Column B      Scheduled PrincipalColumn A   Payment on Capital Payment Date   Expansion Loans 09/30/09    $1,000,000  12/15/09    $9,625,000  12/31/09    $1,000,000  03/31/10    $2,000,000  06/30/10    $2,000,000  09/30/10    $2,000,000 it being agreed that the final payment of both principal and interest not sooner paid on theCapital Expansion Loans shall be due and payable on November 30, 2010, the final maturity thereof.Each such principal payment shall be allocated to the Lenders holding the Capital Expansion Loans*pro rata*based upon their Capital Expansion Loan Percentages.     1.2. Sections 1.9(b)(i), (ii), (iii) and (iv) of the Credit Agreement shall be amended to readas follows:     (b) *Mandatory*. (i) (aa) If the Borrower or any Subsidiary shall at any time or fromtime to time make or agree to make a Disposition resulting in Net Cash Proceeds in excess of$500,000 (or the U.S. Dollar Equivalent thereof, if applicable) individually or on acumulative basis in any fiscal year of the Borrower or if the Borrower shall suffer an Eventof Loss, the Borrower shall promptly notify the Administrative Agent of such proposedDisposition or Event of Loss (including the amount of the estimated Net Cash Proceeds to bereceived by the Borrower or such Subsidiary in respect thereof).     (bb) Promptly upon receipt by the Borrower or such Subsidiary of the Net CashProceeds of any Disposition, the Borrower shall prepay first, the Term Loans and theprincipal installment of the Capital Expansion Loans due on December 15, 2009, ineach case until the Term Loans and such principal installment of the CapitalExpansion Loans are paid in full, second to the remaining principal installments onthe Capital Expansion Loans in the inverse order of maturity until paid in full, andthen the Revolving Loans, Swing Loans and L/C Obligations (or all outstanding Loansand L/C Obligations if an Event of Default exists) in an aggregate amount equal to100% of the amount of all such Net Cash Proceeds, subject to working capitaladjustments acceptable to the Administrative Agent. The amount of each suchprepayment shall be applied on a ratable basis among the relevant outstandingObligations based on the principal amounts (in U.S. Dollar Equivalent) thereof.     (cc) Promptly upon receipt by the Borrower or such Subsidiary of the Net CashProceeds of any Event of Loss, other than any Net Cash Proceeds
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required to be used to prepay the indebtedness permitted by Section 8.7(g) hereof, the Borrower shallprepay first, the Term Loans, the principal installment of the Capital ExpansionLoans due on December 15, 2009, and all other principal installments due on theCapital Expansion Loans in the inverse order of maturity, in each case until theTerm Loans and the Capital Expansion Loans are paid in full, and then the RevolvingLoans, Swing Loans and L/C Obligations (or all outstanding Loans and L/C Obligationsif an Event of Default exists) in an aggregate amount equal to 100% of the amount ofall such Net Cash Proceeds. The amount of each such prepayment shall be applied on aratable basis among the relevant outstanding Obligations based on the principalamounts (in the U.S. Dollar Equivalent) thereof.     (ii) If after the Closing Date the Borrower or any Subsidiary shall issue new equitysecurities (whether common or preferred stock or otherwise), other than equity securitiesissued in connection with the Borrower’s 2006 Long-Term Incentive Plan or the exercise ofemployee stock options, the Borrower shall promptly notify the Administrative Agent of theestimated Net Cash Proceeds of such issuance to be received by or for the account of theBorrower or such Subsidiary in respect thereof. Promptly upon receipt by the Borrower orsuch Subsidiary of Net Cash Proceeds of such issuance, the Borrower shall prepay first, theTerm Loans and the principal installment of the Capital Expansion Loans due on December 15,2009, until the Term Loans and such principal installment of the Capital Expansion Loansare paid in full, second to the remaining principal installments on the Capital ExpansionLoans in the inverse order of maturity until paid in full, and then the Revolving Loans,Swing Loans and L/C Obligations (or all outstanding Loans and L/C Obligations if an Event ofDefault exists), in an aggregate amount equal to 100% of the amount of such Net CashProceeds. The amount of each such prepayment shall be applied on a ratable basis among therelevant outstanding Obligations based on the principal amounts (in U.S. Dollar Equivalent)thereof. The Borrower acknowledges that its performance hereunder shall not limit therights and remedies of the Lenders for any breach of Section 8.11 (Maintenance ofSubsidiaries) or Section 9.1(i) (Change of Control) hereof or any other terms of the LoanDocuments.     (iii) If after the Closing Date the Borrower or any Subsidiary shall issue anyIndebtedness for Borrowed Money, other than Indebtedness for Borrowed Money permitted bySections 8.7(a) through (f), (h) and (i) hereof, the Borrower shall promptly notify theAdministrative Agent of the estimated Net Cash Proceeds of such issuance to be received byor for the account of the Borrower or such Subsidiary in respect thereof. Promptly uponreceipt by the Borrower or such Subsidiary of Net Cash Proceeds of such issuance, theBorrower shall prepay first, the Term Loans and the principal installment of the CapitalExpansion Loans due on December 15, 2009, until the Term Loans and such principalinstallment of the Capital Expansion Loans are paid in full, second to the remainingprincipal installments on the Capital Expansion Loans until paid in full, and then theRevolving Loans, Swing Loans and L/C Obligations (or all outstanding Loansand L/C Obligations if an Event of Default exists), in an aggregate amount equal to 100% ofthe amount of such Net Cash Proceeds, *provided*that any prepayment made with Net
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Cash Proceeds of any Indebtedness for Borrowed Money permitted by Section 8.7(g) shall be appliedto the remaining amortization payments on the Capital Expansion Loans in the reverse orderof maturity. The amount of each such prepayment shall be applied on a ratable basis amongthe relevant outstanding Obligations based on the principal amounts (in U.S. DollarEquivalent) thereof. The Borrower acknowledges that its performance hereunder shall notlimit the rights and remedies of the Lenders for any breach of Section 8.7 hereof or anyother terms of the Loan Documents.     (iv) Within 90 days after the close of each fiscal year of the Borrower, beginning withthe fiscal year ending August 31, 2009, the Borrower shall prepay first, the CapitalExpansion Loans until the Capital Expansion Loans are paid in full and then the RevolvingLoans, Swing Loans and L/C Obligations (or all outstanding Loans and L/C Obligations if anEvent of Default exists), by an amount equal to 75% of Excess Cash Flow of the Borrower andits Subsidiaries for fiscal year. The amount of each such prepayment shall be applied on aratable basis among the relevant outstanding Obligations based on the principal amounts (inU.S. Dollar Equivalent) thereof. Each prepayment of the Capital Expansion Loans madepursuant to this subsection (iv) shall be applied to the principal installments of theCapital Expansion Loans in the inverse order of maturity.     1.3. Section 1.9(e) of the Credit Agreement shall be amended to read as follows:     (e) Intentionally omitted.     1.4. The definitions of the following terms appearing in Section 5.1 of the Credit Agreementshall be amended to read as follows:     *“EBITDA”*means, with reference to any period, Net Income for such period *plus*the sumof all amounts deducted in arriving at such Net Income amount in respect of (a) InterestExpense 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*(*minus*) any non-cash losses (gains) but only to the extent such losses (gains) have notbecome a cash loss (or gain), *plus*non-cash stock compensation charges incurred in suchperiod, *minus*(d) the aggregate amount of all insurance proceeds, including businessinterruption insurance proceeds, received by the Borrower and its Subsidiaries during suchfiscal quarter as a result of the flooding of the Borrower’s facilities in Cedar Rapids,that commenced during the month of June 2008 (the *“June 2008 Flood”*) to the extent includedin Net Income, *plus*(e) the aggregate amount of all severance charges incurred by theBorrower in such fiscal quarters, *provided*the aggregate amount of such charges that areadded to EBITDA pursuant to this clause (e) shall not exceed $2,500,000 during the term ofthis Agreement, *plus*(f) the amount of all non-cash charges incurred as a result of theaccounting treatment of interest rate hedging arrangements, *minus*(g) the amount of allnon-cash gains resulting from the accounting treatment of interest rate hedgingarrangements.
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     *“Fixed Charges”*means, with reference to any period, the sum of (a) all scheduledpayments of principal (excluding the scheduled principal installments on the CapitalExpansion Loans and the Term Loans due on December 15, 2009) paid in cash during suchperiod with respect to Indebtedness for Borrowed Money of the Borrower and its Subsidiariesplus (b) Interest Expense paid in cash for such period plus (c) all Restricted Payments madeby the Borrower during such period in cash, plus (d) federal, state, and local income taxespaid or payable by the Borrower and its Subsidiaries in cash during such period, *minus*(d)all federal, state, and local income tax refunds received by the Borrower and itsSubsidiaries in cash during such period.     *“L/C Sublimit”*means $1,500,000 as reduced pursuant to the terms hereof; *provided,however*that the L/C Sublimit may not be used for Letters of Credit issued for the benefitof Subsidiaries organized under the laws of the Commonwealth of Australia.     *“Revolving Credit Termination Date”*means November 30, 2010, or such earlier date onwhich the Revolving Credit Commitments are terminated in whole pursuant to Section 1.13, 9.2or 9.3 hereof.     *“Swing Line Sublimit”*means $1,000,000, as reduced pursuant to the terms hereof.     1.5. The table appearing in the definition of the term *“Applicable Margin”*appearing inSection 5.1 of the Credit Agreement shall be replaced with the following table:                       Applicable Margin for  Applicable Margin for  Applicable Margin     Total Funded Debt Base Rate Loans and  Eurocurrency Loans  for Revolving Credit      Ratio for Such  Reimbursement  and Letter of credit Fee  Commitment Fee Level Pricing Date Obligations shall be: Shall Be: Shall Be:III Greater than 4.00 to 1.0  4.00%  5.00%  0.75%II Less than or equal to4.00 to 1.0, but greaterthan 3.00 to 1.0  3.50%  4.50%  0.75% I  Less than or equal to 3.0  3.00%  4.00%  0.50%Until the date on which the Administrative Agent is in receipt of the Borrower’s financialstatements for the fiscal quarter ending August 31, 2009, the Applicable Margin shall be the ratesper annum shown opposite Level III in the table above.     1.6. Section 7.1 of the Credit Agreement shall be amended by replacing the period appearing atthe end of subsection (f) thereof with “; and” and by adding the following provision thereto assubsection (g) thereof:
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     (g) in the case of a Borrowing of Revolving Loans that would cause the aggregateprincipal amount of all outstanding Revolving Loans and L/C Obligations to exceed$52,500,000, the Required Lenders shall have given their prior written consent to suchBorrowing.     1.7. Section 8.5 of the Credit Agreement shall be amended by replacing the period appearing atthe end of subsection (l) thereof with a semi-colon and by adding the following provisions theretoas subsections (m), (n), (o) and (p) thereof:     (m) as soon as available, and in any event within twenty (20) days after the close ofeach of month that is not the last month of a fiscal quarter of the Borrower, a copy of themanagement-prepared consolidated and consolidating balance sheet of the Borrower and itsSubsidiaries as of the last day of such month and the consolidated and consolidatingstatements of income, retained earnings, and cash flows of the Borrower and its Subsidiariesfor the month and for the fiscal year to date period then ended, each in reasonable detailshowing in comparative form the figures for the corresponding date and period in theprevious fiscal year, prepared by the Borrower in accordance with GAAP (subject to theabsence of footnote disclosures and year end audit adjustments) and certified to by itschief financial officer or another officer of the Borrower acceptable to the AdministrativeAgent;     (n) as soon as available, and in any event within thirty (30) days after the close ofeach fiscal quarter of the Borrower other than the final fiscal quarter of the Borrower’sfiscal year, a copy of the management-prepared consolidated and consolidating balance sheetof the Borrower and its Subsidiaries as of the last day of such fiscal quarter and theconsolidated and consolidating statements of income, retained earnings, and cash flows ofthe Borrower and its Subsidiaries for the fiscal quarter and for the fiscal year to dateperiod then ended, each in reasonable detail showing in comparative form the figures for thecorresponding date and period in the previous fiscal year, prepared by the Borrower inaccordance with GAAP (subject to the absence of footnote disclosures and year end auditadjustments) and certified to by its chief financial officer or another officer of theBorrower acceptable to the Administrative Agent;     (o) as soon as available, and in any event within forty-five (45) days after the closeof the Borrower’s fiscal year, a copy of the management-prepared consolidated andconsolidating balance sheet of the Borrower and its Subsidiaries as of the last day of suchfiscal year 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, each inreasonable detail showing in comparative form the figures for the corresponding date andperiod 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) andcertified to by its chief financial officer or another officer of the Borrower acceptable tothe Administrative Agent; and     (p) no later than the third Business Day of each week (beginning July 15, 2009), theBorrower shall provide to the Administrative Agent and the Lenders a
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13-week cash flowforecast showing projected cash receipts and cash disbursements of the Borrower over thefollowing 13-week period, together with a reconciliation of actual cash receipts and cashdisbursements of the Borrower from the prior week against the cash flow forecast previouslyfurnished to the Administrative Agent and the Lenders (and showing any deviations on acumulative basis), prepared by the Borrower and in form and substance, and with such detail,as the Administrative Agent may request.     1.8. Section 8.7 of the Credit Agreement shall be amended to read as follows:*Section 8.7. Borrowings and Guaranties.*The Borrower shall not, nor shall it permit anySubsidiary to, issue, incur, assume, create or have outstanding any Indebtedness forBorrowed Money, or be or become liable as endorser, guarantor, surety or otherwise for anydebt, obligation or undertaking of any other Person, or otherwise agree to provide funds forpayment of the obligations of another, or supply funds thereto or invest therein orotherwise assure a creditor of another against loss, or apply for or become liable to theissuer of a letter of credit which supports an obligation of another, or subordinate anyclaim 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 AccountLiability of the Borrower and its Subsidiaries owing to the Administrative Agent orthe Lenders (and their Affiliates);     (b) purchase money indebtedness and Capitalized Lease Obligations of theBorrower and its Subsidiaries in an amount not to exceed $2,000,000 (or theAustralian Dollar Equivalent or NZ Dollar Equivalent) in the aggregate at any onetime outstanding;     (c) obligations of the Borrower arising out of interest rate and foreigncurrency, hedging agreements entered into with financial institutions in theordinary course of business and not for speculative purposes;     (d) endorsement of items for deposit or collection of commercial paper receivedin the ordinary course of business;     (e) indebtedness from time to time owing by Penford Holdings and itsSubsidiaries to the Borrower in an aggregate principal amount not to exceedUS$9,600,000 and indebtedness from time to time owing by Penford Holdings and itsSubsidiaries to the Borrower in an aggregate principal amount not to exceedAUS$32,000,000;     (f) indebtedness from time to time owing by any Subsidiary other than PenfordHoldings and its Subsidiaries to the Borrower (the *“Intercompany Indebtedness”*);
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     (g) unsecured indebtedness of the Borrower’s Subsidiaries to the IowaDepartment of Economic Development in an amount not to exceed $2,000,000 in theaggregate at any one time outstanding;     (h) unsecured indebtedness of the Borrower not otherwise permitted by thisSection in an amount not to exceed $500,000 in the aggregate at any one timeoutstanding; and     (i) unsecured indebtedness of the Borrower’s Foreign Subsidiaries in anaggregate principal amount not to exceed $3,000,000 (or the Australian DollarEquivalent thereof or New Zealand Dollar Equivalent thereof) at any time.     1.9. Section 8.9(g)(ii) of the Credit Agreement shall be amended by replacing the figure“$25,000,000” appearing therein with the figure “$100,000”.     1.10. Section 8.9(h) of the Credit Agreement shall be amended to read as follows:     (h) intentionally omitted;     1.11. Section 8.9(j) of the Credit Agreement shall be amended by replacing the figure“$20,000,000” appearing therein with the figure “$15,000,000”.     1.12. Section 8.12 of the Credit Agreement shall be amended to read as follows:     *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 otherdistributions in respect of any class or series of its capital stock or other equityinterests or (b) directly or indirectly purchase, redeem, or otherwise acquire or retire anyof its capital stock or other equity interests or any warrants, options, or similarinstruments to acquire the same (collectively, the *“Restricted Payments”*); *provided,however,*that the foregoing shall not operate to prevent the making of dividends ordistributions by any Wholly-owned Subsidiary of the Borrower to its parent corporation.     1.13. Effective as of May 31, 2009, Section 8.22 of the Credit Agreement has been amended toread as follows:     *Section 8.22. Financial Covenants.*(a) Intentionally omitted.     (b) *Fixed Charge Coverage Ratio*. As of the last day of each period specified below,the Borrower shall maintain a ratio of (a) EBITDA for each period specified below to (b)Fixed Charges for the same period of not less than the ratio set forth below opposite suchperiod:
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       Fixed Charge Coverage  Ratio shall not be LessPeriod thanThree months ending November 30, 2009  1.25 to 1.0      Six months ending February 28, 2010  1.25 to 1.0      Nine months ending May 31, 2010  1.35 to 1.0      Twelve moths ending August 31, 2010  1.50 to 1.0      (c) *Tangible Net Worth.*The Borrower shall maintain at all times Tangible Net Worth inan amount not less than $97,000,000 *minus*an amount acceptable to the Administrative Agentto reflect any reduction in the Borrower’s Tangible Net Worth attributable to the sale orother disposition of the capital stock or assets of Penford Holdings or any of itsSubsidiaries.     (d) *Capital Expenditures*. The Borrower shall not, nor shall it permit any of itsDomestic Subsidiaries to, incur Capital Expenditures (but excluding Capital Expendituresincurred on or prior to August 31, 2009, in connection with the repair, restoration orreplacement of Property damaged or destroyed as a result of the flooding of the Borrower’sfacilities in Cedar Rapids, Iowa during the month of June, 2008, that the Borrowerreasonably believes are covered by insurance, for which at the time such expenditure isincurred the Borrower has made or reasonably expects to make a written claim under theapplicable insurance policy and which claim has not been denied by the insurer) in excess ofthe aggregate amount of $6,500,000 in any fiscal year of the Borrower. The Borrower shallnot permit Penford Holdings and its Subsidiaries to incur Capital Expenditures in excess ofthe aggregate amount of $1,500,000 (or the Australian Dollar Equivalent or NZ DollarEquivalent) in any fiscal year of the Borrower,     (e) *Minimum EBITDA.*The Borrower shall have EBITDA for each period described below inan amount not less than the amount set forth below opposite such period:
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       EBITDA shall not be Less Period thanThree months ended May 31, 2009 -$5,000,000      Three months ending August 31, 2009 $1,000,000      Six months ending November 30, 2009 $6,000,000      Nine months ending February 28, 2010 $10,000,000      Twelve moths ending May 31, 2010 $16,000,000      Twelve moths ending August 31, 2010 $23,000,000      1.14. Schedule I attached to the form of Compliance Certificate attached to the CreditAgreement as Exhibit E shall be replaced by Schedule I attached to this Amendment.     1.15. No later than September 15, 2009 (or such later date as may be acceptable to theAdministrative Agent) the Borrower shall deliver, or cause to be delivered, to the AdministrativeAgent a date-down endorsement to each of the title insurance policies insuring the Mortgages whichshall be acceptable in form and substance to the Administrative Agent, as soon as practicable.The Borrower agrees that its failure to comply with the requirements of this Section willconstitute an Event of Default under Section 9.1(b) of the Credit Agreement.Section 2.Conditions Precedent.     The effectiveness of this Amendment is subject to the satisfaction of all of the followingconditions precedent:     2.1. The Borrower, the Guarantors, the Lenders and the Administrative Agent shall haveexecuted and delivered this Amendment.     2.2. Each of the representations and warranties set forth in Section 6 of the Credit Agreementshall be true and correct in all material respects, except that the representations and warrantiesmade (a) with respect to the Credit Agreement, shall be deemed to refer to the Credit Agreement asamended by this Amendment and (b) under Section 6.5 of the Credit Agreement, shall be deemed torefer to the most recent financial statements of the Borrower delivered to the Lenders.
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     2.3. Upon giving effect to this Amendment, (a) the Borrower shall be in full compliance withall of the terms and conditions of the Loan Documents and (b) no Default or Event of Default shallhave occurred and be continuing thereunder or shall result after giving effect to this Amendment.     2.4. The Administrative Agent shall have received from the Borrower all fees that the Borrowerhas agreed to pay to the Administrative Agent for its own account and for the account of theLenders, including Bank of Montreal.     2.5. The Borrower shall have paid, or reimbursed the Administrative Agent, for all legal feesand expenses incurred by the Administrative Agent in connection with this Amendment and thetransactions contemplated hereby for which an invoice has been submitted.     2.6. The Administrative Agent shall have received a copy of the Borrower’s 2006 Long-TermIncentive Plan, and all amendments thereto, certified as true, correct and complete by theBorrower’s secretary or assistant secretary.Section 3.Representations.     In order to induce the Lenders to execute and deliver this Amendment, the Borrower herebyrepresents to the Lenders that as of the date hereof, and after giving effect to the amendmentscalled for hereby, the representations and warranties set forth in Section 6 of the CreditAgreement are and shall be and remain true and correct in all material respects (except that forpurposes of this paragraph the representations contained in Section 6.5 shall be deemed to refer tothe most recent financial statements of the Borrower delivered to the Lenders) and after givingeffect to this Amendment (a) the Borrower is in compliance with all of the terms and conditions ofthe Loan Documents and (b) no Default or Event of Default exists under the Credit Agreement orshall result after giving effect to this Amendment.Section 4.Miscellaneous.     4.1. The Borrower and the Guarantors heretofore executed and delivered to the AdministrativeAgent and the Lenders the Collateral Documents to which it is a party. Each of the Borrower andthe Guarantors hereby acknowledges and agrees that the Liens created and provided for by theCollateral Documents to which it is a party continue to secure, among other things, theindebtedness, obligations and liabilities described therein; and the Collateral Documents to whichit is a party and the rights and remedies of the Administrative Agent and the Lenders thereunder,the obligations of the Borrower and the Guarantors thereunder, and the Liens created and providedfor thereunder remain in full force and effect and shall not be affected, impaired or dischargedhereby. Nothing herein contained shall in any manner affect or impair the priority of the Lienscreated and provided for by the Collateral Documents to which it is a party as to the indebtedness,obligations and liabilities which would be secured thereby prior to giving effect to thisAmendment.     4.2. Except as specifically amended herein or waived hereby, the Credit Agreement shallcontinue in full force and effect in accordance with its original terms. Reference to this
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specificAmendment need not be made in the Credit Agreement, the other Loan Documents, or any otherinstrument or document executed in connection therewith, or in any certificate, letter orcommunication issued or made pursuant to or with respect to the Credit Agreement, any reference inany of such items to the Credit Agreement being sufficient to refer to the Credit Agreement asamended hereby.     4.3. This Amendment may be executed in any number of counterparts, and by the differentparties on different counterpart signature pages, all of which taken together shall constitute oneand the same agreement. Any of the parties hereto may execute this Amendment by signing any suchcounterpart and each of such counterparts shall for all purposes be deemed to be an original. ThisAmendment shall be governed by the internal laws of the State of Illinois.     4.4. The Borrower agrees to pay all reasonable out-of-pocket costs and expenses incurred bythe Administrative Agent in connection with the credit facilities and the preparation, executionand delivery of this Amendment, and the documents and transactions contemplated hereby, includingthe reasonable fees and expenses of counsel for the Administrative Agent with respect to theforegoing.[Remainder of Page Intentionally Left Blank]
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This Third Amendment to Second Amended and Restated Credit Agreement is entered into as of thedate and year first above written.      *“Borrower”*