; (ii) such
Premises are not within the care, custody or control of either the Borrower or
any of its Subsidiaries; (iii) neither the Borrower nor any of its Subsidiaries
has

 

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conducted or authorized any Hazardous Material Activity on or at such Premises;
and (iv) neither the Borrower nor any of its Subsidiaries has caused or
contributed to any Environmental Claim related to such Premises.

Section 6.18. Other Agreements. Neither the Borrower nor any Subsidiary is in
default under the terms of any covenant, indenture or agreement of or affecting
such Person or any of its Property, which default if uncured could reasonably be
expected to have a Material Adverse Effect.

Section 6.19. Solvency. The Borrower and its Subsidiaries are solvent, able to
pay their debts as they become due, and have sufficient capital to carry on
their business and all businesses in which they are about to engage.

Section 6.20. No Default. No Default or Event of Default has occurred and is
continuing.

Section 6.21. OFAC. (a) The Borrower is in compliance with the requirements of
all OFAC Sanctions Programs applicable to it, (b) each Subsidiary of the
Borrower is in compliance with the requirements of all OFAC Sanctions Programs
applicable to such Subsidiary, (c) the Borrower has provided to the
Administrative Agent, the L/C Issuer, and the Lenders all information regarding
the Borrower and its Affiliates and Subsidiaries necessary for the
Administrative Agent, the L/C Issuer, and the Lenders to comply with all
applicable OFAC Sanctions Programs, and (d) to the best of the Borrower’s
knowledge, neither the Borrower nor any of its Affiliates or Subsidiaries is, as
of the date hereof, named on the current OFAC SDN List.

SECTION 7.    CONDITIONS PRECEDENT.

The obligation of each Lender to advance, continue or convert any Loan (other
than the continuation of, or conversion into, a Base Rate Loan) or of the L/C
Issuer to issue, extend the expiration date (including by not giving notice of
non-renewal) of or increase the amount of any Letter of Credit under this
Agreement, shall be subject to the following conditions precedent:

Section 7.1. All Credit Events. At the time of each Credit Event hereunder:

(a) each of the representations and warranties set forth herein and in the other
Loan Documents shall be and remain true and correct as of said time, except to
the extent the same expressly relate to an earlier date;

(b) no Default or Event of Default shall have occurred and be continuing or
would occur as a result of such Credit Event;

(c) in the case of a Borrowing the Administrative Agent shall have received the
notice required by Section 1.5 hereof, in the case of the issuance of any Letter
of Credit the L/C Issuer shall have received a duly completed Application for
such Letter of Credit together with any fees called for by Section 2.1 hereof,
and, in the case of an extension or increase in the amount of a Letter of
Credit, a written request therefor in a form acceptable to the L/C Issuer
together with fees called for by Section 2.1 hereof;

 

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(d) after giving effect to such extension of credit, the aggregate principal
amount of all Revolving Loans, Swing Loans and Letters of Credit outstanding
under this Agreement shall not exceed the Revolving Credit Commitments then in
effect;

(e) after giving effect to such extension of credit, the aggregate amount of all
Letters of Credit issued shall not exceed the L/C Sublimit; and

(f) such Credit Event shall not violate any order, judgment or decree of any
court or other authority or any provision of law or regulation applicable to the
Administrative Agent, the L/C Issuer, or any Lender (including, without
limitation, Regulation U of the Board of Governors of the Federal Reserve
System) as then in effect;

Each request for a Borrowing hereunder and each request for the issuance of,
increase in the amount of, or extension of the expiration date of, a Letter of
Credit shall be deemed to be a representation and warranty by the Borrower on
the date on such Credit Event as to the facts specified in subsections (a)
through (e), both inclusive, of this Section.

Section 7.2. Initial Credit Event. Before or concurrently with the initial
Credit Event:

(a) the Administrative Agent shall have received for each Lender the favorable
written opinion of Perkins Coie LLP, counsel to the Borrower and each Domestic
Subsidiary, in substantially the forms of Exhibit H hereto, and otherwise in
form and substance satisfactory to the Required Lenders;

(b) the Administrative Agent shall have received for each Lender (i) certified
copies of resolutions of the Board of Directors of the Borrower and each
Guarantor authorizing the execution, delivery and performance of the Loan
Documents, indicating the Borrower’s and each Guarantor’s authorized signers of
the Loan Documents and all other documents relating thereto and the specimen
signatures of such signers and (ii) copies of the Borrower’s and each
Guarantor’s Certificate of Incorporation and by-laws certified by the Secretary
or other appropriate officer of the Borrower or such Guarantor;

(c) the Administrative Agent shall have received for each Lender this Agreement
duly executed by the Borrower, each Guarantor and the Lenders;

(d) the Administrative Agent shall have received for each applicable Lender such
Lender’s duly executed Notes of the Borrower dated the date hereof and otherwise
in compliance with the provisions of Section 1.10 hereof;

(e) the Administrative Agent shall have received the Security Agreement and
supplements in form and substance satisfactory to the Administrative Agent to
each of the Mortgages, duly executed by the Borrower and its Domestic
Subsidiaries, together with (i) original stock certificates or other similar
instruments or securities representing

 

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all of the issued and outstanding shares of capital stock or other equity
interests in each Subsidiary as required pursuant to Section 4 of this
Agreement, and (ii) stock powers for the Collateral consisting of the stock or
other equity interest in each Guarantor executed in blank and undated;

(f) the Administrative Agent shall have received evidence of insurance required
to be maintained under the Loan Documents, naming the Administrative Agent as
mortgagee, loss payee and additional insured;

(g) the Administrative Agent shall have received for each Lender copies of the
certificates of good standing for the Borrower and each Guarantor, dated no
earlier than 30 days prior to the date hereof from the office of the secretary
of the state of its incorporation or organization and of each state in which it
is qualified to do business as a foreign corporation or organization;

(h) the Administrative Agent shall have received for each Lender a list of the
Borrower’s Authorized Representatives;

(i) concurrently with the initial Credit Events hereunder the Borrower shall
redeem all of its issued and outstanding Preferred Stock;

(j) the Borrower shall have Unused Revolving Credit Commitments in an amount not
less than $20,000,000 after giving effect to the initial Loans and Letters of
Credit outstanding hereunder;

(k) each Lender shall have received such evaluations and certifications as it
may reasonably require (including a compliance certificate in the forms attached
hereto as Exhibit E containing calculations of the compliance calculations of
the financial covenants as of May 31, 2012) in order to satisfy itself as to the
value of the Collateral, the financial condition of the Borrower and its
Subsidiaries, and the lack of material contingent liabilities of the Borrower
and its Subsidiaries;

(l) the Administrative Agent shall have received financing statement, tax, and
judgment lien search results against the Property of the Borrower and each
Guarantor evidencing the absence of Liens on its Property except as permitted by
Section 8.8 hereof;

(m) the Administrative Agent shall have received for the account of the Lenders
such other agreements, instruments, resolutions, documents (including documents
relating to tax and regulatory maters), certificates, information and opinions
as the Administrative Agent may reasonably request;

(n) the Administrative Agent shall have received evidence satisfactory thereto
that, as of May 31, 2012, (x) the Borrower’s EBITDA for the twelve consecutive
months then ended is not less than $23,000,000 and (y) the Total Leverage Ratio
is less than 3.75 to 1.0, in each case calculated on the basis of the Borrower’s
EBITDA for the twelve

 

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consecutive months ended May 31, 2012, and the Borrower’s Total Funded Debt
outstanding on the Closing Date after giving effect to the initial Credit Event
hereunder and the redemption of the Borrower’s Preferred Stock on the Closing
Date;

(o) the Administrative Agent shall have received audited annual consolidated and
consolidating financial statements and quarterly unaudited consolidated and
consolidating financial statements (including in each case consolidated and
consolidating balance sheets and consolidated and consolidating statements of
income and cash flows) of the Borrower for the three consecutive fiscal years
ended August 31, 2009, August 31, 2010, and August 31, 2011, projected financial
statements for the fiscal years ending August 31, 2012, August 31,
2013, August 31, 2014, August 31, 2015 and August 31, 2016, and a closing
balance sheet adjusted to give effect to the initial Credit Events hereunder and
the redemption of the Borrower’s Preferred Stock, each in form and substance
acceptable to the Administrative Agent;

(p) no material adverse change in the business, condition (financial or
otherwise), operations, performance, Properties or prospects of the Borrower,
any of its Subsidiaries or any Guarantor from that reflected in the Borrower’s
audited financial statements for the fiscal year ended August 31, 2011 shall
have occurred;

(q) the Administrative Agent shall have received for itself and for the Lenders
the initial fees owed to them;

(r) the Administrative Agent shall have received a survey in form and substance
acceptable to the Administrative Agent prepared by a licensed surveyor on each
parcel of real property subject to the Lien of the Mortgages, which survey shall
also state whether or not any portion of the real property is in a federally
designated flood hazard area;

(s) the Administrative Agent shall have received an environmental questionnaire
and an EDR report acceptable to the Administrative Agent concerning the
environmental hazards and matters with respect to the parcels of real property
subject to the Lien of the Mortgages;

(t) the Administrative Agent shall have received a report indicating whether any
portion of the real property subject to the Lien of the Mortgages is in a
federally designated flood hazard area;

(u) the Borrower shall have paid the Administrative Agent all reasonable, actual
out-of-pocket fees and expenses of counsel to the Administrative Agent for which
an invoice has been submitted to the Borrower;

(v) the Borrower shall have repaid in full (i) all outstanding Loans together
with accrued and unpaid interest thereon, (ii) all accrued and unpaid unused
commitment fees owed to the Lenders under Section 2.1(a) of the Original Credit
Agreement, and (iii) all amounts payable under Section 1.11 of the Original
Credit Agreement as a result of all of the foregoing repayments;

 

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(w) the Administrative Agent shall have received a fully executed Internal
Revenue Service Form W-9 for the Borrower and each Guarantor (or any similar
form for each foreign entity) and the Administrative Agent and the Lenders all
documentation and other information required by bank regulatory authorities
under applicable “know-your-customer” and anti-money laundering rules and
regulations, including the Patriot Act and all applicable OFAC Sanctions
Programs; and

(x) the Administrative Agent shall have received from the Borrower written
instructions as to the disbursement and application of the proceeds of the
initial Loans made hereunder.

SECTION 8.    COVENANTS.

The Borrower agrees that, so long as any credit is available to or in use by the
Borrower hereunder, except to the extent compliance in any case or cases is
waived in writing pursuant to the terms of Section 13.13 hereof:

Section 8.1. Maintenance of Business. The Borrower shall, and shall cause each
Subsidiary other than Penford Export Corporation, Penford Holdings Pty. Ltd. and
Penford Australia Limited to, preserve and maintain its existence and
registration in the place of its registration at the date of this Agreement,
except as otherwise provided in Section 8.10(c) hereof. The Borrower shall, and
shall cause each Subsidiary other than Penford Export Corporation, Penford
Holdings Pty. Ltd. and Penford Australia Limited to, preserve and keep in force
and effect all licenses, permits, consents, authorizations, exemptions, except
as otherwise provided in Section 8.10(c) hereof. The Borrower shall, and shall
cause each Subsidiary other than Penford Export Corporation, Penford Holdings
Pty. Ltd. and Penford Australia Limited to, preserve and keep in force and
effect all licenses, permits, franchises, approvals, patents, trademarks, trade
names, trade styles, copyrights, and other proprietary rights necessary to the
proper conduct of its business where the failure to do so could reasonably be
expected to have a Material Adverse Effect.

Section 8.2. Maintenance of Properties. The Borrower shall, and shall cause each
Subsidiary to, maintain, preserve, and keep its property, plant, and equipment
in good repair, working order and condition (ordinary wear and tear excepted),
and shall from time to time make all needful and proper repairs, renewals,
replacements, additions, and betterments thereto so that at all times the
efficiency thereof shall be fully preserved and maintained, except to the extent
that, in the reasonable business judgment of such Person, any such Property is
no longer necessary for the proper conduct of the business of such Person.

Section 8.3. Taxes and Assessments. The Borrower shall duly pay and discharge,
and shall cause each Subsidiary to duly pay and discharge, all taxes, rates,
assessments, fees, and governmental charges upon or against it or its Property,
in each case before the same become delinquent and before penalties accrue
thereon, unless and to the extent that the same are being contested in good
faith and by appropriate proceedings which prevent enforcement of the matter
under contest and adequate reserves are provided therefor.

 

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Section 8.4. Insurance. The Borrower shall insure and keep insured, and shall
cause each Subsidiary to insure and keep insured, with reputable, good and
responsible insurance companies, all insurable Property owned by it which is of
a character usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in such
amounts, as are insured by Persons similarly situated and operating like
Properties; and the Borrower shall insure, and shall cause each Subsidiary to
insure, such other hazards and risks (including, without limitation, employers’
and public liability risks) with reputable, good and responsible insurance
companies as and to the extent usually insured by Persons similarly situated and
conducting similar businesses. The Borrower shall in any event maintain, and
cause each Subsidiary to maintain, insurance on the Collateral to the extent
required by the Collateral Documents. The Borrower shall, upon the request of
the Administrative Agent, furnish to the Administrative Agent and the Lenders a
certificate setting forth in summary form the nature and extent of the insurance
maintained pursuant to this Section and the other Loan Documents.

Section 8.5. Financial Reports. The Borrower shall, and shall cause each
Subsidiary to, maintain a standard system of accounting in accordance with GAAP
and shall furnish to the Administrative Agent, each Lender and each of their
duly authorized representatives such information respecting the business and
financial condition of the Borrower and each Subsidiary as the Administrative
Agent or such Lender may reasonably request; and without any request, shall
furnish to the Administrative Agent and the Lenders:

(a) as soon as available, and in any event within forty-five (45) days after the
close of each of the first three (3) fiscal quarters of each fiscal year of the
Borrower, a copy of the consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries as of the last day of such fiscal quarter and the
consolidated and consolidating statements of income, retained earnings, and cash
flows of the Borrower and its Subsidiaries for the fiscal quarter and for the
fiscal year to date period then ended, each in reasonable detail showing in
comparative form the figures for the corresponding date and period in the
previous fiscal year, prepared by the Borrower in accordance with GAAP (subject
to the absence of footnote disclosures and year end audit adjustments) and
certified to by its chief financial officer or another officer of the Borrower
acceptable to the Administrative Agent;

(b) as soon as available, and in any event within ninety (90) days after the
close of each fiscal year of the Borrower, a copy of the consolidated and
consolidating balance sheet of the Borrower and its Subsidiaries as of the last
day of the fiscal year then ended and the consolidated and consolidating
statements of income, retained earnings, and cash flows of the Borrower and its
Subsidiaries for the fiscal year then ended, and accompanying notes thereto,
each in reasonable detail showing in comparative form the figures for the
previous fiscal year, accompanied in the case of the consolidated financial
statements by an unqualified opinion of KPMG or another firm of independent
public accountants of recognized national or international standing, selected by
the Borrower

 

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and reasonably satisfactory to the Administrative Agent and the Required
Lenders, to the effect that the consolidated financial statements have been
prepared in accordance with GAAP and present fairly in accordance with GAAP the
consolidated financial condition of the Borrower and its Subsidiaries as of the
close of such fiscal year and the results of their operations and cash flows for
the fiscal year then ended and that an examination of such accounts in
connection with such financial statements has been made in accordance with
generally accepted auditing standards and, accordingly, such examination
included such tests of the accounting records and such other auditing procedures
as were considered necessary in the circumstances;

(c) within the period provided in subsection (b) above, the written statement of
the accountants who certified the audit report thereby required that in the
course of their audit they have obtained no knowledge of any Default or Event of
Default, or, if such accountants have obtained knowledge of any such Default or
Event of Default, they shall disclose in such statement the nature and period of
the existence thereof;

(d) promptly after receipt thereof, any additional written reports, management
letters or other detailed information contained in writing concerning
significant aspects of the Borrower’s or any Subsidiary’s operations and
financial affairs given to it by its independent public accountants;

(e) promptly after the sending or filing thereof, copies of each financial
statement, report, notice or proxy statement sent by the Borrower or any
Subsidiary to its stockholders or other equity holders, and copies of each
annual return, regular, periodic or special report, registration statement,
investment statement or prospectus (including all Form 10-K, Form 10-Q and Form
8-K reports) or equivalent document filed by the Borrower or any Subsidiary with
any securities exchange, or the Securities and Exchange Commission or any
successor agency, provided however, that the obligations under this clause
(e) shall not apply to the extent that any such document is available on the
EDGAR website so long as the Borrower shall have given the Administrative Agent
prior notice (which shall contain an electronic link to the location on EDGAR
where such forms are located) of such availability on EDGAR in connection with
each delivery;

(f) promptly after receipt thereof, a copy of each audit made by any regulatory
agency of the books and records of the Borrower or any Subsidiary or of notice
of any material noncompliance with any applicable law, regulation or guideline
relating to the Borrower or any Subsidiary, or its business to the extent not
publicly available (provided that, with respect to items that are publicly
available, the Borrower shall have given the Administrative Agent prior notice
(which shall contain an electronic link to the location where such items are
located) of such availability) and other than tax audits in the ordinary course
of business;

(g) as soon as available, and in any event within forty-five (45) days after the
end of each fiscal year of the Borrower, a copy of the Borrower’s consolidated
and consolidating operating budget for the following fiscal year, such operating
budget to show the Borrower’s projected consolidated and consolidating revenues,
expenses and

 

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balance sheet on a quarter-by-quarter basis, such operating budget to be in
reasonable detail prepared by the Borrower and in form satisfactory to the
Administrative Agent and the Required Lenders (which shall include a summary of
all assumptions made in preparing such operating budget);

(h) promptly after the occurrence thereof, written notice of any Change of
Control;

(i) promptly after knowledge thereof shall have come to the attention of any
responsible officer of the Borrower, written notice of (i) any threatened or
pending litigation or governmental or arbitration proceeding or labor
controversy against the Borrower or any Subsidiary which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect,
(ii) the occurrence of any Default or Event of Default hereunder and (iii) the
occurrence of any event described as an “Event of Default” under any other Loan
Document; and

(j) with each of the financial statements furnished to the Lenders pursuant to
subsections (a) and (b) above, a written certificate in the form attached hereto
as Exhibit E signed by the chief financial officer of the Borrower or another
officer of the Borrower acceptable to the Administrative Agent to the effect
that to the best of such officer’s knowledge and belief no Default or Event of
Default has occurred during the period covered by such statements or, if any
such Default or Event of Default has occurred during such period, setting forth
a description of such Default or Event of Default and specifying the action, if
any, taken by the Borrower or any Subsidiary to remedy the same. Such
certificate shall also set forth the calculations supporting such statements in
respect of Section 8.22 hereof.

Section 8.6. Inspection. The Borrower shall, and shall cause each Subsidiary to,
permit the Administrative Agent, each Lender, and each of their duly authorized
representatives and agents to visit and inspect any of its Property, corporate
books, and financial records, to examine and make copies of its books of
accounts and other financial records, and to discuss its affairs, finances, and
accounts with, and to be advised as to the same by, its officers, employees and
independent public accountants (and by this provision the Borrower hereby
authorizes such accountants to discuss with the Administrative Agent and such
Lenders the finances and affairs of the Borrower and its Subsidiaries) at such
reasonable times and intervals as the Administrative Agent or any such Lender
may designate and, so long as no Default or Event of Default exists, with
reasonable prior notice to the Borrower.

 

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Section 8.7. Borrowings and Guaranties. The Borrower shall not, nor shall it
permit any Subsidiary to, issue, incur, assume, create or have outstanding any
Indebtedness for Borrowed Money, or be or become liable as endorser, guarantor,
surety or otherwise for any debt, obligation or undertaking of any Person other
than themselves (including the Borrower or any Subsidiary of the Borrower), or
otherwise agree to provide funds for payment of the obligations of any Person
(including the Borrower or any Subsidiary of the Borrower), or supply funds
thereto or invest therein or otherwise assure a creditor of any Person other
than themselves (including the Borrower or any Subsidiary of the Borrower)
against loss, or apply for or become liable to the issuer of a letter of credit
which supports an obligation of another, or subordinate any claim or demand it
may have to the claim or demand of any other Person; provided, however, that the
foregoing shall not restrict nor operate to prevent:

(a) the Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability of the Borrower and its Subsidiaries owing to the Administrative Agent
or the Lenders (and their Affiliates);

(b) purchase money indebtedness and Capitalized Lease Obligations of the
Borrower and its Subsidiaries in an amount not to exceed $10,000,000 in the
aggregate at any one time outstanding;

(c) obligations of the Borrower arising out of interest rate, commodity and
foreign currency hedging agreements entered into with financial institutions in
the ordinary course of business and not for speculative purposes;

(d) endorsement of items for deposit or collection of commercial paper received
in the ordinary course of business;

(e) indebtedness from time to time owing by any Subsidiary to the Borrower (the
“Intercompany Indebtedness”);

(f) unsecured indebtedness of the Borrower’s Subsidiaries to the Iowa Department
of Economic Development in an amount not to exceed $2,000,000 in the aggregate
at any one time outstanding; and

(g) unsecured Indebtedness for Borrowed Money of the Borrower not otherwise
permitted by this Section in an amount not to exceed $10,000,000 in the
aggregate at any one time outstanding.

Section 8.8. Liens. The Borrower shall not, nor shall it permit any Subsidiary
to, create, incur or permit to exist any Lien of any kind on any Property owned
by any such Person; provided, however, that the foregoing shall not apply to nor
operate to prevent:

(a) Liens arising by statute in connection with worker’s compensation,
unemployment insurance, old age benefits, social security obligations, taxes,
assessments, statutory obligations or other similar charges (other than Liens
arising under ERISA), good faith cash deposits in connection with tenders,
contracts or leases to which the Borrower or any Subsidiary is a party or other
cash deposits required to be made in the ordinary course of business, provided
in each case that the obligation is not for borrowed money and that the
obligation secured is not overdue or, if overdue, is being contested in good
faith by appropriate proceedings which prevent enforcement of the matter under
contest and adequate reserves have been established therefor;

(b) mechanics’, workmen’s, materialmen’s, landlords’, carriers’ or other similar
Liens arising in the ordinary course of business with respect to obligations
which are not due or which are being contested in good faith by appropriate
proceedings which prevent enforcement of the matter under contest;

 

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(c) judgment liens and judicial attachment liens not constituting an Event of
Default under Section 9.1(g) hereof and the pledge of assets for the purpose of
securing an appeal, stay or discharge in the course of any legal proceeding,
provided that the aggregate amount of such judgment liens and attachments and
liabilities of the Borrower and its Subsidiaries secured by a pledge of assets
permitted under this subsection, including interest and penalties thereon, if
any, shall not be in excess of $5,000,000 at any one time outstanding;

(d) Liens on property of the Borrower or any Subsidiary created solely for the
purpose of securing indebtedness permitted by Section 8.7(b) hereof,
representing or incurred to finance the purchase price of such Property,
provided that no such Lien shall extend to or cover other Property of the
Borrower or such Subsidiary other than the respective Property so acquired, and
the principal amount of indebtedness secured by any such Lien shall at no time
exceed the purchase price of such Property, as reduced by repayments of
principal thereon;

(e) any interest or title of a lessor under any operating lease;

(f) easements, rights-of-way, restrictions, and other similar encumbrances
against real property incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not materially detract
from the value of the Property subject thereto or materially interfere with the
ordinary conduct of the business of the Borrower or any Subsidiary;

(g) the Liens granted in favor of the Administrative Agent pursuant to the
Collateral Documents; and

(h) Liens not otherwise permitted hereby securing obligations not exceeding
$5,000,000 at any time.

Section 8.9. Investments, Acquisitions, Loans and Advances. The Borrower shall
not, nor shall it permit any Subsidiary to, directly or indirectly, make, retain
or have outstanding any investments (whether through purchase of stock or
obligations or otherwise) in, or loans or advances to any other Person, or
acquire all or any substantial part of the assets or business of any other
Person or division thereof; provided, however, that the foregoing shall not
apply to nor operate to prevent:

(a) investments in direct obligations of the United States of America or of any
agency or instrumentality thereof whose obligations constitute full faith and
credit obligations of the United States of America, provided that any such
obligations shall mature within one year of the date of issuance thereof;

 

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(b) investments in commercial paper rated at least P-1 by Moody’s and at least
A-1 by S&P maturing within one year of the date of issuance thereof;

(c) investments in certificates of deposit issued by any Lender or by any United
States commercial bank having capital and surplus of not less than $100,000,000
which have a maturity of one year or less;

(d) investments in repurchase obligations with a term of not more than 7 days
for underlying securities of the types described in subsection (a) above entered
into with any bank meeting the qualifications specified in subsection (c) above,
provided all such agreements require physical delivery of the securities
securing such repurchase agreement, except those delivered through the Federal
Reserve Book Entry System;

(e) investments in money market funds that invest solely, and which are
restricted by their respective charters to invest solely, in investments of the
type described in the immediately preceding subsections (a), (b), (c), and
(d) above;

(f) the Borrower’s investments in its Subsidiaries existing on the Closing Date,
and investments made from time to time by a Subsidiary in one or more of its
Subsidiaries;

(g) intercompany advances made from time to time (i) by the Borrower or a
Domestic Subsidiary to another Domestic Subsidiary, (ii) by the Borrower or any
Domestic Subsidiary to a Foreign Subsidiary before the date of this Agreement
and outstanding on the date of this Agreement, and (iii) by a Domestic
Subsidiary to the Borrower or to any one or more of its Domestic Subsidiaries in
the ordinary course of business to finance working capital needs;

(h) other investments (including investments in Joint Ventures), loans, and
advances in addition to those otherwise permitted by this Section in an amount
not to exceed $20,000,000 in the aggregate at any one time outstanding; and

(i) Permitted Acquisitions.

In determining the amount of investments, acquisitions, loans, and advances
permitted under this Section, investments and acquisitions shall always be taken
at the original cost thereof (regardless of any subsequent appreciation or
depreciation therein), and loans and advances shall be taken at the principal
amount thereof then remaining unpaid.

 

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Section 8.10. Mergers, Consolidations and Sales. The Borrower shall not, nor
shall it permit any Subsidiary to, be a party to any merger or consolidation
(other than as part of a Permitted Acquisition), or sell, transfer, lease or
otherwise dispose of all or any part of its Property, including any disposition
of Property as part of a sale and leaseback transaction, or in any event sell or
discount (with or without recourse) any of its notes or accounts receivable;
provided, however, that so long as no Default or Event of Default exists (except
in the case of sales of inventory permitted by subsection (a) hereof) this
Section shall not apply to nor operate to prevent:

(a) the sale or lease of inventory in the ordinary course of business;

(b) the sale, transfer, lease or other disposition of Property of the Borrower
and its Domestic Subsidiaries to one another;

(c) the merger of any Domestic Subsidiary with and into the Borrower or any
other Domestic Subsidiary, provided that, in the case of any merger involving
the Borrower, the Borrower is the corporation surviving the merger;

(d) the sale of delinquent notes or accounts receivable in the ordinary course
of business for purposes of collection only (and not for the purpose of any bulk
sale or securitization transaction);

(e) the sale, transfer or other disposition of any tangible personal property
that, in the reasonable business judgment of the Borrower or its Subsidiary, has
become obsolete or worn out, and which is disposed of in the ordinary course of
business;

(f) the sale, transfer, lease or other disposition of Property of the Borrower
or any Subsidiary (including any disposition of Property as part of a sale and
leaseback transaction) aggregating for the Borrower and its Subsidiaries in an
amount not to exceed 5% of the Borrower’s total assets (determined in accordance
with GAAP) as shown on the Borrower’s audited balance sheet as of the last the
day of the most recently completed fiscal year during any fiscal year of the
Borrower; and

(g) the dissolution of (i) Penford Holdings Pty. Ltd. and Penford Australia
Limited, and (ii) any immaterial Subsidiary approved by the Administrative
Agent.

Section 8.11. Maintenance of Subsidiaries. The Borrower shall not assign, sell
or transfer, nor shall it permit any Subsidiary to issue, assign, sell or
transfer, any shares of capital stock or other equity interests of a Subsidiary;
provided, however, that the foregoing shall not operate to prevent (a) Liens on
the capital stock or other equity interests of Subsidiaries granted to the
Administrative Agent pursuant to the Collateral Documents, (b) the issuance,
sale, and transfer to any person of any shares of capital stock of a Subsidiary
solely for the purpose of qualifying, and to the extent legally necessary to
qualify, such person as a director of such Subsidiary, and (c) any transaction
permitted by Sections 8.10(c) and (g) above.

 

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Section 8.12. Dividends and Certain Other Restricted Payments. The Borrower
shall not, nor shall it permit any Subsidiary to, (a) declare or pay any
dividends on or make any other distributions in respect of any class or series
of its capital stock or other equity interests or (b) directly or indirectly
purchase, redeem, or otherwise acquire or retire any of its capital stock or
other equity interests or any warrants, options, or similar instruments to
acquire the same (collectively, the “Restricted Payments”); provided, however,
that the foregoing shall not operate to prevent:

(i) the making of dividends or distributions by any Wholly-owned Subsidiary of
the Borrower to its parent corporation;

(ii) the redemption of all of the Borrower’s issued and outstanding Preferred
Stock on the Closing Date for an aggregate consideration not to exceed
$30,000,000; and

(iii) Restricted Payments not otherwise permitted hereby, excluding Restricted
Payments with respect to any stock issued in connection with the exercise of the
Cure Right pursuant to Section 9.7 hereof, in an aggregate amount not to exceed
during any period of four consecutive fiscal quarters the lesser of $10,000,000
and 50% of the Borrower’s Free Cash Flow for the four consecutive fiscal
quarters most recently ended, in each case reduced by the amount of Subordinated
Debt repaid as permitted by the exception appearing at the end of Section 8.21,
provided such repayment shall not be deducted in determining Borrower’s Free
Cash Flow for those purposes.

Section 8.13. ERISA. The Borrower shall, and shall cause each Subsidiary to,
promptly pay and discharge all obligations and liabilities arising under ERISA
of a character which if unpaid or unperformed could reasonably be expected to
result in the imposition of a Lien against any of its Property. The Borrower
shall, and shall cause each Subsidiary to, promptly notify the Administrative
Agent and each Lender of: (a) the occurrence of any reportable event (as defined
in ERISA) with respect to a Plan for which a notice to the PBGC is required,
(b) receipt of any notice from the PBGC of its intention to seek termination of
any Plan or appointment of a trustee therefor, (c) its intention to terminate or
withdraw from any Plan, and (d) the occurrence of any event with respect to any
Plan which would result in the incurrence by the Borrower or any Subsidiary of
any material liability, fine or penalty, or any material increase in the
contingent liability of the Borrower or any Subsidiary with respect to any
post-retirement Welfare Plan benefit.

Section 8.14. Compliance with Laws. (a) The Borrower shall, and shall cause each
Subsidiary to, comply in all respects with the requirements of all federal,
state, and local laws, rules, regulations, ordinances and orders applicable to
or pertaining to its Property or business operations, where any such
non-compliance, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect or result in a Lien upon any of its Property.

(b) Without limiting the agreements set forth in Section 8.14(a) above, the
Borrower shall, and shall cause each Subsidiary to, at all times, do the
following to the extent the failure to do so, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect:

(i) comply in all material respects with, and maintain each of the Premises in
compliance in all material respects with, all applicable Environmental Laws;

(ii) require that each tenant and subtenant, if any, of any of the Premises or
any part thereof comply in all material respects with all applicable
Environmental Laws;

 

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(iii) obtain and maintain in full force and effect all material governmental
approvals required by any applicable Environmental Law for operations at each of
the Premises;

(iv) cure any material violation by it or at any of the Premises of applicable
Environmental Laws;

(v) not allow the presence or operation at any of the Premises of any
(1) landfill or dump or (2) hazardous waste management facility or solid waste
disposal facility as defined pursuant to RCRA or any comparable state law or law
of any other jurisdiction;

(vi) not manufacture, use, generate, transport, treat, store, release, dispose
or handle any Hazardous Material at any of the Premises except in the ordinary
course of its business and in compliance with applicable Environmental Law;

(vii) within 10 Business Days notify the Administrative Agent in writing of and
provide any reasonably requested documents upon learning of any of the following
in connection with the Borrower or any Subsidiary or any of the Premises:
(1) any material liability for response or corrective action, natural resource
damage or other harm pursuant to CERCLA, RCRA or any comparable state law or law
of any other jurisdiction; (2) any material Environmental Claim; (3) any
material violation of an Environmental Law or material Release, threatened
Release or unlawful disposal of a Hazardous Material; (4) any restriction on the
ownership, occupancy, use or transferability arising pursuant to any
(x) Release, threatened Release or unlawful disposal of a Hazardous Material or
(y) Environmental Law; or (5) any environmental, natural resource, health or
safety condition, which could reasonably be expected to have a Material Adverse
Effect;

(viii) conduct at its expense any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
remove, remediate, clean up or abate any material Release, threatened Release or
unlawful disposal of a Hazardous Material as required by any applicable
Environmental Law,

(ix) abide by and observe any restrictions on the use of the Premises imposed by
any governmental authority as set forth in a deed or other instrument affecting
the Borrower’s or any Subsidiary’s interest therein;

(x) promptly provide or otherwise make available to the Administrative Agent any
reasonably requested environmental record concerning the Premises which the
Borrower or any Subsidiary possesses or can reasonably obtain; and

(xi) perform, satisfy, and implement any operation or maintenance actions
required by any governmental authority or Environmental Law, or included in any
no further action letter or covenant not to sue issued by any governmental
authority under any Environmental Law, to the extent any of which apply to the
Borrower, any Subsidiary or the Premises.

 

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Notwithstanding any other provision of this Agreement, this Section 8.14(b)
shall not apply to the extent that: (i) neither Borrower nor any of its
Subsidiaries has any ownership interest in a particular Premises; (ii) such
Premises are not within the care, custody or control of either the Borrower or
any of its Subsidiaries; (iii) neither the Borrower nor any of its Subsidiaries
has conducted or authorized any Hazardous Material Activity on or at such
Premises; and (iv) neither the Borrower nor any of its Subsidiaries has caused
or contributed to any Environmental Claim related to such Premises.

Section 8.15. Burdensome Contracts With Affiliates. The Borrower shall not, nor
shall it permit any Subsidiary to, enter into any contract, agreement or
business arrangement with any of its Affiliates (other than with Wholly-owned
Subsidiaries) on terms and conditions which are less favorable to the Borrower
or such Subsidiary than would be usual and customary in similar contracts,
agreements or business arrangements between Persons not affiliated with each
other, provided that the foregoing shall not apply to any Permitted Transaction.

Section 8.16. No Changes in Fiscal Year. The fiscal year of the Borrower and its
Subsidiaries ends on August 31 of each year; and the Borrower shall not, nor
shall it permit any Subsidiary to, change its fiscal year from its present
basis.

Section 8.17. Formation of Subsidiaries. (a) Promptly upon the formation or
acquisition of any Subsidiary, the Borrower shall provide the Administrative
Agent and the Lenders notice thereof and timely comply with the requirements of
Section 4 hereof (at which time Schedule 6.2 shall be deemed amended to include
reference to such Subsidiary).

(b) Inactive Subsidiary. The Borrower shall not permit Penford Export
Corporation, Penford Holdings Pty. Ltd. and Penford Australia Limited to engage
in any operations, conduct any business or own any assets having an aggregate
value in excess of $50,000; provided, however, that Penford Australia Limited
shall be permitted to continue to receive funds from its escrow account
established in connection with the sale of its assets to National Starch.

Section 8.18. Change in the Nature of Business. The Borrower shall not, nor
shall it permit any Subsidiary to, engage in any business or activity if as a
result the general nature of the business of the Borrower or any Subsidiary
would be changed in any material respect from the general nature of the business
engaged in by it as of the Closing Date, it being agreed that an Eligible Line
of Business shall not be a violation of this Section.

Section 8.19. Use of Proceeds. The Borrower shall use the credit extended under
this Agreement solely for the purposes set forth in, or otherwise permitted by,
Section 6.4 hereof.

Section 8.20. No Restrictions. Except as provided herein, the Borrower shall
not, nor shall it permit any Subsidiary to, directly or indirectly create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of the Borrower or any
Subsidiary to: (a) pay dividends or make any other distribution on any
Subsidiary’s capital stock or other equity interests owned by the Borrower or
any other Subsidiary, (b) pay any indebtedness owed to the Borrower or any other
Subsidiary, (c) make loans or advances to the Borrower or any other Subsidiary,
(d) transfer any of its Property to the Borrower or any other Subsidiary or
(e) guarantee the Obligations and/or grant Liens on its assets to the
Administrative Agent as required by the Loan Documents.

 

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Section 8.21. Subordinated Debt. The Borrower shall not, nor shall it permit any
Subsidiary to, amend or modify any of the terms or conditions relating to any
Subordinated Debt, or make any voluntary prepayment of thereof or effect any
voluntary redemption thereof, or make any payment on account of Subordinated
Debt which is prohibited under the terms of any instrument or agreement
subordinating the same to the Obligations, except to the extent the Borrower
could make Restricted Payments permitted by Section 8.12(iv) during any fiscal
year.

Section 8.22. Financial Covenants. (a) Total Leverage Ratio. The Borrower shall
not, as of the last day of each fiscal quarter of the Borrower, permit the ratio
of (x) Total Funded Debt of the Borrower and its Subsidiaries (determined on a
consolidated basis in accordance with GAAP), to (y) EBITDA of the Borrower and
its Subsidiaries (determined on a consolidated basis in accordance with GAAP)
for the four fiscal quarters of the Borrower then ended (the “Total Leverage
Ratio”) to be more than (i) 3.75 to 1.0 on the Closing Date and on the last day
of each fiscal quarter ending thereafter to and including November 30, 2012,
(ii) 3.50 to 1.0 from February 28, 2013, to and including November 30, 2013,
(iii) 3.25 to 1.0 on February 28, 2014 and May 31, 2014, and (iv) 3.00 to 1.0 on
the last day of each fiscal quarter thereafter.

(b) Fixed Charge Coverage Ratio. As of the last day of each fiscal quarter of
the Borrower, the Borrower shall maintain a ratio of (i) EBITDA of the Borrower
and its Subsidiaries (determined on a consolidated basis in accordance with
GAAP) for the four consecutive fiscal quarters of the Borrower ended on such
date minus the aggregate amount of all Capital Expenditures made or incurred by
the Borrower and its Subsidiaries (determined on a consolidated basis in
accordance with GAAP) for the repair or maintenance of property, plant or
equipment (but in any event not less than $3,000,000 from August 31, 2011
through August 30, 2012 and $4,500,000 at all times thereafter) during the same
period, to (ii) Fixed Charges of the Borrower and its Subsidiaries (determined
on a consolidated basis in accordance with GAAP) for the same period, of not
less than 1.35 to 1.

(c) Capital Expenditures. The Borrower shall not, nor shall it permit any of its
Subsidiaries to, incur Capital Expenditures in any fiscal year, commencing with
the fiscal year ending August 31, 2013, in an aggregate amount in excess of
$15,000,000, provided that this Section shall apply to the Borrower’s fiscal
year ending August 31, 2013, only if the Borrower’s Total Leverage Ratio for the
last 2 fiscal quarters of such fiscal year is greater than 2.50 to 1, and
provided further that this Section shall apply to any of the Borrower’s fiscal
years ending after August 31, 2013, only if the Borrower’s Total Leverage Ratio
for the last 2 fiscal quarters of such fiscal year is greater than 2.00 to 1.

Section 8.23. Compliance with OFAC Sanctions Programs. (a) The Borrower shall at
all times comply with the requirements of all OFAC Sanctions Programs applicable
to the Borrower and shall cause each of its Subsidiaries to comply with the
requirements of all OFAC Sanctions Programs applicable to such Subsidiary.

 

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(b) The Borrower shall provide the Administrative Agent, the L/C Issuer, and the
Lenders any information regarding the Borrower, its Affiliates, and its
Subsidiaries necessary for the Administrative Agent, the L/C Issuer, and the
Lenders to comply with all applicable OFAC Sanctions Programs; provided however,
in the case of Affiliates, to the Borrower’s obligations hereunder are limited
to providing information available to the Borrower regarding any Affiliate.

(c) If the Borrower obtains actual knowledge or receives any written notice that
the Borrower, any Affiliate or any Subsidiary is named on the then current OFAC
SDN List (such occurrence, an “OFAC Event”), the Borrower shall promptly
(i) give written notice to the Administrative Agent, the L/C Issuer, and the
Lenders of such OFAC Event, and (ii) comply with all applicable laws with
respect to such OFAC Event (regardless of whether the party included on the OFAC
SDN List is located within the jurisdiction of the United States of America),
including the OFAC Sanctions Programs, and the Borrower hereby authorizes and
consents to the Administrative Agent, the L/C Issuer, and the Lenders taking any
and all steps the Administrative Agent, the L/C Issuer, or the Lenders deem
necessary, in their sole but reasonable discretion, to avoid violation of all
applicable laws with respect to any such OFAC Event, including the requirements
of the OFAC Sanctions Programs (including the freezing and/or blocking of assets
and reporting such action to OFAC).

Section 8.24. Post-Closing Covenant. Not later than 30 days after the Closing
Date (or such later date as determined by the Administrative Agent in its sole
discretion), the Administrative Agent shall have received a date down
endorsement to each mortgagee’s title insurance policy insuring the Mortgages in
form and substance reasonably acceptable to the Administrative Agent from the
title insurance company that issued such title insurance policies insuring the
Lien of the Mortgages as supplemented in connection with this Agreement in the
aggregate amount acceptable to the Administrative Agent to be valid first
priority Liens (other than as permitted by Section 8.8) subject to no defects or
objections which are reasonably unacceptable to the Administrative Agent,
together with such endorsements as the Administrative Agent may require.

SECTION 9.     EVENTS OF DEFAULT AND REMEDIES.

Section 9.1. Events of Default. Any one or more of the following shall
constitute an “Event of Default” hereunder:

(a)    (i) default in the payment when due of all or any part of the principal
of any Note (whether at the stated maturity thereof or at any other time
provided for in this Agreement) or of any Reimbursement Obligation (whether at
the stated maturity thereof or at any other time provided for in this Agreement)
or (ii) default for a period of 3 Business Days in the payment of any interest
or any fee or other Obligation payable hereunder or under any other Loan
Document;

(b) default in the observance or performance of any covenant set forth in
Sections 8.1, 8.5, 8.7, 8.8, 8.9, 8.10, 8.11, 8.12, 8.17, 8.18, 8.21, 8.22
(subject to Section 9.7 in the case only of section 8.22(a) and (b)) or 8.24
hereof or of any provision in any Loan Document dealing with the use,
disposition or remittance of the proceeds of Collateral or requiring the
maintenance of insurance thereon;

 

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(c) default in the observance or performance of any other provision hereof or of
any other Loan Document which is not remedied within 45 days after the earlier
of (i) the date on which such failure shall first become known to any officer of
the Borrower or (ii) written notice thereof is given to the Borrower by the
Administrative Agent;

(d) any representation or warranty made herein or in any other Loan Document or
in any certificate furnished to the Administrative Agent or the Lenders pursuant
hereto or thereto or in connection with any transaction contemplated hereby or
thereby proves untrue or misleading in any material respect as of the date of
the issuance or making or deemed making thereof;

(e) any event occurs or condition exists (other than those described in
subsections (a) through (d) above) which is specified as an event of default
under any of the other Loan Documents which have not been cured or waived within
any applicable cure period, or any of the Loan Documents shall for any reason
not be or shall cease to be in full force and effect or is declared to be, in
whole or in part, unenforceable, voidable or null and void, or any of the
Collateral Documents shall for any reason fail to create a valid and perfected
first priority Lien in favor of the Administrative Agent in any Collateral
purported to be covered thereby except as expressly permitted by the terms
thereof, or the Borrower or any Subsidiary takes any action for the purpose of
terminating, repudiating or rescinding any Loan Document executed by it or any
of its obligations thereunder;

(f) default shall occur under any Indebtedness for Borrowed Money (other than
the Intercompany Indebtedness) issued, assumed or guaranteed by the Borrower or
any Subsidiary aggregating in excess of $5,000,000, or under any indenture,
agreement or other instrument under which the same may be issued, and such
default shall continue for a period of time sufficient to permit the
acceleration of the maturity of any such Indebtedness for Borrowed Money
(whether or not such maturity is in fact accelerated), or any such Indebtedness
for Borrowed Money shall not be paid when due (whether by demand, lapse of time,
acceleration or otherwise);

(g) any judgment or judgments, writ or writs or warrant or warrants of
attachment, or any similar process or processes, shall be entered or filed
against the Borrower or any Subsidiary, or against any of its Property, in an
aggregate amount in excess of $5,000,000, and which remains undischarged,
unvacated, unbonded or unstayed for a period of 60 days;

(h) the Borrower or any Subsidiary, or any member of its Controlled Group, shall
fail to pay when due an amount or amounts aggregating in excess of $5,000,000
which it shall have become liable to pay to the PBGC or to a Plan under Title IV
of ERISA; or notice of intent to terminate a Plan or Plans having aggregate
Unfunded Vested Liabilities in excess of $5,000,000 (collectively, a “Material
Plan”) shall be filed

 

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under Title IV of ERISA by the Borrower or any Subsidiary, or any other member
of its Controlled Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to administer any Material Plan
or a proceeding shall be instituted by a fiduciary of any Material Plan against
the Borrower or any Subsidiary, or any member of its Controlled Group, to
enforce Section 515 or 4219(c)(5) of ERISA and such proceeding shall not have
been dismissed within 45 days thereafter; or a condition shall exist by reason
of which the PBGC would be entitled to obtain a decree adjudicating that any
Material Plan must be terminated;

(i) any Change of Control shall occur;

(j) the Borrower or any Subsidiary shall (i) have entered involuntarily against
it an order for relief under the United States Bankruptcy Code, as amended,
(ii) not pay, or admit in writing its inability to pay, or stop or suspend the
payment of its debts generally as they become due, (iii) make an assignment or
enter into an arrangement or composition with or for the benefit of creditors
generally or any class of them, (iv) apply for, seek, consent to or acquiesce
in, the appointment of an administrator, receiver, custodian, trustee, examiner,
liquidator, provisional liquidator, statutory manager or similar official for it
or any substantial part of its Property, (v) institute any proceeding seeking to
have entered against it an order for relief under the United States Bankruptcy
Code, as amended, or any other order under the laws of another jurisdiction
having substantially similar effect, to adjudicate it insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement, adjustment or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed against
it, (vi) take any action in furtherance of any matter described in parts (i)
through (v) above, or (vii) fail to contest in good faith any appointment or
proceeding described in Section 9.1(k) hereof; or

(k) an administrator, custodian, receiver, trustee, examiner, liquidator,
provisional liquidator, statutory manager or similar official shall be appointed
for the Borrower or any Subsidiary, or any substantial part of any of its
Property, or a proceeding described in Section 9.1(j)(v) shall be instituted
against the Borrower or any Subsidiary, and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of sixty (60) days.

Section 9.2. Non-Bankruptcy Defaults. When any Event of Default other than those
described in subsection (j) or (k) of Section 9.1 hereof has occurred and is
continuing, the Administrative Agent shall, by written notice to the Borrower:
(a) if so directed by the Required Lenders, terminate the remaining Revolving
Credit Commitments and all other obligations of the Lenders hereunder on the
date stated in such notice (which may be the date thereof); (b) if so directed
by the Required Lenders, declare the principal of and the accrued interest on
all outstanding Notes to be forthwith due and payable and thereupon all
outstanding Notes, including both principal and interest thereon, shall be and
become immediately due and payable together with all other amounts payable under
the Loan Documents without further demand,

 

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presentment, protest or notice of any kind; and (c) if so directed by the
Required Lenders, demand that the Borrower immediately pay to the Administrative
Agent the full amount then available for drawing under each or any Letter of
Credit, and the Borrower agrees to immediately make such payment and
acknowledges and agrees that the Lenders would not have an adequate remedy at
law for failure by the Borrower to honor any such demand and that the
Administrative Agent, for the benefit of the Lenders, shall have the right to
require the Borrower to specifically perform such undertaking whether or not any
drawings or other demands for payment have been made under any Letter of Credit.
The Administrative Agent, after giving notice to the Borrower pursuant to
Section 9.1(c) or this Section 9.2, shall also promptly send a copy of such
notice to the other Lenders, but the failure to do so shall not impair or annul
the effect of such notice.

Section 9.3. Bankruptcy Defaults. When any Event of Default described in
subsections (j) or (k) of Section 9.1 hereof has occurred and is continuing,
then all outstanding Notes shall immediately become due and payable together
with all other amounts payable under the Loan Documents without presentment,
demand, protest or notice of any kind, the obligation of the Lenders to extend
further credit pursuant to any of the terms hereof shall immediately terminate
and the Borrower shall immediately pay to the Administrative Agent the full
amount then available for drawing under all outstanding Letters of Credit, the
Borrower acknowledging and agreeing that the Lenders would not have an adequate
remedy at law for failure by the Borrower to honor any such demand and that the
Lenders, and the Administrative Agent on their behalf, shall have the right to
require the Borrower to specifically perform such undertaking whether or not any
draws or other demands for payment have been made under any of the Letters of
Credit.

Section 9.4. Collateral for Undrawn Letters of Credit. (a) If the Borrower is
required to deliver cash collateral under Section 1.3(b) hereof or if the
prepayment of the amount available for drawing under any or all outstanding
Letters of Credit is required under Section 1.8(b) or under Section 9.2 or 9.3
above, the Borrower shall forthwith pay the amount required to be so prepaid, to
be held by the Administrative Agent as provided in subsection (b) below.

(b) All amounts delivered or prepaid pursuant to subsection (a) above shall be
held by the Administrative Agent in one or more separate collateral accounts
(each such account, and the credit balances, properties, and any investments
from time to time held therein, and any substitutions for such account, any
certificate of deposit or other instrument evidencing any of the foregoing and
all proceeds of and earnings on any of the foregoing being collectively called
the “Collateral Account”) as security for, and for application by the
Administrative Agent (to the extent available) to, the reimbursement of any
payment under any Letter of Credit then or thereafter made by the Administrative
Agent, and to the payment of the unpaid balance of any other Obligations. The
Collateral Account shall be held in the name of and subject to the exclusive
dominion and control of the Administrative Agent for the benefit of the
Administrative Agent, the Lenders, and the L/C Issuer. If and when requested by
the Borrower, the Administrative Agent shall invest funds held in the Collateral
Account from time to time in direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by, the United States of
America with a remaining maturity of one year or less, provided that the
Administrative Agent is irrevocably authorized to sell investments held in the
Collateral Account when and as required to make payments out of the Collateral
Account for

 

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application to amounts due and owing from the Borrower to the L/C Issuer, the
Administrative Agent or the Lenders; provided, however, that (i) if the Borrower
shall have made payment of all obligations referred to in subsection (a) above
(ii) all relevant preference or other disgorgement periods relating to the
receipt of such payments have passed, and (iii) no Letters of Credit, Revolving
Credit Commitments, Loans or other Obligations remain outstanding, at the
request of the Borrower the Administrative Agent shall release to the Borrower
any remaining amounts held in the Collateral Account.

Section 9.5. Notice of Default. The Administrative Agent shall give notice to
the Borrower under Section 9.1(c) hereof promptly upon being requested to do so
by any Lender and shall thereupon notify all the Lenders thereof.

Section 9.6. Expenses. The Borrower agrees to pay to the Administrative Agent
and each Lender, and any other holder of any Note outstanding hereunder, all
costs and expenses reasonably incurred or paid by the Administrative Agent and
such Lender or any such holder, including reasonable attorneys’ fees and court
costs, in connection with any Default or Event of Default hereunder or in
connection with the enforcement of any of the Loan Documents (including all such
costs and expenses incurred in connection with any proceeding under the United
States Bankruptcy Code involving the Borrower or any Subsidiary as a debtor
thereunder).

Section 9.7. Right to Cure. (a) Notwithstanding anything to the contrary
contained in Section 9.1, in the event the Borrower anticipates that it will not
be able to comply or fails to comply with the requirements of any covenant set
forth in Sections 8.22(a) and (b), on or before the date on which a certificate
of an Authorized Representative certifying compliance with Sections 8.22(a) and
(b) is required to be delivered pursuant to Section 8.5(j), the Borrower may,
subject to Section 9.7(b), notify the Administrative Agent that it intends to
exercise its Cure Right (as defined below) (each such notice, a “Cure Notice”),
and if the Borrower has given a Cure Notice then the Lenders shall not exercise
their remedies with respect to Sections 8.22(a) and (b), as applicable, provided
that within 20 Business Days after the date the Cure Notice is given, the
Borrower shall issue common and/or preferred stock to any Person other than the
Borrower or a Subsidiary for cash or otherwise receive cash contributions, in
each case, on terms and conditions acceptable to the Administrative Agent in an
aggregate amount equal to the amount necessary to cure the relevant failure to
comply with Sections 8.22(a) and (b) by means of the repayment of Total Funded
Debt (collectively, the “Cure Right”), and upon the receipt by the Borrower of
such cash (the “Cure Amount”) pursuant to the exercise by the Borrower of such
Cure Right and the application within such 20 Business Day period of the Cure
Amount to the payment of Loans and Reimbursement Obligations outstanding
hereunder, the covenants in Sections 8.22(a) and (b) shall be recalculated
giving effect to the following pro forma adjustments:

(i) the Cure Amount shall be deemed to have been applied to the payment of Loans
and Reimbursement Obligations hereunder (x) as of the last day of the fiscal
quarter for which a Cure Right has been exercised in the case of the Total
Leverage Ratio contained in Section 8.22(a) and (y) as of the first day of the
four consecutive fiscal quarters of the Borrower ended on the last day of the
fiscal quarter for which a Cure Right has been exercised in the case of the
Fixed Charge Coverage Ratio contained in Section 8.22(b); and

 

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(ii) if after giving effect to the foregoing recalculations, the Borrower shall
then be in compliance with the requirements of Section 8.22(a) and (b) the
Borrower shall be deemed to have satisfied the requirements of Section 8.22 as
of the relevant date of determination with the same effect as though there had
been no failure to comply therewith at such date, and the applicable breach or
default of the covenants in Section 8.22 that had occurred shall be deemed cured
for the purposes of this Agreement.

(b) Notwithstanding anything herein to the contrary, if the Borrower exercises
the Cure Right in more than two quarters in any four-quarter period, the
Revolving Credit Commitments shall be permanently reduced without any action by
the Borrower, the Administrative Agent or any Lender by an amount equal to the
aggregate amount of all proceeds of equity received by the Borrower in
connection with the exercise of such Cure Right, and each Lender’s Revolving
Credit Commitment shall be reduced by its Revolver Percentage of such reduction.

SECTION 10.     CHANGE IN CIRCUMSTANCES.

Section 10.1. Change of Law. Notwithstanding any other provisions of this
Agreement or any other Loan Document, if at any time any Change in Law makes it
unlawful for any Lender to make or continue to maintain any Eurodollar Loans in
the relevant currency or to perform its obligations as contemplated hereby, such
Lender shall promptly give notice thereof to the Borrower and such Lender’s
obligations to make or maintain Eurodollar Loans under this Agreement shall be
suspended until it is no longer unlawful for such Lender to make or maintain
Eurodollar Loans in such currency. The Borrower shall prepay on demand the
outstanding principal amount of any such affected Eurodollar Loans, together
with all interest accrued thereon and all other amounts then due and payable to
such Lender under this Agreement; provided, however, subject to all of the terms
and conditions of this Agreement, the Borrower may then elect to borrow the
principal amount of the affected Eurodollar Loans from such Lender by means of
Base Rate Loans from such Lender, which Base Rate Loans shall not be made
ratably by the Lenders but only from such affected Lender.

Section 10.2. Unavailability of Deposits or Inability to Ascertain, or
Inadequacy of, LIBOR. If on or prior to the first day of any Interest Period for
any Borrowing of Eurodollar Loans:

(a) the Administrative Agent determines that deposits in the applicable currency
(in the applicable amounts) are not being offered to it in the interbank
Eurodollar market for such Interest Period, or that by reason of circumstances
affecting the interbank Eurodollar market adequate and reasonable means do not
exist for ascertaining the applicable LIBOR, or

(b) the Required Lenders advise the Administrative Agent that (i) LIBOR as
determined by the Administrative Agent will not adequately and fairly reflect
the cost to such Lenders of funding their Eurodollar Loans for such Interest
Period or (ii) that the making or funding of Eurodollar Loans become
impracticable,

 

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then the Administrative Agent shall forthwith give notice thereof to the
Borrower and the Lenders, whereupon until the Administrative Agent notifies the
Borrower that the circumstances giving rise to such suspension no longer exist,
the obligations of the Lenders to make Eurodollar Loans shall be suspended.

Section 10.3. Increased Cost and Reduced Return. (a) If any Change in Law:

(i) shall subject any Lender (or its Lending Office) to any tax, duty or other
charge with respect to its Eurodollar Loans, its Notes, its Letter(s) of Credit,
or its participation in any thereof, any Reimbursement Obligations owed to it or
its obligation to make Eurodollar Loans, issue a Letter of Credit, or to
participate therein, or shall change the basis of taxation of payments to any
Lender (or its Lending Office) of the principal of or interest on its Eurodollar
Loans, Letter(s) of Credit, or participations therein or any other amounts due
under this Agreement or any other Loan Document in respect of its Eurodollar
Loans, Letter(s) of Credit, any participation therein, any Reimbursement
Obligations owed to it, or its obligation to make Eurodollar Loans, or issue a
Letter of Credit, or acquire participations therein (except for changes in the
rate of tax on the overall net income of such Lender or its Lending Office
imposed by the jurisdiction in which such Lender’s principal executive office or
Lending Office is located); or

(ii) shall impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors of the
Federal Reserve System, but excluding with respect to any Eurodollar Loans any
such requirement included in an applicable Eurocurrency Reserve Percentage)
against assets of, deposits with or for the account of, or credit extended by,
any Lender (or its Lending Office) or shall impose on any Lender (or its Lending
Office) or on the interbank market any other condition affecting its Eurodollar
Loans, its Notes, its Letter(s) of Credit, or its participation in any thereof,
any Reimbursement Obligation owed to it, or its obligation to make Eurodollar
Loans, or to issue a Letter of Credit, or to participate therein;

and the result of any of the foregoing is to increase the cost to such Lender
(or its Lending Office) of making or maintaining any Eurodollar Loan, issuing or
maintaining a Letter of Credit, or participating therein, or to reduce the
amount of any sum received or receivable by such Lender (or its Lending Office)
under this Agreement or under any other Loan Document with respect thereto, by
an amount deemed by such Lender to be material, then, within 15 days after
demand by such Lender (with a copy to the Administrative Agent), the Borrower
shall be obligated to pay to such Lender such additional amount or amounts as
will compensate such Lender for such increased cost or reduction.

(b) If, after the date hereof, any Lender or the Administrative Agent shall have
determined that the adoption of any applicable law, rule or regulation regarding
capital

 

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adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its Lending Office) or any corporation controlling such Lender
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, has
had the effect of reducing the rate of return on such Lender’s or such
corporation’s capital as a consequence of its obligations hereunder to a level
below that which such Lender or such corporation could have achieved but for
such adoption, change or compliance (taking into consideration such Lender’s or
such corporation’s policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, within 15 days
after demand by such Lender (with a copy to the Administrative Agent), the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction.

(c) A certificate of a Lender claiming compensation under this Section 10.3 and
setting forth the additional amount or amounts to be paid to it hereunder shall
be conclusive if reasonably determined. In determining such amount, such Lender
may use any reasonable averaging and attribution methods.

Section 10.4. Lending Offices. Each Lender may, at its option, elect to make its
Loans hereunder at the branch, office or affiliate specified on the appropriate
signature page hereof (each a “Lending Office”) for each type of Loan available
hereunder or at such other of its branches, offices or affiliates as it may from
time to time elect and designate in a written notice to the Borrower and the
Administrative Agent. To the extent reasonably possible, a Lender shall
designate an alternative branch or funding office with respect to its Eurodollar
Loans to reduce any liability of the Borrower to such Lender under Section 10.3
hereof or to avoid the unavailability of Eurodollar Loans under Section 10.2
hereof, so long as such designation is not otherwise disadvantageous to the
Lender.

Section 10.5. Discretion of Lender as to Manner of Funding. Notwithstanding any
other provision of this Agreement, each Lender shall be entitled to fund and
maintain its funding of all or any part of its Loans in any manner it sees fit,
it being understood, however, that for the purposes of this Agreement all
determinations hereunder with respect to Eurodollar Loans shall be made as if
each Lender had actually funded and maintained each Eurodollar Loan through the
purchase of deposits in the interbank eurodollar market having a maturity
corresponding to such Loan’s Interest Period, and bearing an interest rate equal
to LIBOR for such Interest Period.

SECTION 11.     THE ADMINISTRATIVE AGENT.

Section 11.1. Appointment and Authorization of Administrative Agent. Each Lender
hereby appoints Bank of Montreal as the Administrative Agent under the Loan
Documents and hereby authorizes the Administrative Agent to take such action as
Administrative Agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto. The Lenders
expressly agree that the Administrative Agent is not acting as a fiduciary of
the Lenders in respect of the Loan Documents, the Borrower or otherwise, and
nothing herein or in any of the other Loan Documents shall result in any duties
or obligations on the Administrative Agent or any of the Lenders except as
expressly set forth herein.

 

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Section 11.2. Administrative Agent and its Affiliates. The Administrative Agent
shall have the same rights and powers under this Agreement and the other Loan
Documents as any other Lender and may exercise or refrain from exercising such
rights and power as though it were not the Administrative Agent, and the
Administrative Agent and its affiliates may accept deposits from, lend money to,
and generally engage in any kind of business with the Borrower or any Affiliate
of the Borrower as if it were not the Administrative Agent under the Loan
Documents. The term “Lender” as used herein and in all other Loan Documents,
unless the context otherwise clearly requires, includes the Administrative Agent
in its individual capacity as a Lender. References in Section 1 hereof to the
Administrative Agent’s Loans, or to the amount owing to the Administrative Agent
for which an interest rate is being determined, refer to the Administrative
Agent in its individual capacity as a Lender.

Section 11.3. Action by Administrative Agent. If the Administrative Agent
receives from the Borrower a written notice of an Event of Default pursuant to
Section 8.5 hereof, the Administrative Agent shall promptly give each of the
Lenders written notice thereof. The obligations of the Administrative Agent
under the Loan Documents are only those expressly set forth therein. Without
limiting the generality of the foregoing, the Administrative Agent shall not be
required to take any action hereunder with respect to any Default or Event of
Default, except as expressly provided in Sections 9.2 and 9.5. Upon the
occurrence of an Event of Default, the Administrative Agent shall take such
action to enforce its Lien on the Collateral and to preserve and protect the
Collateral as may be directed by the Required Lenders. Unless and until the
Required Lenders give such direction, the Administrative Agent may (but shall
not be obligated to) take or refrain from taking such actions as it deems
appropriate and in the best interest of all the Lenders. In no event, however,
shall the Administrative Agent be required to take any action in violation of
applicable law or of any provision of any Loan Document, and the Administrative
Agent shall in all cases be fully justified in failing or refusing to act
hereunder or under any other Loan Document unless it first receives any further
assurances of its indemnification from the Lenders that it may require,
including prepayment of any related expenses and any other protection it
requires against any and all costs, expense, and liability which may be incurred
by it by reason of taking or continuing to take any such action. The
Administrative Agent shall be entitled to assume that no Default or Event of
Default exists unless notified in writing to the contrary by a Lender or the
Borrower. In all cases in which the Loan Documents do not require the
Administrative Agent to take specific action, the Administrative Agent shall be
fully justified in using its discretion in failing to take or in taking any
action thereunder. Any instructions of the Required Lenders, or of any other
group of Lenders called for under the specific provisions of the Loan Documents,
shall be binding upon all the Lenders and the holders of the Obligations.

Section 11.4. Consultation with Experts. The Administrative Agent may consult
with legal counsel, independent public accountants, and other experts selected
by it and shall not be liable for any action taken or omitted to be taken by it
in good faith in accordance with the advice of such counsel, accountants or
experts.

 

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Section 11.5. Liability of Administrative Agent; Credit Decision. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or not taken by it in connection with the
Loan Documents: (i) with the consent or at the request of the Required Lenders
or (ii) in the absence of its own gross negligence or willful misconduct.
Neither the Administrative Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into
or verify: (i) any statement, warranty or representation made in connection with
this Agreement, any other Loan Document or any Credit Event; (ii) the
performance or observance of any of the covenants or agreements of the Borrower
or any Subsidiary contained herein or in any other Loan Document; (iii) the
satisfaction of any condition specified in Section 7 hereof, except receipt of
items required to be delivered to the Administrative Agent; or (iv) the
validity, effectiveness, genuineness, enforceability, perfection, value, worth
or collectibility hereof or of any other Loan Document or of any other documents
or writing furnished in connection with any Loan Document or of any Collateral;
and the Administrative Agent makes no representation of any kind or character
with respect to any such matter mentioned in this sentence. The Administrative
Agent may execute any of its duties under any of the Loan Documents by or
through employees, agents, and attorneys-in-fact and shall not be answerable to
the Lenders, the Borrower, or any other Person for the default or misconduct of
any such agents or attorneys-in-fact selected with reasonable care. The
Administrative Agent shall not incur any liability by acting in reliance upon
any notice, consent, certificate, other document or statement (whether written
or oral) believed by it to be genuine or to be sent by the proper party or
parties. In particular and without limiting any of the foregoing, the
Administrative Agent shall have no responsibility for confirming the accuracy of
any compliance certificate or other document or instrument received by it under
the Loan Documents. The Administrative Agent may treat the payee of any Note as
the holder thereof until written notice of transfer shall have been filed with
the Administrative Agent signed by such payee in form satisfactory to the
Administrative Agent. Each Lender acknowledges that it has independently and
without reliance on the Administrative Agent or any other Lender, and based upon
such information, investigations and inquiries as it deems appropriate, made its
own credit analysis and decision to extend credit to the Borrower in the manner
set forth in the Loan Documents. It shall be the responsibility of each Lender
to keep itself informed as to the creditworthiness of the Borrower and its
Subsidiaries, and the Administrative Agent shall have no liability to any Lender
with respect thereto.

Section 11.6. Indemnity. The Lenders shall ratably, in accordance with their
respective Percentages, indemnify and hold the Administrative Agent, and its
directors, officers, employees, agents, and representatives harmless from and
against any liabilities, losses, costs or expenses suffered or incurred by it
under any Loan Document or in connection with the transactions contemplated
thereby, regardless of when asserted or arising, except to the extent they are
promptly reimbursed for the same by the Borrower and except to the extent that
any event giving rise to a claim was caused by the gross negligence or willful
misconduct of the party seeking to be indemnified. The obligations of the
Lenders under this Section shall survive termination of this Agreement. The
Administrative Agent shall be entitled to offset amounts received for the
account of a Lender under this Agreement against unpaid amounts due from such
Lender to the Administrative Agent hereunder (whether as fundings of
participations, indemnities or otherwise), but shall not be entitled to offset
against amounts owed to the Administrative Agent by any Lender arising outside
of this Agreement and the other Loan Documents.

 

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Section 11.7. Resignation of Administrative Agent and Successor Administrative
Agent. The Administrative Agent may resign at any time by giving written notice
thereof to the Lenders and the Borrower. Upon any such resignation of the
Administrative Agent, the Required Lenders shall have the right to appoint a
successor Administrative Agent subject, so long as no Default or Event of
Default shall have occurred and be continuing, to the Borrower’s prior written
consent (which will not be unreasonably withheld or delayed). If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent’s giving of notice of resignation then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which may be any Lender hereunder or any commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $200,000,000 subject, so
long as no Default or Event of Default shall have occurred and be continuing, to
the Borrower’s prior written consent (which will not be unreasonably withheld or
delayed). Upon the acceptance of its appointment as the Administrative Agent
hereunder, such successor Administrative Agent shall thereupon succeed to and
become vested with all the rights and duties of the retiring Administrative
Agent under the Loan Documents, and the retiring Administrative Agent shall be
discharged from its duties and obligations thereunder. After any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of this Section 11 and all protective provisions of the other Loan
Documents shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent, but no successor Administrative
Agent shall in any event be liable or responsible for any actions of its
predecessor. If the Administrative Agent resigns and no successor is appointed,
the rights and obligations of such Administrative Agent shall be automatically
assumed by the Required Lenders and (i) the Borrower shall be directed to make
all payments due each Lender hereunder directly to such Lender and (ii) the
Administrative Agent’s rights in the Collateral Documents shall be assigned
without representation, recourse or warranty to the Lenders as their interests
may appear.

Section 11.8. L/C Issuer. The L/C Issuer shall act on behalf of the Lenders with
respect to any Letters of Credit issued by it and the documents associated
therewith. The L/C Issuer shall have all of the benefits and immunities
(i) provided to the Administrative Agent in this Section 11 with respect to any
acts taken or omissions suffered by the L/C Issuer in connection with Letters of
Credit issued by it or proposed to be issued by it and the Applications
pertaining to such Letters of Credit as fully as if the term “Administrative
Agent”, as used in this Section 11, included the L/C Issuer with respect to such
acts or omissions and (ii) as additionally provided in this Agreement with
respect to such L/C Issuer.

Section 11.9. Hedging Liability and Funds Transfer and Deposit Account Liability
Arrangements. By virtue of a Lender’s execution of this Agreement or an
assignment agreement pursuant to Section 13.12 hereof, as the case may be, any
Affiliate of such Lender with whom the Borrower or any Subsidiary has entered
into an agreement creating Hedging Liability or Funds Transfer and Deposit
Account Liability shall be deemed a Lender party hereto for purposes of any
reference in a Loan Document to the parties for whom the Administrative Agent is
acting, it being understood and agreed that the rights and benefits of such
Affiliate under the Loan Documents consist exclusively of such Affiliate’s right
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collections out of the Collateral and the Guaranties as more fully set forth in
Section 3.1 hereof. In connection with any such distribution of payments and
collections, the Administrative Agent shall be entitled to assume no amounts are
due to any Lender or its Affiliate with respect to Hedging Liability or Funds
Transfer and Deposit Account Liability unless such Lender has notified the
Administrative Agent in writing of the amount of any such liability owed to it
or its Affiliate prior to such distribution.

Section 11.10. Designation of Additional Agents. The Administrative Agent shall
have the continuing right, for purposes hereof, at any time and from time to
time to designate one or more of the Lenders (and/or its or their Affiliates) as
“syndication agents,” “documentation agents,” “arrangers,” or other designations
for purposes hereto, but such designation shall have no substantive effect, and
such Lenders and their Affiliates shall have no additional powers, duties or
responsibilities as a result thereof.

Section 11.11. Authorization to Release or Subordinate or Limit Liens. The
Administrative Agent is hereby irrevocably authorized by each of the Lenders to
(a) release any Lien covering any Collateral that is sold, transferred, or
otherwise disposed of in accordance with the terms and conditions of this
Agreement and the relevant Collateral Documents (including a sale, transfer, or
disposition permitted by the terms of Section 8.10 hereof or which has otherwise
been consented to in accordance with Section 13.13 hereof), (b) release or
subordinate any Lien on Collateral consisting of goods financed with purchase
money indebtedness or under a Capital Lease to the extent such purchase money
indebtedness or Capitalized Lease Obligation, and the Lien securing the same,
are permitted by Sections 8.7(b) and 8.8(d) hereof, (c) reduce or limit the
amount of the indebtedness secured by any particular item of Collateral to an
amount not less than the estimated value thereof to the extent necessary to
reduce mortgage registry, filing and similar tax, and (d) release Liens on the
Collateral following termination or expiration of the Commitments and payment in
full in cash of the Obligations and, if then due, Hedging Liability and Funds
Transfer and Deposit Account Liability and the termination of all Hedging
Agreements. The Administrative Agent agrees with the Borrower that upon the
termination or expiration of the Commitments and payment in full in cash of the
Obligations and, if then due, Hedging Liability and Funds Transfer and Deposit
Account Liability the Administrative Agent shall release all Liens on the
Collateral, at the Borrower’s cost and expense and the Administrative Agent
agrees with the Borrower that the costs of the Administrative Agent and its
agents that are passed on to the Borrower shall be reasonable.

Section 11.12. Authorization to Enter into, and Enforcement of, the Collateral
Documents. The Administrative Agent is hereby irrevocably authorized by each of
the Lenders to execute and deliver the Collateral Documents on behalf of each of
the Lenders and their Affiliates and to take such action and exercise such
powers under the Collateral Documents as the Administrative Agent considers
appropriate, provided the Administrative Agent shall not amend the Collateral
Documents unless such amendment is agreed to in writing by the Required Lenders
or all of the Lenders if required by Section 13.13. Each Lender acknowledges and
agrees that it will be bound by the terms and conditions of the Collateral
Documents upon the execution and delivery thereof by the Administrative Agent.
Except as otherwise specifically provided for herein, no Lender (or its
Affiliates) other than the Administrative Agent shall have the right to
institute any suit, action or proceeding in equity or at law for the foreclosure
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Collateral or for the execution of any trust or power in respect of the
Collateral or for the appointment of a receiver or for the enforcement of any
other remedy under the Collateral Documents; it being understood and intended
that no one or more of the Lenders (or their Affiliates) shall have any right in
any manner whatsoever to affect, disturb or prejudice the Lien of the
Administrative Agent (or any security trustee therefor) under the Collateral
Documents by its or their action or to enforce any right thereunder, and that
all proceedings at law or in equity shall be instituted, had, and maintained by
the Administrative Agent (or its security trustee) in the manner provided for in
the relevant Collateral Documents for the benefit of the Lenders and their
Affiliates.

SECTION 12.    THE GUARANTEES.

Section 12.1. The Guarantees. To induce the Lenders to provide the credits
described herein and in consideration of benefits expected to accrue to the
Borrower by reason of the Revolving Credit Commitments and for other good and
valuable consideration, receipt of which is hereby acknowledged, each Subsidiary
party hereto in accordance with Section 4.1 hereof (including any Subsidiary
formed or acquired after the Closing Date executing an Additional Guarantor
Supplement in the form attached hereto as Exhibit F or such other form
acceptable to the Administrative Agent) hereby unconditionally and irrevocably
guarantees jointly and severally to the Administrative Agent, the Lenders, the
L/C Issuer and their Affiliates, the due and punctual payment of all present and
future Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability, including, but not limited to, the due and punctual payment of
principal of and interest on the Notes, the Reimbursement Obligations, and the
due and punctual payment of all other Obligations now or hereafter owed by the
Borrower under the Loan Documents as and when the same shall become due and
payable, whether at stated maturity, by acceleration, or otherwise, according to
the terms hereof and thereof. In case of failure by the Borrower or other
obligor punctually to pay any Obligations, Hedging Liability, or Funds Transfer
and Deposit Account Liability guaranteed hereby, each Guarantor hereby
unconditionally agrees to make such payment or to cause such payment to be made
punctually as and when the same shall become due and payable, whether at stated
maturity, by acceleration, or otherwise, and as if such payment were made by the
Borrower or such obligor.

Section 12.2. Guarantee Unconditional. The obligations of each Guarantor under
this Section 12 shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged, or otherwise
affected by:

(a) any extension, renewal, settlement, compromise, waiver, or release in
respect of any obligation of the Borrower or other obligor or of any other
guarantor under this Agreement or any other Loan Document or by operation of law
or otherwise;

(b) any modification or amendment of or supplement to this Agreement or any
other Loan Document;

(c) any change in the corporate existence, structure, or ownership of, or any
insolvency, bankruptcy, reorganization, or other similar proceeding affecting,
the Borrower or other obligor, any other guarantor, or any of their respective
assets, or any resulting release or discharge of any obligation of the Borrower
or other obligor or of any other guarantor contained in any Loan Document;

 

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(d) the existence of any claim, set-off, or other rights which the Borrower or
other obligor or any other guarantor may have at any time against the
Administrative Agent, any Lender, or any other Person, whether or not arising in
connection herewith;

(e) any failure to assert, or any assertion of, any claim or demand or any
exercise of, or failure to exercise, any rights or remedies against the Borrower
or other obligor, any other guarantor, or any other Person or Property;

(f) any application of any sums by whomsoever paid or howsoever realized to any
obligation of the Borrower or other obligor, regardless of what obligations of
the Borrower or other obligor remain unpaid, other than the payment in full of
the indebtedness, obligations and liabilities guarantied hereby, but subject to
the last sentence of Section 12.3;

(g) any invalidity or unenforceability relating to or against the Borrower or
other obligor or any other guarantor for any reason of this Agreement or of any
other Loan Document or any provision of applicable law or regulation purporting
to prohibit the payment by the Borrower or other obligor or any other guarantor
of the principal of or interest on any Note or any Reimbursement Obligation or
any other amount payable under the Loan Documents; or

(h) any other act or omission to act or delay of any kind by the Administrative
Agent, any Lender, or any other Person or any other circumstance whatsoever that
might, but for the provisions of this paragraph, constitute a legal or equitable
discharge of the obligations of any Guarantor under this Section 12.

Section 12.3. Discharge Only upon Payment in Full; Reinstatement in Certain
Circumstances. Each Guarantor’s obligations under this Section 12 shall remain
in full force and effect until the Revolving Credit Commitments are terminated,
all Letters of Credit have expired, and the principal of and interest on the
Notes and all other amounts payable by the Borrower and the Guarantors under
this Agreement and all other Loan Documents and, if then outstanding and unpaid,
all Hedging Liability and Funds Transfer and Deposit Account Liability shall
have been paid in full. If at any time any payment of the principal of or
interest on any Note or any Reimbursement Obligation or any other amount payable
by the Borrower or other obligor or any Guarantor under the Loan Documents is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy, or reorganization of the Borrower or other obligor or of any
guarantor, or otherwise, each Guarantor’s obligations under this Section 12 with
respect to such payment shall be reinstated at such time as though such payment
had become due but had not been made at such time.

Section 12.4. Subrogation. Each Guarantor agrees it will not exercise any rights
which it may acquire by way of subrogation by any payment made hereunder, or
otherwise, until all the Obligations, Hedging Liability, and Funds Transfer and
Deposit Account Liability shall have

 

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been paid in full subsequent to the termination of all the Revolving Credit
Commitments and expiration of all Letters of Credit. If any amount shall be paid
to a Guarantor on account of such subrogation rights at any time prior to the
later of (x) the payment in full of the Obligations, Hedging Liability, and
Funds Transfer and Deposit Account Liability and all other amounts payable by
the Borrower hereunder and the other Loan Documents and (y) the termination of
the Revolving Credit Commitments and expiration of all Letters of Credit, such
amount shall be held in trust for the benefit of the Administrative Agent and
the Lenders and shall forthwith be paid to the Administrative Agent for the
benefit of the Lenders or be credited and applied upon the Obligations, Hedging
Liability, and Funds Transfer and Deposit Account Liability, whether matured or
unmatured, in accordance with the terms of this Agreement.

Section 12.5. Waivers. Each Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest, and any notice not provided for herein, as well as
any requirement that at any time any action be taken by the Administrative
Agent, any Lender, or any other Person against the Borrower or other obligor,
another guarantor, or any other Person.

Section 12.6. Limit on Recovery. Notwithstanding any other provision hereof, the
right of recovery against each Guarantor under this Section 12 shall not exceed
$1.00 less than the lowest amount which would render such Guarantor’s
obligations under this Section 12 void or voidable under applicable law,
including, without limitation, fraudulent conveyance law.

Section 12.7. Stay of Acceleration. If acceleration of the time for payment of
any amount payable by the Borrower or other obligor under this Agreement or any
other Loan Document, or under any agreement establishing Hedging Liability or
Funds Transfer and Deposit Account Liability, is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower or such obligor, all such amounts
otherwise subject to acceleration under the terms of this Agreement or the other
Loan Documents, or under any agreement relating to Hedging Liability or Funds
Transfer and Deposit Account Liability, shall nonetheless be payable by the
Guarantors hereunder forthwith on demand by the Administrative Agent made at the
request of the Required Lenders.

Section 12.8. Benefit to Guarantors. The Borrower and the Guarantors are engaged
in related businesses and integrated to such an extent that the financial
strength and flexibility of the Borrower has a direct impact on the success of
each Guarantor. Each Guarantor will derive substantial direct and indirect
benefit from the extensions of credit hereunder.

Section 12.9. Guarantor Covenants. Each Guarantor shall take such action as the
Borrower is required by this Agreement to cause such Guarantor to take, and
shall refrain from taking such action as the Borrower is required by this
Agreement to prohibit such Guarantor from taking.

SECTION 13.    MISCELLANEOUS.

Section 13.1. Withholding Taxes. (a) Payments Free of Withholding. Except as
otherwise required by law and subject to Section 13.1(b) hereof, each payment by
the Borrower and the Guarantors under this Agreement or the other Loan Documents
shall be made without

 

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withholding for or on account of any present or future taxes (other than overall
net income taxes on the recipient and any United States federal withholding
taxes imposed under FATCA) imposed by or within the jurisdiction in which the
Borrower or such Guarantor is domiciled, any jurisdiction from which the
Borrower or such Guarantor makes any payment, or (in each case) any political
subdivision or taxing authority thereof or therein. If any such withholding is
so required, the Borrower or such Guarantor shall make the withholding, pay the
amount withheld to the appropriate governmental authority before penalties
attach thereto or interest accrues thereon, and forthwith pay such additional
amount as may be necessary to ensure that the net amount actually received by
each Lender and the Administrative Agent free and clear of such taxes (including
such taxes on such additional amount) is equal to the amount which that Lender
or the Administrative Agent (as the case may be) would have received had such
withholding not been made. If the Administrative Agent or any Lender pays any
amount in respect of any such taxes, penalties or interest, the Borrower or such
Guarantor shall reimburse the Administrative Agent or such Lender for that
payment on demand in the currency in which such payment was made. If the
Borrower or such Guarantor pays any such taxes, penalties or interest, it shall
deliver official tax receipts evidencing that payment or certified copies
thereof to the Lender or Administrative Agent on whose account such withholding
was made (with a copy to the Administrative Agent if not the recipient of the
original) on or before the thirtieth day after payment.

(b) U.S. Withholding Tax Exemptions. Each Lender that is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) shall submit
to the Borrower and the Administrative Agent on or before the date the initial
Credit Event is made hereunder or, if later, the date such financial institution
becomes a Lender hereunder, two duly completed and signed copies of (i) either
Form W-8 BEN (relating to such Lender and entitling it to a complete exemption
from withholding under the Code on all amounts to be received by such Lender,
including fees, pursuant to the Loan Documents and the Obligations) or Form
W-8 ECI (relating to all amounts to be received by such Lender, including fees,
pursuant to the Loan Documents and the Obligations) of the United States
Internal Revenue Service or (ii) solely if such Lender is claiming exemption
from United States withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of “portfolio interest”, a Form W-8 BEN, or any
successor form prescribed by the Internal Revenue Service, and a certificate
representing that such Lender is not a bank for purposes of Section 881(c) of
the Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the Borrower and is not a controlled
foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Code). Thereafter and from time to time, each Lender
shall submit to the Borrower and the Administrative Agent such additional duly
completed and signed copies of one or the other of such Forms (or such successor
forms as shall be adopted from time to time by the relevant United States taxing
authorities) and such other certificates as may be (i) requested by the Borrower
in a written notice, directly or through the Administrative Agent, to such
Lender and (ii) required under then-current United States law or regulations to
avoid or reduce United States withholding taxes on payments in respect of all
amounts to be received by such Lender, including fees, pursuant to the Loan
Documents or the Obligations. Upon the request of the Borrower or the
Administrative Agent, each Lender that is a United States person (as such term
is defined in Section 7701(a)(30) of the Code) shall submit to the Borrower and
the Administrative Agent a certificate to the effect that it is such a United
States person.

 

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(c) Inability of Lender to Submit Forms. If any Lender determines, as a result
of any change in applicable law, regulation or treaty, or in any official
application or interpretation thereof, that it is unable to submit to the
Borrower or the Administrative Agent any form or certificate that such Lender is
obligated to submit pursuant to subsection (b) of this Section 13.1 or that such
Lender is required to withdraw or cancel any such form or certificate previously
submitted or any such form or certificate otherwise becomes ineffective or
inaccurate, such Lender shall promptly notify the Borrower and Administrative
Agent of such fact and the Lender shall to that extent not be obligated to
provide any such form or certificate and will be entitled to withdraw or cancel
any affected form or certificate, as applicable.

(d) Compliance with FATCA. If a payment made to a Lender under any Loan Document
would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender
were to fail to comply with the applicable reporting requirements of FATCA
(including those contained in Section 1471(b) or 1472(b) of the Code, as
applicable), such Lender shall deliver to the Borrower and the Administrative
Agent at the time or times prescribed by law and at such time or times
reasonably requested by the Borrower or the Administrative Agent such
documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Borrower or the Administrative Agent as may be
necessary for the Borrower and the Administrative Agent to comply with their
obligations under FATCA and to determine that such Lender has complied with such
Lender’s obligations under FATCA or to determine the amount to deduct and
withhold from such payment. Solely for purposes of this clause (d), “FATCA”
shall include any amendments made to FATCA after the date of this Agreement.

Section 13.2. No Waiver, Cumulative Remedies. No delay or failure on the part of
the Administrative Agent or any Lender or on the part of the holder or holders
of any of the Obligations in the exercise of any power or right under any Loan
Document shall operate as a waiver thereof or as an acquiescence in any default,
nor shall any single or partial exercise of any power or right preclude any
other or further exercise thereof or the exercise of any other power or right.
The rights and remedies hereunder of the Administrative Agent, the Lenders and
of the holder or holders of any of the Obligations are cumulative to, and not
exclusive of, any rights or remedies which any of them would otherwise have.

Section 13.3. Non-Business Days. If any payment hereunder becomes due and
payable on a day which is not a Business Day, the due date of such payment shall
be extended to the next succeeding Business Day on which date such payment shall
be due and payable. In the case of any payment of principal falling due on a day
which is not a Business Day, interest on such principal amount shall continue to
accrue during such extension at the rate per annum then in effect, which accrued
amount shall be due and payable on the next scheduled date for the payment of
interest.

Section 13.4. Documentary Taxes. The Borrower agrees to pay on demand any
documentary, stamp or similar taxes payable in respect of this Agreement or any
other Loan Document, including interest and penalties, in the event any such
taxes are assessed, irrespective of when such assessment is made and whether or
not any credit is then in use or available hereunder.

 

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Section 13.5. Survival of Representations. All representations and warranties
made herein or in any other Loan Document or in certificates given pursuant
hereto or thereto shall survive the execution and delivery of this Agreement and
the other Loan Documents, and shall continue in full force and effect with
respect to the date as of which they were made as long as any credit is in use
or available hereunder.

Section 13.6. Survival of Indemnities. All indemnities and other provisions
relative to reimbursement to the Lenders of amounts sufficient to protect the
yield of the Lenders with respect to the Loans and Letters of Credit, including,
but not limited to, Sections 1.12, 10.3, and 13.15 hereof, shall survive the
termination of this Agreement and the other Loan Documents and the payment of
the Obligations.

Section 13.7. Sharing of Set-Off. Each Lender agrees with each other Lender a
party hereto that if such Lender shall receive and retain any payment, whether
by set-off or application of deposit balances or otherwise, on any of the Loans
or Reimbursement Obligations in excess of its ratable share of payments on all
such Obligations then outstanding to the Lenders, then such Lender shall
purchase for cash at face value, but without recourse, ratably from each of the
other Lenders such amount of the Loans or Reimbursement Obligations, or
participations therein, held by each such other Lenders (or interest therein) as
shall be necessary to cause such Lender to share such excess payment ratably
with all the other Lenders; provided, however, that if any such purchase is made
by any Lender, and if such excess payment or part thereof is thereafter
recovered from such purchasing Lender, the related purchases from the other
Lenders shall be rescinded ratably and the purchase price restored as to the
portion of such excess payment so recovered, but without interest. For purposes
of this Section, amounts owed to or recovered by the L/C Issuer in connection
with Reimbursement Obligations in which Lenders have been required to fund their
participation shall be treated as amounts owed to or recovered by the L/C Issuer
as a Lender hereunder.

Section 13.8. Notices. Except as otherwise specified herein, all notices
hereunder and under the other Loan Documents shall be in writing (including,
without limitation, notice by telecopy) and shall be given to the relevant party
at its address or telecopier number set forth below, or such other address or
telecopier number as such party may hereafter specify by notice to the
Administrative Agent and the Borrower given by courier, by United States
certified or registered mail, by telecopy or by other telecommunication device
capable of creating a written record of such notice and its receipt. Notices
under the Loan Documents to the Lenders and the Administrative Agent shall be
addressed to their respective addresses or telecopier numbers set forth on the
signature pages hereof, and to the Borrower or any Guarantor to:

Penford Corporation

7094 South Revere Parkway

Centennial, Colorado 80112

Attention: Chief Financial Officer

Telephone: (303) 649-1900

Telecopy: (303) 649-1700

 

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Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section or on the signature pages hereof and a confirmation of
such telecopy has been received by the sender, (ii) if given by mail, 5 days
after such communication is deposited in the mail, certified or registered with
return receipt requested, addressed as aforesaid or (iii) if given by any other
means, when delivered at the addresses specified in this Section or on the
signature pages hereof; provided that any notice given pursuant to Section 1
hereof shall be effective only upon receipt.

Section 13.9. Counterparts. This Agreement may be executed in any number of
counterparts, and by the different parties hereto on separate counterpart
signature pages, and all such counterparts taken together shall be deemed to
constitute one and the same instrument.

Section 13.10. Successors and Assigns. This Agreement shall be binding upon the
Borrower and the Guarantors and their successors and assigns, and shall inure to
the benefit of the Administrative Agent and each of the Lenders and the benefit
of their respective successors and assigns, including any subsequent holder of
any of the Obligations. The Borrower and the Guarantors may not assign any of
their rights or obligations under any Loan Document without the written consent
of all of the Lenders.

Section 13.11. Participants. Each Lender shall have the right at its own cost to
grant participations (to be evidenced by one or more agreements or certificates
of participation) in the Loans made and Reimbursement Obligations and/or
Commitments held by such Lender at any time and from time to time to one or more
Eligible Assignees, subject to the consent of the Borrower (such consent not to
be unreasonably withheld or delayed) unless (x) an Event of Default has occurred
and is continuing at the time of such participation or (y) such participation is
to a Lender, an Affiliate of a Lender or an Approved Fund; provided that no such
participation shall relieve any Lender of any of its obligations under this
Agreement, and, provided, further that no such participant shall have any rights
under this Agreement except as provided in this Section, and the Administrative
Agent shall have no obligation or responsibility to such participant. Any
agreement pursuant to which such participation is granted shall provide that the
granting Lender shall retain the sole right and responsibility to enforce the
obligations of the Borrower under this Agreement and the other Loan Documents
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of the Loan Documents, except that such agreement may
provide that such Lender will not agree to any modification, amendment or waiver
of the Loan Documents that would reduce the amount of or postpone any fixed date
for payment of any Obligation in which such participant has an interest. Any
party to which such a participation has been granted shall have the benefits of
Section 1.11 and Section 10.3 hereof. The Borrower authorizes each Lender to
disclose to any participant or prospective participant under this Section any
financial or other information pertaining to the Borrower or any Subsidiary
thereof, provided that such participant or prospective participant shall have
agreed in writing prior to its receipt of such information to maintain all such
information confidential and not to disclose such information to any other
Person except any such information (a) that has become generally available to
the public, (b) if required or appropriate in any report, statement or testimony
submitted to any regulatory body having or claiming to have jurisdiction over
such Lender, (c) if required or appropriate in response to any summons or
subpoena or in connection with any litigation or (d) in order to comply with any

 

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law, order, regulation or ruling applicable to such Lender. Each Lender that
sells a participation shall, acting solely for this purpose as an agent of the
Borrower, maintain a register on which it enters the name and address of each
participant and the principal amounts (and stated interest) of each
participant’s interest in the Loans or other obligations under the Loan
Documents (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register (including
the identity of any participant or any information relating to a participant’s
interest in any Commitments, Loans, Letters of Credit or its other obligations
under any Loan Document) to any Person except to the extent that such disclosure
is necessary to establish that such Commitment, Loan, Letter of Credit or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations. The entries in the Participant Register shall be
conclusive absent manifest error, and such Lender shall treat each Person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the contrary.
For the avoidance of doubt, the Administrative Agent (in its capacity as
Administrative Agent) shall have no responsibility for maintaining a Participant
Register.

Section 13.12. Assignments. (a) Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of such Lender’s rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
at the time owing to it); provided that any such assignment shall be subject to
the following conditions:

(i) Minimum Amounts. (A) In the case of an assignment of the entire remaining
amount of the assigning Lender’s Commitment and the Loans and participation
interest in L/C Obligations at the time owing to it or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
amount need be assigned; and (B) in any case not described in subsection
(a)(i)(A) of this Section, the aggregate amount of the Commitment (which for
this purpose includes Loans and participation interest in L/C Obligations
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans and participation interest in L/C
Obligations of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent or, if “Effective Date” is specified in
the Assignment and Acceptance, as of the Effective Date) shall not be less than
$5,000,000, in the case of any assignment in respect of the Revolving Credit,
unless each of the Administrative Agent and, so long as no Event of Default has
occurred and is continuing, the Borrower otherwise consents (each such consent
not to be unreasonably withheld or delayed);

(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan or the Commitment
assigned, except that this clause (ii) shall not prohibit any Lender from
assigning all or a portion of its rights and obligations among separate Credits
on a non-pro rata basis.

 

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(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by Section 13.12(a)(i)(B) and, in addition:

(a) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (x) an Event of Default has occurred and is
continuing at the time of such assignment or (y) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund;

(b) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of the
Revolving Credit if such assignment is to a Person that is not a Lender with a
Commitment in respect of such facility, an Affiliate of such Lender or an
Approved Fund with respect to such Lender; and

(c) the consent of the L/C Issuer (such consent not to be unreasonably withheld
or delayed) shall be required for any assignment that increases the obligation
of the assignee to participate in exposure under one or more Letters of Credit
(whether or not then outstanding).

(iv) Assignment and Acceptance. The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance in the form of
Exhibit G, together with a processing and recordation fee of $3,500, and the
assignee, if it is not a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.

(v) No Assignment to Borrower or Parent. No such assignment shall be made to the
Borrower or any of its Affiliates, Joint Ventures or Subsidiaries or any Related
Party.

(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to Section 13.12(b) hereof, from and after the effective date specified in each
Assignment and Acceptance, the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to
the benefits of Sections 13.6 and 13.15 with respect to facts and circumstances
occurring prior to the effective date of such assignment. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this Section shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with Section 13.11 hereof.

(b) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at one of its offices in Chicago,
Illinois, a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall

 

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be conclusive, and the Borrower, the Administrative Agent, and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

(c) Any Lender may at any time pledge or grant a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender,
including any such pledge or grant to a Federal Reserve Bank, and this Section
shall not apply to any such pledge or grant of a security interest; provided
that no such pledge or grant of a security interest shall release a Lender from
any of its obligations hereunder or substitute any such pledgee or secured party
for such Lender as a party hereto; provided further, however, the right of any
such pledgee or grantee (other than any Federal Reserve Bank) to further
transfer all or any portion of the rights pledged or granted to it, whether by
means of foreclosure or otherwise, shall be at all times subject to the terms of
this Agreement.

Section 13.13. Amendments. Any provision of this Agreement or the other Loan
Documents may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by (a) the Borrower, (b) the Required Lenders, and
(c) if the rights or duties of the Administrative Agent or the L/C Issuer are
affected thereby, the Administrative Agent or such L/C Issuer, as applicable;
provided that:

(i) no amendment or waiver pursuant to this Section 13.13 shall (A) increase any
Commitment of any Lender without the consent of such Lender or (B) reduce the
amount of or postpone the date for any scheduled payment of any principal of or
interest on any Loan or of any Reimbursement Obligation or of any fee payable
hereunder without the consent of the Lender to which such payment is owing or
which has committed to make such Loan or Letter of Credit (or participate
therein) hereunder;

(ii) no amendment or waiver pursuant to this Section 13.13 shall, unless signed
by each Lender, change the definitions of Revolving Credit Termination Date or
Required Lenders, change the provisions of this Section 13.13, release any
material guarantor or any substantial part of the Collateral (except as
otherwise provided for in the Loan Documents), or affect the number of Lenders
required to take any action hereunder or under any other Loan Document; and

(iii) no amendment to Section 12 hereof shall be made without the consent of the
Guarantor(s) affected thereby.

Section 13.14. Headings. Section headings used in this Agreement are for
reference only and shall not affect the construction of this Agreement.

Section 13.15. Costs and Expenses; Indemnification. (a) Except as otherwise
provided hereunder, the Borrower agrees to pay all reasonable, actual
out-of-pocket costs and expenses of the Administrative Agent in connection with
the preparation, negotiation, syndication, and administration of the Loan
Documents, including, without limitation, the reasonable fees and

 

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disbursements of counsel to the Administrative Agent, in connection with the
preparation and execution of the Loan Documents, and any amendment, waiver or
consent related thereto, whether or not the transactions contemplated herein are
consummated, together with any fees and charges suffered or incurred by the
Administrative Agent in connection with periodic environmental audits, fixed
asset appraisals, title insurance policies, collateral filing fees and lien
searches. The Borrower further agrees to indemnify the Administrative Agent,
each Lender, and their respective directors, officers, employees, agents,
financial advisors, and consultants against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all reasonable expenses of litigation or preparation therefor, whether or not
the indemnified Person is a party thereto, or any settlement arrangement arising
from or relating to any such litigation) which any of them may pay or incur
arising out of or relating to any Loan Document or any of the transactions
contemplated thereby or the direct or indirect application or proposed
application of the proceeds of any Loan or Letter of Credit, other than those
which arise from the gross negligence or willful misconduct of the party
claiming indemnification. The Borrower, upon demand by the Administrative Agent
or a Lender at any time, shall reimburse the Administrative Agent or such Lender
for any legal or other expenses incurred in connection with investigating or
defending against any of the foregoing (including any settlement costs relating
to the foregoing) except if the same is directly due to the gross negligence or
willful misconduct of the party to be indemnified. The obligations of the
Borrower under this Section shall survive the termination of this Agreement.

(b) The Borrower unconditionally agrees to forever indemnify, defend and hold
harmless, and covenants not to sue for any claim for contribution against, the
Administrative Agent and the Lenders for any damages, costs, loss or expense,
including without limitation, response, remedial or removal costs, arising out
of any of the following: (i) any presence, release, threatened release or
disposal of any hazardous or toxic substance or petroleum by the Borrower or any
Subsidiary or otherwise occurring on or with respect to its Property (whether
owned or leased), (ii) the operation or violation of any environmental law,
whether federal, state, or local, and any regulations promulgated thereunder, by
the Borrower or any Subsidiary or otherwise occurring on or with respect to its
Property (whether owned or leased), (iii) any claim for personal injury or
property damage in connection with the Borrower or any Subsidiary or otherwise
occurring on or with respect to its Property (whether owned or leased), and
(iv) the inaccuracy or breach of any environmental representation, warranty or
covenant by the Borrower or any Subsidiary made herein or in any other Loan
Document evidencing or securing any Obligations or setting forth terms and
conditions applicable thereto or otherwise relating thereto, except for damages
arising from the willful misconduct or gross negligence of the party claiming
indemnification. This indemnification shall survive the payment and satisfaction
of all Obligations and the termination of this Agreement, and shall remain in
force beyond the expiration of any applicable statute of limitations and payment
or satisfaction in full of any single claim under this indemnification. This
indemnification shall be binding upon the successors and assigns of the Borrower
and shall inure to the benefit of Administrative Agent and the Lenders
directors, officers, employees, agents, and collateral trustees, and their
successors and assigns.

Section 13.16. Set-off. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default,

 

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each Lender and each subsequent holder of any Obligation is hereby authorized by
the Borrower and each Guarantor at any time or from time to time, without notice
to the Borrower or such Guarantor or to any other Person, any such notice being
hereby expressly waived, to set-off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts, and in whatever currency denominated) and any other
indebtedness at any time held or owing by that Lender or that subsequent holder
to or for the credit or the account of the Borrower or such Guarantor, whether
or not matured, against and on account of the Obligations of the Borrower or
such Guarantor to that Lender or that subsequent holder under the Loan
Documents, including, but not limited to, all claims of any nature or
description arising out of or connected with the Loan Documents, irrespective of
whether or not (a) that Lender or that subsequent holder shall have made any
demand hereunder or (b) the principal of or the interest on the Loans or Notes
and other amounts due hereunder shall have become due and payable pursuant to
Section 9 and although said obligations and liabilities, or any of them, may be
contingent or unmatured.

Section 13.17. Entire Agreement. The Loan Documents constitute the entire
understanding of the parties thereto with respect to the subject matter thereof
and any prior agreements, whether written or oral, with respect thereto are
superseded hereby.

Section 13.18. Governing Law. This Agreement and the other Loan Documents
(except as otherwise specified therein), and the rights and duties of the
parties hereto, shall be governed by and construed and determined in accordance
with the internal laws of the State of Illinois.

Section 13.19. Severability of Provisions. Any provision of any Loan Document
which is unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction. All rights, remedies and powers provided in
this Agreement and the other Loan Documents may be exercised only to the extent
that the exercise thereof does not violate any applicable mandatory provisions
of law, and all the provisions of this Agreement and other Loan Documents are
intended to be subject to all applicable mandatory provisions of law which may
be controlling and to be limited to the extent necessary so that they will not
render this Agreement or the other Loan Documents invalid or unenforceable.

Section 13.20. Excess Interest. Notwithstanding any provision to the contrary
contained herein or in any other Loan Document, no such provision shall require
the payment or permit the collection of any amount of interest in excess of the
maximum amount of interest permitted by applicable law to be charged for the use
or detention, or the forbearance in the collection, of all or any portion of the
Loans or other obligations outstanding under this Agreement or any other Loan
Document (“Excess Interest”). If any Excess Interest is provided for, or is
adjudicated to be provided for, herein or in any other Loan Document, then in
such event (a) the provisions of this Section shall govern and control,
(b) neither the Borrower nor any guarantor or endorser shall be obligated to pay
any Excess Interest, (c) any Excess Interest that the Administrative Agent or
any Lender may have received hereunder shall, at the option of the
Administrative Agent, be (i) applied as a credit against the then outstanding
principal amount of Obligations

 

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hereunder and accrued and unpaid interest thereon (not to exceed the maximum
amount permitted by applicable law), (ii) refunded to the Borrower, or (iii) any
combination of the foregoing, (d) the interest rate payable hereunder or under
any other Loan Document shall be automatically subject to reduction to the
maximum lawful contract rate allowed under applicable usury laws (the “Maximum
Rate”), and this Agreement and the other Loan Documents shall be deemed to have
been, and shall be, reformed and modified to reflect such reduction in the
relevant interest rate, and (e) neither the Borrower nor any guarantor or
endorser shall have any action against the Administrative Agent or any Lender
for any damages whatsoever arising out of the payment or collection of any
Excess Interest. Notwithstanding the foregoing, if for any period of time
interest on any of Borrower’s Obligations is calculated at the Maximum Rate
rather than the applicable rate under this Agreement, and thereafter such
applicable rate becomes less than the Maximum Rate, the rate of interest payable
on the Borrower’s Obligations shall remain at the Maximum Rate until the Lenders
have received the amount of interest which such Lenders would have received
during such period on the Borrower’s Obligations had the rate of interest not
been limited to the Maximum Rate during such period.

Section 13.21. Construction. NOTHING CONTAINED HEREIN SHALL BE DEEMED OR
CONSTRUED TO PERMIT ANY ACT OR OMISSION WHICH IS PROHIBITED BY THE TERMS OF ANY
OF THE OTHER LOAN DOCUMENT, THE COVENANTS AND AGREEMENTS CONTAINED HEREIN BEING
IN ADDITION TO AND NOT IN SUBSTITUTION FOR THE COVENANTS AND AGREEMENTS
CONTAINED IN THE OTHER LOAN DOCUMENTS.

Section 13.22. Lender’s Obligations Several. The obligations of the Lenders
hereunder are several and not joint. Nothing contained in this Agreement and no
action taken by the Lenders pursuant hereto shall be deemed to constitute the
Lenders a partnership, association, joint venture or other entity.

Section 13.23. Submission to Jurisdiction; Waiver of Jury Trial. The Borrower
and the Guarantors hereby submit to the nonexclusive jurisdiction of the United
States District Court for the Northern District of Illinois and of any Illinois
State court sitting in the City of Chicago for purposes of all legal proceedings
arising out of or relating to this Agreement, the other Loan Documents or the
transactions contemplated hereby or thereby. The Borrower and the Guarantors
irrevocably waive, to the fullest extent permitted by law, any objection which
they may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. THE BORROWER, THE GUARANTORS,
THE ADMINISTRATIVE AGENT, AND THE LENDERS HEREBY IRREVOCABLY WAIVE ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO ANY
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.

Section 13.24. USA Patriot Act. Each Lender that is subject to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”) hereby notifies the Borrower that pursuant to the
requirements of the Act, it is required to obtain, verify, and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender to
identify the Borrower in accordance with the Act.

 

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Section 13.25. Amendment and Restatement. This Agreement amends and restates the
Original Credit Agreement and is not intended to be or operate as a novation or
an accord and satisfaction of the Original Credit Agreement or the Obligations
evidenced or provided for thereunder. Without limiting the generality of the
foregoing, the Borrower agrees that notwithstanding the execution and delivery
of this Agreement and the Security Agreement, the Liens previously granted to
the Administrative Agent pursuant to the Collateral Documents shall be and
remain in full force and effect and that any rights and remedies of the
Administrative Agent thereunder and obligations of the Borrower thereunder shall
be and remain in full force and effect, shall not be affected, impaired or
discharged thereby and shall secure all of the Borrower’s indebtedness,
obligations and liabilities to the Administrative Agent and the Lenders under
the Original Credit Agreement as amended and restated hereby. Nothing herein
contained shall in any manner affect or impair the priority of the Liens created
and provided for by the Documents as to the indebtedness which would be secured
thereby prior to giving effect hereto.

Section 13.26. Equalization of Loans and Commitments. Upon the satisfaction of
the conditions precedent set forth in Section 7.2 hereof, all loans and letters
of credit outstanding under the Original Credit Agreement shall remain
outstanding as the initial Borrowing of Loans and Letters of Credit under this
Agreement and, in connection therewith, the Borrower shall be deemed to have
prepaid all outstanding Eurodollar Loans on the Closing Date. On the Closing
Date, the Lenders each agree to make such purchases and sales of interests in
the outstanding Loans and interests in outstanding Letters of Credit between
themselves so that each Lender is then holding its relevant Revolver Percentage
of outstanding Loans and L/C Obligations. Such purchases and sales shall be
arranged through the Administrative Agent and each Lender hereby agrees to
execute such further instruments and documents, if any, as the Administrative
Agent may reasonably request in connection therewith.

[SIGNATURE PAGES TO FOLLOW]

 

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This Fourth Amended and Restated Credit Agreement (including the paragraph set
forth above the Lenders’ signatures hereto) is entered into between us for the
uses and purposes hereinabove set forth as of the date first above written.

 

“BORROWER” PENFORD CORPORATION

By

 

 

 

Name

 

 

 

Title

 

 

 

“GUARANTORS” PENFORD PRODUCTS CO.

By

 

 

 

Name

 

 

 

Title

 

 

 

PENFORD CAROLINA, LLC

By:

 

Penford Products Co., Sole Member of

    Penford Carolina, LLC

By:

 

 

Name:

Title:

 

CAROLINA STARCHES, LLC

By:

 

Its Sole Member, Penford Carolina, LLC

By:

 

 

  Name:   Title:

 

Penford Corporation

Signature Page to Fourth Amended and Restated Credit Agreement

--------------------------------------------------------------------------------

“LENDERS”

BANK OF MONTREAL, in its individual capacity

    as a Lender, as L/C Issuer, and as

    Administrative Agent (as successor to Harris, N.A.)

By  

 

 

Name:

 

Title:

 

Address:

 

111 West Monroe Street

Chicago, Illinois 60603

Attention:

  Food and Consumer Group

Telecopy:

 

Telephone:

 

 

Penford Corporation

Signature Page to Fourth Amended and Restated Credit Agreement

--------------------------------------------------------------------------------

COÖPERATIEVE CENTRALE

    RAIFFEISEN-BOERENLEENBANK B.A.,

    “RABOBANK NEDERLAND,” NEW YORK BRANCH

By

 

 

 

Name

 

 

 

Title

 

 

By

 

 

 

Name

 

 

 

Title

 

 

 

Address:

 

123 North Wacker Drive

Suite 2100

Chicago, IL 60606

Attention:

 

Telecopy:

 

Telephone:

 

 

Penford Corporation

Signature Page to Fourth Amended and Restated Credit Agreement

--------------------------------------------------------------------------------

JPMORGAN CHASE BANK, N.A. By  

 

  Name  

 

  Title  

 

Address:  

 

 

 

Attention:  

 

Telecopy:   (            )    

 

Telephone:   (            )    

 

 

Penford Corporation

Signature Page to Fourth Amended and Restated Credit Agreement

--------------------------------------------------------------------------------

KEYBANK NATIONAL ASSOCIATION By  

 

  Name  

 

  Title  

 

Address:    

 

 

 

Attention:  

 

Telecopy:   (            )    

 

Telephone:   (            )    

 

 

Penford Corporation

Signature Page to Fourth Amended and Restated Credit Agreement

--------------------------------------------------------------------------------

FIRST MIDWEST BANK

By

 

 

 

Name

 

 

 

Title

 

 

Address:

770 West Dundee Road

Arlington Heights, Illinois 60004

Attention:

 

Telecopy:

 

Telephone:

 

 

Penford Corporation

Signature Page to Fourth Amended and Restated Credit Agreement

--------------------------------------------------------------------------------

PRIVATE BANK AND TRUST COMPANY By  

 

 

Name

 

 

 

Title

 

 

 

Address:

 

120 South LaSalle Street

Chicago, Illinois 60603

Attention:

 

Telecopy:

 

Telephone:

 

 

Penford Corporation

Signature Page to Fourth Amended and Restated Credit Agreement

--------------------------------------------------------------------------------

GREENSTONE FARM CREDIT SERVICES,

    ACA/FLCA

By  

 

  Name  

 

  Title  

 

Address:

 

 

 

Attention:   Telecopy:   (            )    

 

Telephone:   (            )    

 

 

Penford Corporation

Signature Page to Fourth Amended and Restated Credit Agreement

--------------------------------------------------------------------------------

BANK OF AMERICA, N.A.

By

 

 

 

Name

 

 

 

Title

 

 

Address:

 

 

 

Attention:

 

Telecopy:

 

(312)                                                                       

Telephone:

 

(312)                                                                       

 

Penford Corporation

Signature Page to Fourth Amended and Restated Credit Agreement