exv10w1






Exhibit 10.1




Penford Corporation




Second Amendment to Second Amended and Restated Credit Agreement,

Resignation of Agent 

and 

Appointment of Successor Agent 




     This Second Amendment to Second Amended and Restated Credit Agreement, Resignation of Agent
and Appointment of Successor Agent (herein, the “Amendment”) is entered into as of February 26,
2009, by and among Penford Corporation, a Washington corporation (the “Borrower”), the
direct and indirect Subsidiaries of the Borrower from time to time party to the Credit Agreement,
as Guarantors, the several financial institutions signing this Amendment as Lenders, and Harris N.
A., as a departing Lender (the “Departing Lender”) and resigning Administrative Agent (the
“Resigning Agent”), and Bank of Montreal, a Canadian chartered bank, acting through its Chicago
branch, as a new Lender and successor Administrative Agent (the “Successor Agent”).



Preliminary Statements




     A. The Borrower, the Guarantors, the Lenders and the Administrative Agent are parties to that
certain Second Amended and Restated Credit Agreement dated as of October 5, 2006 (the “Credit
Agreement”). All capitalized terms used herein without definition shall have the same meanings
herein as such terms have in the Credit Agreement.



     B. The Borrower and the Lenders have agreed to make certain amendments to the Credit
Agreement, in each case under the terms and conditions set forth in this Amendment.



     C. Harris N.A. has given notice of its intention to resign as Agent and the parties have
agreed to substitute Bank of Montreal (“BMO”), acting through its Chicago branch, for Harris N.A.
as Agent and, in connection therewith, to replace Harris N.A. as a Bank with BMO, all under the
terms and conditions set forth in this Amendment.



     Now, Therefore, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:



Section 1. Amendments to the Credit Agreement.




     Subject to the satisfaction of the conditions precedent set forth in Section 3 hereof, the
Credit Agreement shall be and hereby is amended as follows:



     1.1. Clause (c) of Section 1.14 of the Credit Agreement shall be amended to read as follows:




     (c) any Lender is then a Defaulting Lender or such Lender is a Subsidiary or Affiliate
of a Person who has been deemed insolvent or becomes the subject of a



 









 







bankruptcy or insolvency proceeding or a receiver or conservator has been appointed for any
such Person,



     1.2. The Credit Agreement shall be amended by adding the following provision thereto as
Section 1.16 thereof:




     Section 1.16. 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 1.16,
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 1.16. The
rights and remedies against a Defaulting Lender under this Section 1.16 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.



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     1.3. The first sentence of Section 2.1(b) of the Credit Agreement shall be amended by
replacing the figure “0.125%” appearing therein with the figure “0.25%”.



     1.4. The definitions of the following terms appearing in Section 5.1 of the Credit Agreement
shall be amended to read as follows:




     “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%.




     “EBITDA” means, with reference to any period, Net Income 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
(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 (d) $32,384,000 for the Borrower’s fiscal quarter ending August 31, 2008, minus
(e) $234,000 for the Borrower’s fiscal quarter ending November 30, 2008, plus (f) for each
fiscal quarter of the Borrower ending after November 30, 2008, and without duplication of
amounts otherwise included in the determination of EBITDA, the aggregate amount of (i) the
direct costs incurred by the Borrower and its Subsidiaries with respect to such fiscal
quarter to restore, repair or replace Property at the Borrower’s facilities in Cedar Rapids,
Iowa as a result of flooding that commenced during the month of June 2008 (the “June 2008
Flood”), which must be reasonably acceptable to the Administrative Agent, plus (ii) the
aggregate amount of all claims made by the Borrower and its Subsidiaries under its business
interruption insurance policies, including any deductibles, as a result of the June 2008
Flood during such fiscal quarter, which must be reasonably acceptable to the Administrative
Agent, minus (iii) the aggregate amount of all insurance proceeds, including business
interruption insurance proceeds, received by the Borrower and its Subsidiaries during such
fiscal quarter as a result of the June 2008 Flood to the extent included in Net Income.



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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
for such period plus (c) all Restricted Payments made by the Borrower during such period in
cash, plus (d) federal, state, and local income taxes paid 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 its Subsidiaries in cash during such period.



     1.5. The two tables appearing in the definition of the term “Applicable Margin” appearing in
Section 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:
	V
	 	Greater than or equal to	 	2.50%	 	3.50%	 	0.50%
	 
	 	3.25 to 1.0	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	IV
	 	Less than 3.25 to 1.0, but	 	2.25%	 	3.25%	 	0.50%
	 
	 	greater than or equal to	 	 	 	 	 	 
	 
	 	2.75 to 1.0	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	III
	 	Less than 2.75 to 1.0, but	 	2.00%	 	3.00%	 	0.50%
	 
	 	greater than or equal to	 	 	 	 	 	 
	 
	 	2.25 to 1.0	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	II
	 	Less than 2.25 to 1.0, but	 	1.75%	 	2.75%	 	0.50%
	 
	 	greater than or equal to	 	 	 	 	 	 
	 
	 	1.75 to 1.0	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	I
	 	Less than 1.75 to 1.0	 	1.50%	 	2.50%	 	0.50%






Until the date on which the Administrative Agent is in receipt of the Borrower’s financial
statements for the fiscal quarter ending February 28, 2009, the Applicable Margin shall be the
rates per annum shown opposite Level V in the table above.




     1.6. Section 5.1 of the Credit Agreement shall be amended by adding the following defined
terms thereto in the appropriate alphabetical order:




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




     “Defaulting Lender” means any Lender that (a) has failed to fund any portion of the
Loans, participations in Letters of Credit or Reimbursement Obligations or
participations in Swingline Loans required to be funded by it hereunder (herein, a
“Defaulted Loan”) within two Business Days of the date required to be funded by it hereunder
unless such failure has been cured, (b) has otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to paid by it hereunder
within two Business Days of the date when due, unless the subject of a good



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faith dispute or
unless such failure has been cured, or (c) has been deemed insolvent or become the subject
of a bankruptcy or insolvency proceeding or a receiver or conservator has been appointed for
such Lender.




     “Defaulting Lender Excess” means, with respect to any Defaulting Lender, the excess, if
any, of such Defaulting Lender’s Commitment 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 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
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 Commitments.




     “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 Reserve Percentage.



     1.7. Clause (i) of Section 8.12 of the Credit Agreement shall be amended to read as follows:




     (i) the making of any Restricted Payments by the Borrower so long as no Default or
Event of Default shall exist both before and after giving effect thereto and the aggregate
amount thereof does not exceed $4,000,000 during the fiscal year of the Borrower ending
August 31, 2009, and $8,000,000 in any fiscal year of the Borrower ending thereafter,



     1.8. The table appearing in Section 8.22(a) of the Credit Agreement shall be amended to read
as follows:



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	 	 	 	 	Total Funded Debt Ratio 
	From and Including	 	To and Including	 	shall not be more than
	September 1, 2008
	 	November 30, 2008
	 	4.25 to 1.0
	 	 	 	 	 
	December 1, 2008
	 	August 31, 2009
	 	4.00 to 1.0
	 	 	 	 	 
	September 1, 2009
	 	November 30, 2009
	 	3.25 to 1.0
	 	 	 	 	 
	December 1, 2009
	 	At all times thereafter
	 	3.00 to 1.0






     1.9. Section 8.22(d) of the Credit Agreement shall be amended to read as follows:




     (d) Capital Expenditures. The Borrower shall not, nor shall it permit any of its
Subsidiaries to, incur Capital Expenditures (but excluding (i) Capital Expenditures made
with the Net Cash Proceeds of any Event of Loss as permitted by Section 1.9(b)(i) hereof,
(ii) Capital Expenditures incurred in connection with the repair, restoration or replacement
of Property damaged or destroyed as a result of the flooding of the Borrower’s facilities in
Cedar Rapids, Iowa during the month of June, 2008, that the Borrower reasonably believes are
covered by insurance, for which at the time such expenditure is incurred the Borrower has
made or reasonably expects to make a written claim under the applicable insurance policy and
which claim has not been denied by the insurer, and (iii) Capital Expenditures made with the
proceeds of grants from governmental entities) in the aggregate amount of $12,000,000 (or
the Australian Dollar Equivalent or NZ Dollar Equivalent) during the Borrower’s fiscal year
ending August 31, 2009, and $20,000,000 (or the Australian Dollar Equivalent or NZ Dollar
Equivalent) in the aggregate during any fiscal year thereafter; provided, however, for any
fiscal year when Total Funded Debt Ratio is less than 2.0 to 1.0 for each fiscal quarter of
such fiscal year, Capital Expenditures for such year shall not exceed $25,000,000 (or the
Australian Dollar Equivalent or NZ Dollar Equivalent) for such fiscal year.



     1.10. Section 8.22 of the Credit Agreement shall be amended by adding the following provision
thereto as subsection (e) thereof:




     (e) Minimum EBITDA. The Borrower shall have EBITDA for each period of twelve
consecutive months ending on February 28, 2009, May 31, 2009, August 31, 2009, and
November 30, 2009, in an amount not less than $20,000,000.



     1.11. Schedule I attached to the form of Compliance Certificate attached to the Credit
Agreement as Exhibit E shall be replaced by Schedule I attached to this Amendment.



     1.12. The Required Lenders hereby agree that the Borrower and its Subsidiaries may use
proceeds of insurance on Property damaged or destroyed by the flooding of the Borrower’s facilities
in Cedar Rapids, Iowa during the month of June, 2008, to repay Revolving Loans under



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the Credit
Agreement that were used to repair, restore or replace Property damaged or destroyed by such floods
without having to comply with the requirements of Section 9(d) of the Mortgages or
Section 1.9(b)(i) of the Credit Agreement.



Section 2. Resignation of Agent and Appointment of Successor Agent.



     Subject to the satisfaction of the conditions precedent set forth in Section 3 below:




     2.1. Pursuant to Section 11.7 of the Credit Agreement, the Resigning Agent hereby resigns as
Administrative Agent under the Credit Agreement and all of the other Loan Documents. The Borrower
and the Lenders hereby accept such resignation, and the Borrower and the Banks hereby consent to
the appointment of the Successor Agent to act as Administrative Agent under the Credit Agreement
and the other Loan Documents, subject to all of the conditions and provisions of the Credit
Agreement and the other Loan Documents, to fill the vacancy created by the resignation of the
Resigning Agent, such resignation and appointment to be effective as of the effective date of this
Amendment (the “Effective Time”).



     2.2. The Resigning Agent hereby conveys, assigns, delegates and transfers to the Successor
Agent, and to its successors and assigns, all of the rights, powers, duties and obligations of the
Resigning Agent as Administrative Agent under and pursuant to the Credit Agreement and the other
Loan Documents and all liens and security interests in all Collateral held by the Resigning Agent
in its capacity as Administrative Agent.



     2.3. The Successor Agent hereby accepts the appointment as Administrative Agent under the
Credit Agreement and the other Loan Documents, subject to all the conditions and provisions of the
Credit Agreement and the other Loan Documents, and accepts and assumes all of the rights, powers,
duties and obligations of the Resigning Agent as Administrative Agent under and pursuant to the
Credit Agreement and the other Loan Documents and agrees to be bound by all the terms of the Credit
Agreement and the other Loan Documents, such acceptance and assumption to be effective as of the
Effective Time.



     2.4. The Resigning Agent, for the purpose of more fully and certainly vesting in and
confirming to the Successor Agent as Administrative Agent under the Credit Agreement and the other
Loan Documents, the rights and powers which the Resigning Agent now holds under and by virtue of
the Credit Agreement and the other Loan Documents, hereby agrees, upon reasonable request of the
Successor Agent, to execute, acknowledge and deliver such further instruments of conveyance and
further assurance and to do such other things as may reasonably be required for more fully and
certainly vesting in and confirming to the Successor Agent such rights and powers.



     2.5. Effective as of the Effective Time, all reference in the Credit Agreement and the other
Loan Documents to the Resigning Agent shall be deemed references to the Successor Agent.



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Section 3. Conditions Precedent.




     The effectiveness of this Amendment is subject to the satisfaction of all of the following
conditions precedent:




     3.1. The Borrower, the Guarantors, the Required Lenders, the Departing Lender, the Resigning
Agent and the Successor Agent shall have executed and delivered this Amendment.



     3.2. The Borrower shall have executed and delivered to the Successor Agent a Term Note in the
form of Exhibit D-1 to the Credit Agreement, a Capital Expansion Note in the form of Exhibit D-2 to
the Credit Agreement, a Revolving Note in the form of Exhibit D-3 to the Credit Agreement and a
Swing Note in the form of Exhibit D-4 to the Credit Agreement, each payable to the order of BMO.



     3.3. Each of the representations and warranties set forth in Section 6 of the Credit Agreement
shall be true and correct in all material respects, except that the representations and warranties
made under Section 6.5 shall be deemed to refer to the most recent financial statements of the
Borrower delivered to the Lenders and the June 2008 flooding at the Borrower’s Cedar Rapids, Iowa
facilities shall not be taken into account with respect to the representations and warranties made
under Section 6.6 of the Credit Agreement.



     3.4. Upon giving effect to this Amendment, (a) the Borrower shall be in full compliance with
all of the terms and conditions of the Loan Documents and (b) no Default or Event of Default shall
have occurred and be continuing thereunder or shall result after giving effect to this Amendment.



     3.5. The Successor Agent shall have received from the Borrower (a) all fees and expenses that
the Borrower has agreed to pay BMO in connection with this Amendment, which shall be solely for the
account of BMO, and (b) all fees that the Borrower has agreed to pay to the Lenders in connection
with this Amendment, which shall be for the ratable account of the Lenders, including BMO.



Section 4. Representations.



     In order to induce the Required Lenders to execute and deliver this Amendment, the Borrower
hereby represents to the Lenders that as of the date hereof, and after giving effect to the
amendments called for hereby, the representations and warranties set forth in Section 6 of the
Credit Agreement are and shall be and remain true and correct in all material respects (except that
for purposes of this paragraph the representations contained in Section 6.5 shall be deemed to
refer to the most recent financial statements of the Borrower delivered to the Lenders and the June
2008 flooding at the Borrower’s Cedar Rapids, Iowa facilities shall not be taken into account with
respect to the representations and warranties made under Section 6.6 of the Credit
Agreement) and after giving effect to this Amendment (a) the Borrower is in compliance with
all of the terms and conditions of the Loan Documents and (b) no Default or Event of Default exists
under the Credit Agreement or shall result after giving effect to this Amendment.



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Section 5. The Departing Lender.




          The Departing Lender hereby agrees to sell and assign without representation, recourse, or
warranty (except the Departing Lender represents it has authority to execute and deliver this
Amendment and sell all of the Obligations of the Borrower and the Guarantors to the Departing
Lender under the Loan Documents as contemplated hereby, which Obligations are owned by the
Departing Lender free and clear of all Liens), and simultaneously with the satisfaction of the
conditions precedent set forth in Sections 3 hereof, BMO hereby agrees to purchase 100% of the
Departing Lender’s outstanding Obligations hereunder and under the Loan Documents (including,
without limitation, all of the Loans held by the Departing Lender, together with an undivided
participation interest in the Departing Lender’s otherwise unparticipated interests in outstanding
Letters of Credit and Reimbursement Obligations) for a purchase price equal to the outstanding
principal balance of Loans owed to the Departing Lender hereunder as of the date hereof, which
purchase price shall be paid in immediately available funds on the date hereof. Such purchases and
sales shall be arranged through the Successor Agent and the Departing Lender hereby agrees to
execute such further instruments and documents, if any, as the Successor Agent may reasonably
request in connection therewith. Upon the execution and delivery of this Amendment by the
Departing Lender, the Lenders, the Resigning Agent, the Successor Agent, the Borrower and the
Guarantors and the payment of the purchase price owing to the Departing Lender pursuant hereto, the
Departing Lender shall cease to be a Lender hereunder and under the other Loan Documents, and
(i) BMO shall have the rights and obligations of the Departing Lender hereunder subject to the
terms and conditions hereof, and (ii) the Departing Lender shall have relinquished its rights
(other than (a) rights to indemnification and reimbursements referred to herein which survive the
repayment of the Obligations owed to the Departing Lender in accordance with its terms, including
Sections 1.3(e), 1.12, 10.3, 11.6 and 13.15 of the Credit Agreement, and (b) its right to receive
interest and fees accrued to the date hereof and remaining unpaid) and be released from its
obligations thereunder. It is understood that all unpaid interest and fees accrued to the date
hereof that are owed to the Departing Lender with respect to the interest assigned hereby are for
the account of the Departing Lender and such interest and fees accruing from and including the date
hereof are for the account of BMO. Each of the Departing Lender and BMO hereby agrees that if it
receives any amount hereunder which is for the account of the other, it shall receive the same for
the account of such other party to the extent of such other party’s interest therein and shall
promptly pay the same to such other party.




Section 6. Miscellaneous.



     6.1. The Borrower and the Guarantors heretofore executed and delivered to the Agent and the
Lenders the Collateral Documents to which it is a party. Each of the Borrower and the Guarantors
hereby acknowledges and agrees that the Liens created and provided for by the Collateral Documents
to which it is a party continue to secure, among other things, the indebtedness, obligations and
liabilities described therein; and the Collateral Documents to
which it is a party and the rights and remedies of the Agents and the Lenders thereunder, the
obligations of the Borrower and the Guarantors thereunder, and the Liens created and provided for
thereunder remain in full force and effect and shall not be affected, impaired or discharged
hereby. Nothing herein contained shall in any manner affect or impair the priority of the Liens



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created 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 this
Amendment.



     6.2. Except as specifically amended herein or waived hereby, the Credit Agreement shall
continue in full force and effect in accordance with its original terms. Reference to this
specific Amendment need not be made in the Credit Agreement, the other Loan Documents, or any other
instrument or document executed in connection therewith, or in any certificate, letter or
communication issued or made pursuant to or with respect to the Credit Agreement, any reference in
any of such items to the Credit Agreement being sufficient to refer to the Credit Agreement as
amended hereby.



     6.3. This Amendment may be executed in any number of counterparts, and by the different
parties on different counterpart signature pages, all of which taken together shall constitute one
and the same agreement. Any of the parties hereto may execute this Amendment by signing any such
counterpart and each of such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of Illinois.



     6.4. The Borrower agrees to pay all reasonable out-of-pocket costs and expenses incurred by
the Administrative Agent in connection with the credit facilities and the preparation, execution
and delivery of this Amendment, and the documents and transactions contemplated hereby, including
the reasonable fees and expenses of counsel for the Administrative Agent with respect to the
foregoing.



[Remainder of Page Intentionally Left Blank]




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          This Second Amendment to Second Amended and Restated Credit Agreement, Resignation of Agent
and Appointment of Successor Agent is entered into as of the date and year first above written.




	 	 	 	 	 	 	 	 	 
	 	 	“Borrower”	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Penford Corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	“Guarantors”	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Penford Products Co.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title	 	 	 	 
	 

	 	 	 	 	 	 	 	 





Penford Corporation

Signature Page to Second Amendment

to Second Amended and Restated Credit Agreement, Resignation of Agent and

Appointment of Successor Agent




 









 





     Accepted and agreed to as of the date and year last above written.



	 	 	 	 	 	 	 	 	 
	 	 	“Lenders”	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Harris N.A., in its individual capacity
as the Departing Lender and as Resigning
Agent
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Bank of Montreal, in its individual
capacity as a Lender, as L/C Issuer, and as
Successor Agent
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	U.S. Bank National Association	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Bank of America, National Association,
as Successor by Merger to LaSalle Bank,
National Association
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title	 	 	 	 
	 

	 	 	 	 	 	 	 	 





Penford Corporation

Signature Page to Second Amendment

to Second Amended and Restated Credit Agreement, Resignation of Agent and

Appointment of Successor Agent




 









 





	 	 	 	 	 	 	 	 	 
	 	 	Cooperative Centrale
Raiffeisen-Boerenleenbank B.A., “Rabobank
Nederland,” New York Branch
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Australia and New Zealand Banking Group
Limited	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title	 	 	 	 
	 

	 	 	 	 	 	 	 	 





Penford Corporation

Signature Page to Second Amendment

to Second Amended and Restated Credit Agreement, Resignation of Agent and

Appointment of Successor Agent




 









 





Schedule I

to Compliance Certificate




Penford Corporation




Compliance Calculations

for Second Amended and Restated Credit Agreement

dated as of October 5, 2006, as amended




Calculations as of                     , ___




	 	 	 	 	 
	A. Total Funded Debt Ratio (Section 8.22(a))
	 	 	 	 
	 
	 	 	 	 
	1. Total Funded Debt
	 	$	                    	 
	2. Net Income for past 4 quarters
	 	$	                    	 
	3. Interest Expense for past 4 quarters
	 	$	                    	 
	4. Income taxes for past 4 quarters
	 	$	                    	 
	5. Depreciation and Amortization Expense for past 4
quarters
	 	$	                    	 
	6. Non-cash Loss (Gain) realized on sale/disposition of
assets [Loss shall be identified by a positive number;
Gains shall be identified by a negative number]
	 	$	                    	 
	7. Non-cash stock compensation charges for past 4 quarters
	 	$	                    	 
	8. For the fiscal quarter ended August 31, 2008
	 	$	32,384,000	 
	9. For the fiscal quarter ended November 30, 2008
	 	$	234,000	 
	10. Direct flood-related charges and business interruption
insurance claims (including deductibles) made with respect
to the Borrower’s fiscal quarters ending after
November 30, 2008
	 	$	                    	 
	11. Sum of Lines A2, A3, A4, A5, A6, A7, A8 minus A9 plus
A10
	 	$	                    	 
	12. Flood-related insurance proceeds received during past
4 quarters (applies only after November 30, 2008)
	 	$	                    	 
	13. Line A11 minus A12 (“EBITDA”)
	 	$	                    	 
	14. Ratio of Line A1 to A13
	 	 	____:1.0	 
	15. Line A14 ratio must not exceed
	 	 	____:1.0	 






 









 






	 	 	 	 	 
	16. The Borrower is in compliance (circle yes or no)
	 	yes/no	 
	 
	 	 	 	 
	B. Fixed Charge Coverage Ratio (Section 8.22(b))
	 	 	 	 
	1. EBITDA (Line A13 above)
	 	$	                    	 
	2. Principal payments made in cash during past 4 quarters
	 	$	                    	 
	3. Interest Expense for past 4 quarters paid in cash
	 	$	                    	 
	4. Restricted Payments for past 4 quarters made in cash
	 	$	                    	 
	5. Income taxes for 4 quarters paid in cash
	 	$	                    	 
	6. Income tax refunds for 4 quarters received in cash
	 	$	                    	 
	7. Sum of Lines B2, B3, B4, and B5 minus Line B6
	 	$	                    	 
	8. Ratio of Line B1 to Line B7
	 	 	____:1.0	 
	9. Line B8 ratio must not be less than
	 	 	1.50:1.0	 
	10. The Borrower is in compliance (circle yes or no)
	 	yes/no	 
	 
	 	 	 	 
	C. Leverage Ratio (Section 8.22(c))
	 	 	 	 
	1. Net Worth
	 	$	                    	 
	2. Intangible Assets
	 	$	                    	 
	3. Write-up of assets
	 	$	                    	 
	4. Line C1 minus the sum of Lines C2 and C3
	 	$	                    	 
	5. Line C4 ratio must not be less than
	 	$	65,000,000	 
	6. The Borrower is in compliance (circle yes or no)
	 	yes/no	 
	 
	 	 	 	 
	D. Capital Expenditures (Section 8.22(d))
	 	 	 	 
	1. Year-to-date Capital Expenditures (net of permitted
exclusions other than for the Ethanol Facility)
	 	$	                    	 
	2. Maximum permitted amount
	 	$	                    	 
	3. The Borrower is in compliance (circle yes or no)
	 	yes/no	 
	 
	 	 	 	 
	E. Minimum EBITDA(Section 8.22(e))
	 	 	 	 
	1. EBITDA for 12-month period ended _______, 2009
	 	$	                    	 
	2. Minimum required amount
	 	$	20,000,000	 
	3. The Borrower is in compliance (circle yes or no)
	 	yes/no	 






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