Document:

Exhibit
4.1

 

 

SUPPLEMENTAL INDENTURE NO. 13

 

by and between

 

HOSPITALITY PROPERTIES TRUST

 

and

 

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

 

 

as of August 12, 2009

 

 

SUPPLEMENTAL TO THE INDENTURE DATED AS OF FEBRUARY 25, 1998

 

 

 

HOSPITALITY PROPERTIES TRUST

 

7.875% Senior Notes due 2014

 

 

 

 

This SUPPLEMENTAL INDENTURE
NO. 13 (this “Supplemental Indenture”)
made and entered into as of August 12, 2009 between HOSPITALITY PROPERTIES
TRUST, a Maryland real estate investment trust (the “Company”), and U.S. BANK NATIONAL ASSOCIATION, a national
banking association, as Trustee (the “Trustee”).

 

WITNESSETH THAT:

 

WHEREAS, the Company and the
Trustee are parties to an Indenture, dated as of February 25, 1998 (the “Indenture”), relating to the Company’s
issuance, from time to time, of various series of debt securities;

 

WHEREAS, the Company has
determined to issue debt securities known as its 7.875% Senior Notes due 2014;
and

 

WHEREAS, the Indenture provides
that certain terms and conditions for each series of debt securities issued by
the Company thereunder may be set forth in an indenture supplemental to the
Indenture;

 

NOW, THEREFORE, THIS
SUPPLEMENTAL INDENTURE WITNESSETH:

 

ARTICLE 1

 

DEFINED TERMS

 

Section 1.1             Terms Defined in Indenture.  Capitalized terms used herein and not defined
herein have the meanings ascribed to such terms in the Indenture.

 

Section 1.2             Supplemental Definitions.  The following definitions supplement, and, to
the extent inconsistent with, replace the definitions in Section 101 of
the Indenture:

 

“Acquired Debt” means Debt of a Person (i) existing at
the time such Person becomes a Subsidiary or (ii) assumed in connection
with the acquisition of assets from such Person, in each case, other than Debt
incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary or such acquisition.  Acquired
Debt shall be deemed to be incurred on the date of the related acquisition of
assets from any Person or the date the acquired Person becomes a Subsidiary.

 

“Additional Notes” has the meaning provided in Section 2.1(b) hereof.

 

“Adjusted Total Assets” has the meaning provided in
clause (i) of Section 3.1(a) hereof.

 

“Annual Debt Service” as of any date means the maximum amount
which is expensed in any 12-month period for interest on Debt of the Company
and its Subsidiaries.

 

“Business Day” means any day other than a Saturday or Sunday
or a day on which banking institutions in The City of New York or in the city
in which the Corporate Trust Office of the Trustee is located are required or
authorized to close.

 

 

“Capital Stock” means, with respect to any Person, any
capital stock (including preferred stock), shares, interests, participation or
other ownership interests (however designated) of such Person and any rights
(other than debt securities convertible into or exchangeable for capital
stock), warrants or options to purchase any thereof.

 

“Consolidated Income Available for Debt Service” for any
period means Earnings from Operations of the Company and its Subsidiaries plus
amounts which have been deducted, and minus amounts which have been added, for
the following (without duplication): (i) interest on Debt of the Company
and its Subsidiaries, (ii) cash reserves made by lessees as required by
the Company’s leases for periodic replacement and refurbishment of the Company’s
assets, (iii) provision for taxes of the Company and its Subsidiaries
based on income, (iv) amortization of debt discount and deferred financing
costs, (v) provisions for gains and losses on properties and property depreciation
and amortization, (vi) the effect of any noncash charge resulting from a
change in accounting principles in determining Earnings from Operations for
such period and (vii) amortization of deferred charges.

 

“Corporate Trust Office” means One Federal Street, 3rd Floor,
Boston, Massachusetts 02110, or such other address as may be designated from
time to time by the Trustee by providing written notice to the Company.

 

“Debt” of the Company or any Subsidiary means, without
duplication, any indebtedness of the Company or any Subsidiary, whether or not
contingent, in respect of (i) borrowed money or evidenced by bonds, notes,
debentures or similar instruments, (ii) indebtedness for borrowed money
secured by any Encumbrance existing on property owned by the Company or any
Subsidiary, to the extent of the lesser of (x) the amount of indebtedness
so secured and (y) the fair market value of the property subject to such
Encumbrance, (iii) the reimbursement obligations, contingent or otherwise,
in connection with any letters of credit actually issued (other than letters of
credit issued to provide credit enhancement or support with respect to other
indebtedness of the Company or any Subsidiary otherwise reflected as Debt
hereunder) or amounts representing the balance deferred and unpaid of the
purchase price of any property or services, except any such balance that
constitutes an accrued expense or trade payable, or all conditional sale
obligations or obligations under any title retention agreement, (iv) the
principal amount of all obligations of the Company or any Subsidiary with
respect to redemption, repayment or other repurchase of any Disqualified Stock,
or (v) any lease of property by the Company or any Subsidiary as lessee
which is reflected on the Company’s consolidated balance sheet as a capitalized
lease in accordance with GAAP, to the extent, in the case of items of
indebtedness under (i) through (iii) above, that any such items
(other than letters of credit) would appear as a liability on the Company’s
consolidated balance sheet in accordance with GAAP, and also includes, to the
extent not otherwise included, any obligation by the Company or any Subsidiary
to be liable for, or to pay, as obligor, guarantor or otherwise (other than for
purposes of collection in the ordinary course of business), Debt of another
Person (other than the Company or any Subsidiary) (it being understood that
Debt shall be deemed to be incurred by the Company or any Subsidiary whenever
the Company or such Subsidiary shall create, assume, guarantee or otherwise
become liable in respect thereof).

 

“Depositary” has the meaning provided in Section 2.1(d) hereof.

 

2

 

“Disqualified Stock” means, with respect to any Person, any
Capital Stock of such Person which by the terms of such Capital Stock (or by
the terms of any security into which it is convertible or for which it is
exchangeable or exercisable), upon the happening of any event or otherwise (i) matures
or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise (other than Capital Stock which is redeemable solely in exchange for
common stock or shares), (ii) is convertible into or exchangeable or
exercisable for Debt or Disqualified Stock, or (iii) is redeemable at the
option of the Holder thereof, in whole or in part (other than Capital Stock
which is redeemable solely in exchange for common stock or shares), in each
case on or prior to the stated maturity of the Notes.

 

“Earnings from Operations” for any period means net earnings
excluding gains and losses on sales of investments, extraordinary items, gains
and losses from early extinguishment of debt and property valuation losses, as
reflected in the financial statements of the Company and its Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP.

 

“Encumbrance” means any mortgage, lien, charge, pledge or
security interest of any kind.

 

“Interest Payment Date” has the meaning provided in Section 2.1(e) hereof.

 

“Make-Whole Amount”
means, in connection with any optional
redemption or accelerated payment of any Notes prior to February 15, 2014,
the excess, if any, of (i) the aggregate present value as of the date of
such redemption or accelerated payment of each dollar of principal being
redeemed or paid and the amount of interest (exclusive of interest accrued to
the date of redemption or accelerated payment) that would have been payable in
respect of such dollar if such redemption or accelerated payment had been made
on February 15, 2014, determined by discounting, on a semiannual basis,
such principal and interest at the Reinvestment Rate (determined on the third
Business Day preceding the date such notice of redemption is given or
declaration of acceleration is made) from the respective dates on which such
principal and interest would have been payable if such redemption or
accelerated payment had been made on February 15, 2014, over (ii) the
aggregate principal amount of the Notes being redeemed or paid.  In the case of any redemption or accelerated
payment of notes on or after February 15, 2014, the Make-Whole Amount
means zero.  For purposes of this
Supplemental Indenture and the Notes, references in the Indenture to the
payment of the principal (and premium, if any) and interest on the Notes shall
be deemed to include the payment of the Make-Whole Amount, if any, due upon
redemption with respect to the Notes. 
The Make-Whole Amount shall be calculated by the Company and set forth
in an Officer’s Certificate delivered to the Trustee, and the Trustee shall be
entitled to rely on said Officer’s Certificate.

 

“Notes” means the Company’s 7.875% Senior Notes due 2014,
issued under this Supplemental Indenture and the Indenture, as amended or
supplemented from time to time.  (For the
avoidance of doubt, the term “Notes” shall include any Additional Notes so
issued.)

 

“Regular Record Date” has the meaning provided in Section 2.1(e) hereof.

 

“Reinvestment Rate” means a rate per annum equal to the sum
of 0.50% (50 one hundredths of one percent) plus the yield on treasury
securities at constant maturity under the 

 

3

 

heading
“Week Ending” published in the Statistical Release under the caption “Treasury
Constant Maturities” for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity (which, in the case of
maturities corresponding to the principal and interest due on the notes at
their maturity, shall be deemed to be February 15, 2014), as of the
payment date of the principal being redeemed or paid.  If no maturity exactly corresponds to such
maturity, yields for the two published maturities most closely corresponding to
such maturity shall be calculated pursuant to the immediately preceding
sentence and the Reinvestment Rate shall be interpolated or extrapolated from
such yields on a straight-line basis, rounding in each of such relevant periods
to the nearest month.  For purposes of
calculating the Reinvestment Rate, the most recent Statistical Release published
prior to the date of determination of the Make-Whole Amount shall be used.

 

“Secured Debt” means Debt secured by any mortgage, lien,
charge, pledge or security interest of any kind.

 

“Statistical Release” means the statistical release
designated “H.15(519)” or any successor publication which is published weekly
by the Federal Reserve System and which establishes yields on actively traded
United States government securities adjusted to constant maturities or, if such
statistical release is not published at the time of any determination under
this Supplemental Indenture, then any publicly available source of similar
market data which shall be designated by the Company.

 

“Subsidiary” means any corporation or other entity of which a
majority of (i) the voting power of the voting equity securities or (ii) the
outstanding equity interests of which are owned, directly or indirectly, by the
Company or one or more other Subsidiaries of the Company.  For the purposes of this definition, “voting
equity securities” means equity securities having voting power for the election
of directors, whether at all times or only so long as no senior class of
security has such voting power by reason of any contingency.

 

“Total Assets” as of any date means the sum of (i) the
Undepreciated Real Estate Assets and (ii) all other assets of the Company
and its Subsidiaries determined in accordance with GAAP (but excluding accounts
receivable and intangibles).

 

“Total Unencumbered Assets” means the sum of (i) those
Undepreciated Real Estate Assets not subject to an Encumbrance for borrowed
money and (ii) all other assets of the Company and its Subsidiaries not
subject to an Encumbrance for borrowed money determined in accordance with GAAP
(but excluding accounts receivable and intangibles).

 

“Undepreciated Real Estate Assets” as of any date means the
cost (original cost plus capital improvements) of, real estate assets of the
Company and its Subsidiaries on such date, before depreciation and amortization
determined on a consolidated basis in accordance with GAAP.

 

“Unsecured Debt” means Debt which is not secured by any of
the properties of the Company or any Subsidiary.

 

4

 

ARTICLE 2

 

TERMS OF THE NOTES

 

Section 2.1                                      Terms of the Notes.  Pursuant to Section 301 of the
Indenture, the Notes shall have the following terms and conditions:

 

(a)           Title.  The Notes shall be Registered Securities
under the Indenture and shall be known as the Company’s “7.875% Senior Notes
due 2014.”

 

(b)           Aggregate Principal Amount.  The aggregate principal amount of Notes to be
authenticated and delivered under this Supplemental Indenture shall initially
be limited to $300,000,000, except as otherwise permitted by the provisions of
the Indenture;
provided that the Company may from time to time, without the consent of the
Holders of the Notes, increase the principal amount of the Notes by issuing
additional Securities in the future (the “Additional Notes”) having the same terms and
ranking equally and ratably with the Notes in all respects and with the same
CUSIP number as the Notes, except for the difference in the issue price and
interest accrued prior to the issue date of such Additional Notes, provided
that such Additional Notes constitute part of the same issue as the Notes for
U.S. federal income tax purposes.  Any
Additional Notes will be treated as a single series with the Notes under the
Indenture and shall have the same terms as to status, redemption and otherwise
as the Notes, and references herein to the Notes shall include any Additional
Notes.

 

(c)           Form of Notes.  The Notes (together with the Trustee’s
certificate of authentication) shall be substantially in the form of Exhibit A
hereto, which is hereby incorporated in and made a part of this Supplemental
Indenture.  Any of the Notes may have such letters, numbers or
other marks of identification and such notations, legends, endorsements or
changes as the officers executing the same may approve (execution thereof to be
conclusive evidence of such approval) and as are not inconsistent with the
provisions of the Indenture, or as may be required by the Depositary or as may
be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed, or to conform to usage, or to indicate any special limitations or
restrictions to which any particular Notes are subject.

 

(d)           Registered Securities in Book
Entry Form.   The Notes shall be
issuable in the form of one or more global Securities registered in the name of
The Depository Trust Company’s nominee, and shall be deposited with, or on
behalf of, The Depository Trust Company, New York, New York (including any
successor depositary appointed hereunder, the “Depositary”).  The Notes may be surrendered for registration
of transfer at the office or agency of the Company (including the Corporate
Trust Office of the Trustee) maintained for such purpose, or at any other
office or agency maintained by the Company for such purpose.

 

So
long as the Depositary or its nominee is the registered owner of a Global Note,
the Depositary or its nominee, as the case may be, will be considered the sole
Holder of the Notes represented by such Global Note for all purposes under the
Indenture and this Supplemental Indenture, and the beneficial owners of the
Notes will be entitled only to those 

 

5

 

rights
and benefits afforded to them in accordance with the Depositary’s regular
operating procedures.  Except as provided
below, owners of beneficial interests in a Global Note will not be entitled to
have Notes registered in their names, will not receive or be entitled to
receive physical delivery of Notes in certificated form and will not be
considered the registered owners or Holders thereof under the Indenture or this
Supplemental Indenture.

 

If (i) the
Depositary is at any time unwilling or unable to continue as depository or if
at any time the Depositary ceases to be a clearing agency registered under the
Exchange Act and a successor depository is not appointed by the Company within
90 days, (ii) an Event of Default relating to the Notes has occurred and
is continuing and the beneficial owners representing a majority in principal
amount of the Notes advise the Depository to cease acting as depository for the
Notes, or (iii) the Company, in its sole discretion, determines at any
time that the Notes shall no longer be represented by a Global Note, the
Company will in accordance with the Indenture issue individual Notes in
certificated form of the same series and like tenor and in the applicable
principal amount in exchange for the Notes represented by the Global Note.  In any such instance, an owner of a beneficial
interest in a Global Note will be entitled to physical delivery of individual
Notes in certificated form of the same series and like tenor, equal in
principal amount to such beneficial interest and to have the Notes in
certificated form registered in its name. 
Notes so issued in certificated form will be issued in denominations of
$1,000 or any integral multiple thereof and will be issued in registered form
only, without coupons.

 

(e)           Interest and Interest Rate.  The Notes will bear interest at a rate of
7.875% per annum, from August 12, 2009 (or, in the case of Additional
Notes, as provided in Section 2.1(b) above), or from the immediately
preceding Interest Payment Date to which interest has been paid or duly
provided for, payable semi-annually in arrears on February 15 and August 15
of each year, commencing February 15, 2010, or if such day is not a
Business Day, on the next succeeding Business Day (each of which shall be an “Interest Payment Date”), to the Persons in
whose names the Notes are registered in the Security Register at the close of
business on the day falling 14 calendar days immediately preceding the
applicable Interest Payment Date (whether or not a Business Day), as the case
may be (each, a “Regular Record Date”).

 

(f)            Principal Repayment; Currency.  The stated maturity of the Notes is August 15,
2014; provided, however, the Notes may be earlier redeemed at the option of the
Company as provided in paragraph (g) below.  The principal of each Note payable on its
maturity date shall be paid against presentation and surrender thereof at the
Corporate Trust Office of the Trustee, in such coin or currency of the United
States of America as at the time of payment is legal tender for the payment of
public or private debts.  The Company
will not pay Additional Amounts (as defined in the Indenture) on the Notes.

 

(g)           Redemption at the Option of the Company. The Notes will be subject to redemption at any time at the
option of the Company, in whole or in part, upon not less than 30 nor more than
60 days’ notice to each Holder of Notes to be redeemed at its address appearing
in the Security Register, at a price equal to the sum of (i) the principal
amount of the Notes being redeemed, plus accrued and unpaid interest to but
excluding the applicable Redemption Date, plus (ii) the Make-Whole Amount,
if any (it being understood that if the notes are redeemed on or after February 15, 2014, the Make-Whole Amount equals
zero).

 

6

 

(h)           Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Company shall be directed to it at 400 Centre Street, Newton, Massachusetts
02458, Attention:  President; notices to
the Trustee shall be directed to it at One Federal Street, 3rd Floor, Boston,
Massachusetts 02110, Attention: Corporate Trust Department, Re: Hospitality
Properties Trust 7.875% Senior Notes due 2014, or as to either party, at such
other address as shall be designated by such party in a written notice to the
other party.

 

(i)            Global Note Legend.  Each Global Note shall bear the following
legend on the face thereto and any other appropriate legends specified in an
Officers’ Certificate:

 

UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

UNLESS AND UNTIL THIS
NOTE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS
NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE THEREOF
OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH
NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR.

 

ARTICLE 3

 

ADDITIONAL COVENANTS

 

Section 3.1                                      Additional Covenants
of the Company.  In addition to
the covenants of the Company set forth in Article Ten of the Indenture,
for the benefit of the Holders of the Notes:

 

(a)                                  Limitations on
Incurrence of Debt.

 

(i)            The
Company will not, and will not permit any Subsidiary to, incur any Debt if,
immediately after giving effect to the incurrence of such additional Debt and
the application of the proceeds thereof, the aggregate principal amount of all
outstanding Debt of the Company and its Subsidiaries on a consolidated basis
determined in accordance with GAAP is greater than 60% of the sum (“Adjusted Total Assets”) of (without
duplication) (A) the Total Assets of the Company and its Subsidiaries as
of the

 

7

 

end of the calendar quarter covered in the Company’s Annual Report on Form 10-K,
or the Quarterly Report on Form 10-Q, as the case may be, most recently
filed with the Securities and Exchange Commission (or, if such filing is not
permitted under the Securities Exchange Act of 1934, as amended, with the
Trustee) prior to the incurrence of such additional Debt and (B) the
purchase price of any real estate assets or mortgages receivable acquired, and
the amount of any securities offering proceeds received (to the extent that
such proceeds were not used to acquire real estate assets or mortgages
receivable or used to reduce Debt), by the Company or any Subsidiary since the
end of such calendar quarter, including those proceeds obtained in connection
with the incurrence of such additional Debt.

 

(ii)                                  In addition to the
foregoing limitation on the incurrence of Debt, the Company will not, and will
not permit any Subsidiary to, incur any Secured Debt if, immediately after
giving effect to the incurrence of such additional Secured Debt and the
application of the proceeds thereof, the aggregate principal amount of all
outstanding Secured Debt of the Company and its Subsidiaries on a consolidated
basis is greater than 40% of Adjusted Total Assets.

 

(iii)                               In addition to the
foregoing limitations on the incurrence of Debt, the Company will not, and will
not permit any Subsidiary to, incur any Debt if the ratio of Consolidated
Income Available for Debt Service to the Annual Debt Service for the four
consecutive fiscal quarters most recently ended prior to the date on which such
additional Debt is to be incurred shall have been less than 1.5 to 1.0, on a
pro forma basis after giving effect thereto and to the application of the
proceeds therefrom, and calculated on the assumption that (A) such Debt
and any other Debt incurred by the Company and its Subsidiaries since the first
day of such four-quarter period and the application of the proceeds therefrom,
including to refinance other Debt, had occurred at the beginning of such period;
(B) the repayment or retirement of any other Debt by the Company and its
Subsidiaries since the first date of such four-quarter period had been repaid
or retired at the beginning of such period (except that, in making such
computation, the amount of Debt under any revolving credit facility shall be
computed based upon the average daily balance of such Debt during such period);
(C) in the case of Acquired Debt or Debt incurred in connection with any
acquisition since the first day of such four-quarter period, the related
acquisition had occurred as of the first day of such period with appropriate
adjustments with respect to such acquisition being included in such pro forma
calculation; and (D) in the case of any acquisition or disposition by the
Company or its Subsidiaries of any asset or group of assets since the first day
of such four-quarter period, whether by merger, stock purchase or sale, or
asset purchase or sale, such acquisition or disposition or any related
repayment of Debt had occurred as of the first day of such period with the
appropriate adjustments with respect to such acquisition or disposition being
included in such pro forma calculation. If the Debt giving rise to the need to
make the foregoing calculation or any other Debt incurred after the first day
of the relevant four-quarter period bears interest at a floating rate then, for
purposes of calculating the Annual Debt Service, the interest rate on such Debt
shall be computed on a pro forma basis as if the average interest rate which would
have been in effect during the entire such four-quarter period had been the
applicable rate for the entire such period.

 

8

 

(b)                                 Maintenance of
Total Unencumbered Assets.  The
Company and its Subsidiaries will maintain at all times Total Unencumbered
Assets of not less than 150% of the aggregate outstanding principal amount of
the Unsecured Debt of the Company and its Subsidiaries on a consolidated basis.

 

ARTICLE 4

OTHER PROVISIONS

 

Section 4.1                                      Additional Event of
Default.  For purposes of this
Supplemental Indenture and the Notes, in addition to the Events of Default set
forth in Section 501 of the Indenture, it shall also constitute an “Event
of Default” if a default under any bond, debenture, note or other evidence of
indebtedness of the Company (including a default with respect to any other
series of securities), or under any mortgage, indenture or other instrument of
the Company under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company (or by any
Subsidiary, the repayment of which the Company has guaranteed or for which the
Company is directly responsible or liable as obligor or guarantor) having an
aggregate principal amount outstanding of at least $20,000,000, whether such
indebtedness now exists or shall hereafter be incurred or created, which
default shall have resulted in such indebtedness becoming or being declared due
and payable prior to the date on which it would otherwise have become due and
payable, without such indebtedness having been discharged or such acceleration
having been rescinded or annulled within a period of ten days after there shall
have been given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in principal
amount of the outstanding Notes, a written notice specifying such default and
requiring the Company to cause such indebtedness to be discharged or cause such
acceleration to be rescinded or annulled and stating that such notice is a “Notice
of Default” hereunder.

 

Section 4.2                                      Make-Whole Amount
Upon Acceleration.  Notwithstanding
any provisions to the contrary in the Indenture, upon any acceleration of the
Notes under Section 502 of the Indenture, the amount immediately due and
payable in respect of the Notes shall equal the Outstanding principal amount
thereof, plus accrued and unpaid interest thereon, plus, if such acceleration
occurs prior to February 15, 2014, the Make-Whole Amount.

 

Section 4.3                                      Applicability of
Discharge, Defeasance and Covenant Defeasance Provisions.  The Discharge, Defeasance and Covenant
Defeasance provisions in Article Fourteen of the Indenture will apply to
the Notes.

 

ARTICLE 5

EFFECTIVENESS

 

This Supplemental Indenture
shall be effective for all purposes as of the date and time this Supplemental
Indenture has been executed and delivered by the Company and the Trustee in
accordance with Article Nine of the Indenture.  As supplemented hereby, the Indenture is
hereby confirmed as being in full force and effect.

 

9

 

ARTICLE 6

MISCELLANEOUS

 

Section 6.1                                      Separability.  In the event any provision of this
Supplemental Indenture shall be held invalid or unenforceable by any court of
competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof or any provision of the Indenture.

 

Section 6.2                                      Construction of
Terms.  To the extent that any terms of
this Supplemental Indenture or the Notes are inconsistent with the terms of the
Indenture, the terms of this Supplemental Indenture or the Notes shall govern
and supersede such inconsistent terms.

 

Section 6.3                                      Effect of Headings. The Section headings herein are
for convenience only and shall not affect the construction hereof.

 

Section 6.4                                      Governing Law.  This Supplemental Indenture shall be governed
by and construed in accordance with the laws of The Commonwealth of
Massachusetts.

 

Section 6.5                                      Counterparts.  This Supplemental Indenture may be executed
in several counterparts, each of which shall be an original and all of which
shall constitute but one and the same instrument.

 

[Signature Page Follows]

 

10

 

IN WITNESS WHEREOF, the Company
and the Trustee have caused this Supplemental Indenture to be executed as an
instrument under seal in their respective corporate names as of the date first
above written.

 

	
   

  	
  HOSPITALITY
  PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:
  John G. Murray

  
	
   

  	
   

  	
  Title:
  President and Chief Operating Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

[Signature
Page to Supplemental Indenture No. 13]

 

 

EXHIBIT A

 

[Face of Note]

 

[Include only for Global Notes]

 

[UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

UNLESS AND UNTIL THIS
NOTE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS
NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE THEREOF
OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH
NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR.]

 

7.875% Senior Note due 2014

 

	
  No.

  	
   

  	
   

  	
  $

  	
   

  

 

HOSPITALITY PROPERTIES TRUST

 

promises
to pay to                                                                               
or registered assigns, the
principal sum of
                                      
($              )
on August 15, 2014, subject to
the terms set forth on the reverse of this Note and the terms of the Indenture
referred to therein.

 

Interest
Payment Dates:  Each February 15 and
August 15 (or if such day is not a Business Day, the next succeeding
Business Day), commencing February 15, 2010.

 

A-1

 

Record Dates:  The day falling 14
calendar days prior to any Interest Payment Date.

 

CUSIP No:  44106M AP7

ISIN No: US44106MAP77

 

	
   

  	
  HOSPITALITY PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

CERTIFICATE
OF AUTHENTICATION

 

Dated:

 

This
is one of the Notes referred to in the within-mentioned Indenture:

 

U.S.
BANK NATIONAL ASSOCIATION, as Trustee

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Officer

  	
   

  

 

A-2

 

[THE FOLLOWING CONSTITUTES THE REVERSE OF THE SECURITY]

 

HOSPITALITY PROPERTIES TRUST

 

7.875% Senior Note due 2014

 

Capitalized terms used herein
have the meanings assigned to them in the Indenture (as defined below) unless
otherwise indicated.

 

1.                                       Interest.  Hospitality Properties Trust, a Maryland real
estate investment trust (the “Company”),
promises to pay interest on the principal amount of this Note at the rate and
in the manner specified below.

 

The Company shall pay in cash
interest on the principal amount of this Note at the rate per annum of
7.875%.  The Company will pay interest
semi-annually in arrears on February 15 and August 15 of each year,
beginning on February 15, 2010, or if any such day is not a Business Day
(as defined in the Indenture), on the next succeeding Business Day (each an “Interest Payment Date”), to Holders of
record on the day falling 14 calendar days immediately preceding such Interest
Payment Date (whether or not a Business Day).

 

Interest will be computed on the
basis of a 360-day year consisting of twelve 30-day months.  Interest shall accrue from the most recent
date to which interest on the Notes has been paid or, if no interest has been
paid, from August 12, 2009.

 

2.                                       Method of Payment.  The Company will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the record date next preceding the Interest Payment
Date, even if such Notes are canceled after such record date and on or before
such Interest Payment Date.  The Company
will pay principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts.  The Company, however, may pay principal,
premium, if any, and interest by check payable in such money.  It may mail an interest check to a Holder’s
registered address.

 

3.                                       Indenture.  The Company issued the Notes under an
Indenture dated as of February 25, 1998 and Supplemental Indenture No. 13
dated as of August 12, 2009 (collectively, the “Indenture”), between the
Company and the Trustee.  The terms of
the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as in effect on the
date of the Indenture and Holders of the Notes are referred to the Indenture
and such Act for a statement of such terms. 
The terms of the Indenture shall govern any inconsistencies between the
Indenture and the Notes.  The Notes are
senior unsecured general obligations of the Company initially issued in an
aggregate principal amount of $300,000,000.

 

4.                                       Optional Redemption.  The Notes will be subject to redemption at
any time at the option of the Company, in whole or in part, upon not less than
30 nor more than 60 days’ notice, at a redemption price equal to the sum of (i) the
principal amount of the Notes being redeemed, 

 

A-3

 

plus accrued and unpaid interest to but excluding
the applicable Redemption Date and (ii) the Make-Whole Amount, if any.

 

As used herein the term “Make-Whole Amount” means, in
connection with any optional redemption or accelerated payment of any Notes
prior to February 15 , 2014,
the excess, if any, of (i) the
aggregate present value as of the date of such redemption or accelerated
payment of each dollar of principal being redeemed or paid and the amount of
interest (exclusive of interest accrued to the date of redemption or
accelerated payment) that would have been payable in respect of such dollar if
such redemption or accelerated payment had been made on February 15, 2014,
determined by discounting, on a semiannual basis, such principal and interest
at the Reinvestment Rate (determined on the third Business Day preceding the
date such notice of redemption is given or declaration of acceleration is made)
from the respective dates on which such principal and interest would have been
payable if such redemption or accelerated payment had been made on February 15, 2014, over (ii) the aggregate principal
amount of the Notes being redeemed or paid. 
In the case of any redemption or accelerated payment of notes on or
after February 15, 2014, the Make-Whole Amount means zero.  For purposes of the Indenture and the Notes,
references in the Indenture to the payment of the principal (and premium, if
any) and interest on the Notes shall be deemed to include the payment of the
Make-Whole Amount, if any, due upon redemption with respect to the Notes.  The Make-Whole Amount shall be calculated by
the Company and set forth in an Officer’s Certificate delivered to the Trustee,
and the Trustee shall be entitled to rely on said Officer’s Certificate.

 

As used herein the term “Reinvestment
Rate” means a rate per annum equal to the sum of 0.50% (50 one hundredths of
one percent) plus the yield on treasury securities at constant maturity under
the heading “Week Ending” published in the Statistical Release (as defined
herein) under the caption “Treasury Constant Maturities” for the maturity
(rounded to the nearest month) corresponding to the remaining life to maturity
(which, in the case of maturities corresponding to the principal and interest
due on the Notes at their maturity, shall be deemed to be February 15, 2014), as of the payment date of the principal being redeemed or
paid.  If no maturity exactly corresponds
to such maturity, yields for the two published maturities most closely
corresponding to such maturity shall be calculated pursuant to the immediately
preceding sentence and the Reinvestment Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding in each of
such relevant periods to the nearest month. 
For purposes of calculating the Reinvestment Rate, the most recent
Statistical Release published prior to the date of determination of the
Make-Whole Amount shall be used.

 

As used herein the term “Statistical
Release” means the statistical release designated “H.15(519)” or any successor
publication which is published weekly by the Federal Reserve System and which
establishes yields on actively traded United States government securities
adjusted to constant maturities or, if such statistical release is not
published at the time of any determination under the Indenture, then any
publicly available source of similar market data which shall be designated by
the Company.

 

5.                                       Mandatory
Redemption.  The Company
shall not be required to make sinking fund or redemption payments with respect
to the Notes.

 

A-4

 

6.                                       Notice of
Redemption.  Notice of
redemption shall be mailed at least 30 days but not more than 60 days before
the Redemption Date to each Holder of Notes to be redeemed at its registered
address.  Notes may be redeemed in part
but only in whole multiples of $1,000, unless all of the Notes held by a Holder
are to be redeemed.  On and after the
Redemption Date, interest ceases to accrue on Notes or portions of them called
for redemption.

 

7.                                       Denominations,
Transfer, Exchange.  The Notes are
in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000 in excess thereof. 
The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture.  The Security
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. 
The Security Registrar need not exchange or register the transfer of any
Note or portion of a Note selected for redemption.  Also, it need not exchange or register the
transfer of any Notes for a period of 15 days before the mailing of a notice of
redemption of Notes, or during the period between a record date and the
corresponding Interest Payment Date.

 

8.                                       Defaults and
Remedies.  In case an
Event of Default (as defined in the Indenture) with respect to the Notes shall
have occurred and be continuing, the principal hereof may be declared, and upon
such declaration shall become, due and payable, in the manner, with the effect
and subject to the provisions provided in the Indenture.

 

9.                                       Actions of Holders.  The Indenture contains provisions permitting
the Holders of not less than a majority of the aggregate principal amount of
the outstanding Notes, subject to certain exceptions as provided in the
Indenture, on behalf of the Holders of all such Notes at a meeting duly called
and held as provided in the Indenture, to make, give or take any request,
demand, authorization, direction, notice, consent, waiver or other action
provided in the Indenture to be made, given or taken by the Holders of the
Notes, including without limitation, waiving (a) compliance by the Company
with certain provisions of the Indenture, and (b) certain past defaults
under the Indenture and their consequences. 
Any resolution passed or decision taken at any meeting of the Holders of
the Notes in accordance with the provisions of the Indenture shall be
conclusive and binding upon such Holders and upon all future Holders of this
Note and other Notes issued upon the registration of transfer hereof or in
exchange heretofore or in lieu hereof.

 

10.                                 Persons Deemed
Owners.  The Company, the Trustee, and
any agent of the Company or the Trustee may deem and treat the Person in whose
name this Note is registered on the Security Register as its absolute owner for
all purposes.

 

11.                                 Authentication.  This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.

 

12.                                 Governing Law.  THE INTERNAL LAW OF THE COMMONWEALTH OF
MASSACHUSETTS SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE AND THE NOTES.

 

13.                                 No Personal
Liability.  THE DECLARATION
OF TRUST OF THE COMPANY, AMENDED AND RESTATED ON AUGUST 21, 1995, A COPY OF
WHICH, TOGETHER 

 

A-5

 

WITH ALL AMENDMENTS AND SUPPLEMENTS THERETO (THE “DECLARATION”),
IS DULY FILED IN THE OFFICE OF THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION
OF MARYLAND, PROVIDES THAT THE NAME “HOSPITALITY PROPERTIES TRUST” REFERS TO
THE TRUSTEES UNDER THE DECLARATION OF TRUST, AS SO AMENDED AND SUPPLEMENTED,
COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO
TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF THE COMPANY SHALL BE HELD
TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR
CLAIM AGAINST, THE COMPANY.  ALL PERSONS
DEALING WITH THE COMPANY, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF THE
COMPANY FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

The Company will furnish to any
Holder upon written request and without charge a copy of the Indenture.  Requests may be made to:

 

Hospitality
Properties Trust

400
Centre Street

Newton,
MA 02458

Telecopier
No.:  (617) 964-8389

Attention:
President

 

or such other address as
the Company may specify pursuant to the Indenture.

 

A-6

 

ASSIGNMENT FORM

 

To assign this Note, fill in the form below:

 

[I] [We] assign and transfer this Note to
                                                                                                                                                 
[Print or type assignee’s name, address and zip code]
                                                                    
[Insert assignee’s soc. sec. or tax I.D. no.]
and irrevocably
appoint                                                                                                                  
to transfer this Note on the books of the Company.  The agent may substitute another to act for
him.

 

	
  Date:

  	
   

  	
   

  	
   

  

 

	
  Signature
  Guaranteed

   

   

  	
   

  	
   

  
	
  NOTICE:
  Signature must be guaranteed by an eligible Guarantor Institution (banks,
  stockbrokers, savings and loan associations and credit unions) with
  membership in an approved signature guarantee medallion program pursuant to
  Securities and Exchange Commission Rule 17Ad-15.

  	
   

  	
  NOTICE: The
  signature to this Assignment must correspond with the name as written upon
  the face of the within Note in every particular, without alteration or
  enlargement or any change whatever.

  

 

A-7Exhibit 10.1

 

PROMISSORY NOTE

(Variable Rate, Revolving
Loan)

(Second Renewal Note)

 

	
  Not to Exceed
  $9,000,000.00

  	
   

  	
  Sioux Falls, South Dakota

  
	
   

  	
   

  	
  July 28, 2009

  

 

FOR VALUE RECEIVED, NORTHERN LIGHTS ETHANOL, LLC, a South Dakota Limited
Liability Company (“Borrower”), hereby promises to pay to the order of U.S.
BANK NATIONAL  ASSOCIATION, a national bunking association (“Lender”),
which term shall include any future holder hereof), at 141 N. Main Avenue,
Sioux Falls, South Dakota, or at such other place as Lender may from
time-to-time designate in writing, in lawful money of the United States of
America, the principal sum of Nine Million & 00/100 Dollars
($9,000,000.00) or so much thereof as may he advanced hereunder.

 

LOAN RENEWAL. This
Promissory Note renews the loan evidenced in part by that Promissory Note dated
September 21, 2007, in the original principal amount not to exceed
$9,000,000.00. The Promissory Note was renewed by a Renewal Note dated July 30,
2008, which extended the maturity date of the Promissory Note to July 28,
2009 (the “Prior Note”). The terms of the Prior Note apply until July 28,
2009, the date this Renewal Note becomes effective.

 

CALCULATION
OF INTEREST. Interest on each advance hereunder shall accrue at
an annual rate equal to 4.00% plus the one-month LIBOR rate quoted by Lender
(LIBOR + 4.00%), which shall be the one-month LIBOR rate in effect two New York
Banking Days prior to the stated monthly reprice date, adjusted for any reserve
requirement and any subsequent costs arising from a change in government
regulation, such rate to be reset monthly on the last day of the month. The
term “New York Banking Day” means any date (other than a Saturday or Sunday) on
which commercial banks are open for business in New York, New York. Lender’s internal
records of applicable interest rates shall be determinative in the absence of
manifest error. If the initial advance under this Note occurs other than on the
first day of the month, the initial one-month LIBOR rate shall be that
one-month LIBOR rate in effect two New York Banking Days prior to the date of
the initial advance, which rate shall be in effect on the remaining days of the
month of the initial advance.

 

PAYMENT OF INTEREST. Payments of all interest accrued hereunder shall
be made on the last day of any month in which any amount is outstanding
hereunder.

 

REVOLVING FEATURE, Borrower may
from time-to-time prior to the Maturity Date draw, on a revolving basis, the
difference of the outstanding principal amount hereunder and the lesser of (i) the
Borrowing Base and (ii) Nine Million Dollars ($9,000,000.00) (the  greater of the two being the “Loan
Maximum”). Lender’s obligation to make any advance under this Promissory Note
is conditioned upon (i) all representations and warranties made by Borrower
in the Loan Agreement remaining true, accurate and complete, (ii) Borrower’s
continued compliance with all other terms and conditions of tins Promissory
Note and the Loan Agreement including any preconditions to any advance
hereunder contained in the Loan Agreement, (iii) no Event of Default
having occurred tinder this Promissory Note, or any other Promissory Note
between the parties hereto, or under any other Loan Document, and (iv) Borrower
shall demonstrate to Lender’s satisfaction that the funds requested to be
advanced shall be used in the operation of Borrower’s ethanol production
facility. Subject to these conditions, Lender shall advance to Borrower
hereunder, such amounts as Borrower may from time-to-time request, not to
exceed the total principal amount at any one time outstanding hereunder of Nine
Million Dollars ($9,000,000.00). Such requests for advances hereunder shall be
funded the next Business Day if received by Lender not later than 11:00 am, of
any Business Day, subject to Lender requiring additional time to confirm
Borrower has satisfied the conditions of this Note (including the Borrowing
Base requirements provided for below) 

 

 

at the time each such
advance is requested and made.

 

PAYMENT  IN FULL AT MATURITY. The maturity date of
this Note is July 26, 2010 (the “Maturity Date’”). The total unpaid
principal amount and all interest thereon and any other amount due hereunder
shall be payable on the Maturity Date. THIS NOTE REQUIRES A BALLOON PAYMENT.

 

PAYMENT DUE ON NON-BUSINESS  DAY. In the event any payment due under this Note is due on a date
other than a Business Day (as defined in the Loan Agreement), such payment
shall be due on the Business Day immediately following the day the payment was
otherwise due.

 

PREPAYMENTS.
Borrower may prepay this Note in whole or in part at any time, and if
in part from time-to-time, during the entire term of this Note, without penalty
or premium. No prepayment shall reduce the amount of any scheduled payment.

 

MANDATORY
PAYMENTS PRIOR TO  MATURITY. In
the event the amount outstanding hereunder at any time, including interest and
any other amounts, exceeds the amount which could be borrowed on such date
according to the then applicable Borrowing Base (the “Eligible Balance”),
Borrower shall immediately pay to Lender an amount not less than the difference
between such balance and the Eligible Balance.

 

BORROWING
BASE. Definitions, As used in this
Promissory Note: “Borrowing Base” means, as of the day for which it is
calculated, .75 (75%) of the total of (i) the fair market value of the
outstanding inventory, (ii) the Eligible Accounts Receivable, and (iii) hedging
accounts at fair market value; “Inventory” means all Borrower’s corn, and
ethanol, and DDGS Inventory, as determined to Lender’s satisfaction; “Eligible
Accounts Receivable” means Accounts (as defined in the Uniform Commercial Code)
owned by Borrower that were generated by Borrower’s sate of Inventory, minus
Ineligible Accounts; “Ineligible Accounts” means Accounts which either have
been outstanding more than 90 days, or Accounts which otherwise would be
Eligible Accounts Receivable that Lender determines in Its discretion should
not so qualify. Eligible Accounts Receivable shall exclude Borrower’s “contra”
accounts and any other obligations or offsets which any of Borrower’s account
obligors may claim against Borrower.

 

Borrower
Reports. Each request for an advance hereunder shall be
accompanied by Borrower’s report to Lender evidencing the Borrowing Base as of
the close of the previous Business Day, in a form and containing such content
as Lender shall from time-to-time specify to Borrower, including but not
limited to: reports of the Borrower’s Accounts itemized by age; reports o the
inventory itemized by type, including its quantity, geographical location, and
information identifying any third party in possession or control thereof.
Borrower’s report shall also report Eligible Accounts Receivable on a gross
basis, and be itemized as to all offsets that may be claimed by any account
obligor as further set forth in the definition of Eligible Accounts Receivable
above. If at the end of any calendar month any amount is outstanding hereunder,
not later than the 15th day of the following month, Borrower shall provide
Lender a report containing the above information as of the end of such prior
month. Borrower shall also provide Lender such reports at other times specified
by Lender. The request for advances shall be on the form attached hereto as Exhibit A,
unless Lender specifies otherwise.

 

Reasonable
Processes and Controls. Borrower shall maintain reasonable processes
and controls, provide accurate calculation of the Borrowing Base and otherwise
assure compliance with the Lender’s collateral audit program, including
instituting policies requiring its employee marketers to accurately enter each
contract for purchase or sale of Inventory (including other relevant
information as to the status of the contract, including any dispute by the
other party thereto) into Borrower’s accounting system immediately upon entry
into the contract. Among other information which shall be available to 

 

2

 

Lender on a daily basis are
the amount, identity, location, telephone number and other relevant information
concerning each account obligor, and the locution and quantity of all
Inventory.

 

RENEWAL COMMITMENT FEE. In consideration of Lender’s
agreement to renew the loan evidenced by this Note, Borrower shall pay Lender
not later than the date of this Notice first shown above a renewal commitment
fee of one-fourth percent (0.25%) of Loan Maximum or Twenty-Two Thousand Five
Hundred Dollars ($22,500.00).

 

UNUSED COMMITMENT FEE. Borrower
shall pay Lender quarterly, in arrears, an unused commitment fee. The unused
commitment fee shall be paid October 31, January 31, April 30,
and July 31. The unused commitment fee is equal to one-half percent
(0.50%) per annum, multiplied by the difference, if any, of the Loan Maximum
minus the average daily outstanding principal balance due hereunder for such
prior quarter.

 

PAYMENTS. All payments
under this Note shall be made in immediately available funds. In the event
there is no outstanding Event of Default, all payments made hereunder shall be
credited first to accrued interest, next to unpaid principal, and next, in such
order as Lender may determined in its sole and absolute discretion, to other
fees, charges, or costs and expenses payable by Borrower under this Note or in
connection with any other Loan Document.

 

PREPAYMENTS. Borrower may
prepay this Note in whole or in part at any time, and if in part from
time-to-time, during the entire term of this Note, without penalty or premium.
No prepayment shall reduce the amount of any scheduled payment.

 

COLLATERAL;
COORDINATION WITH LOAN
AGREEMENT. This Note is within the definition of the “Note” in
the Amended and Restated Loan Agreement dated as of August 28, 2006,
(together with all amendments or other modifications thereto, the “Loan
Agreement”), and is subject to the additional terms and conditions set forth in
the Loan Agreement and the Loan Documents referred to therein. This Note is
secured in part by (and is a Secured Obligation as defined in) a Security
Agreement dated as of August 28, 2006, and a Mortgage - Collateral Real
Estate Mortgage; Security Agreement, Fixture Filing and Assignment of Rents
dated as of September 21, 2007 (as may be amended from time-to-time), as
well as other collateral described in the Loan Agreement and the other Loan
Documents. Capitalized terms not defined herein shall have the meaning given
such terms in the Loan Agreement.

 

LATE  PAYMENT;
GRACE PERIOD; DEFAULT; CROSS-DEFAULT. If a payment
due hereunder is not made within ten (10) days after the date when due,
Borrower shall pay to Lender a late payment charge of Five Hundred Dollars
($500.00) to compensate Lender for a portion of the cost related to handling
the overdue payment. Any default under this Promissory Note, the Security
Agreement dated August 28, 2006, or any Event of Default as defined in the
Loan Agreement, shall constitute an “Event of Default” for purposes of this
Note. After any Event of Default, the entire principal sum evidenced by this
Note, together with all accrued and unpaid interest, shall, at the option of
the holder hereof, bear interest at the rate per annum (the “Default Rate”)
equal to 3% in excess of the rate
of interest per annum which would otherwise be payable hereunder, and become
immediately due and payable without further notice (except as provided in the
Loan Agreement), demand or presentment for payment, and without any relief
whatever from any valuation or appraisement laws.

 

PAYMENT OF OTHER ITEMS. If Borrower
defaults under any of the terms of this Note, Borrower shall pay all reasonable
costs and expenses, including without limitation attorneys’ fees (including any
service tax thereon) and cost; incurred by Lender in enforcing this Note
immediately upon Lender’s demand, whether or not any action or proceeding is
commenced by Lender, Without limiting the generality of the preceding sentence,
such costs and expenses shall include all attorneys’ fees and costs 

 

3

 

incurred by Lender in
connection with any federal or state bankruptcy, insolvency, reorganization, or
other similar proceeding by or against Borrower or any surety, guarantor or
endorser of this Note which in any way affects Lender’s exercise of its rights
and remedies under this Note or under the Loan Agreement or any other Loan
Document. Maker hereby stipulates that Lender is a “regulated lender” within
the meaning of SDCL 54-3-13 and other applicable South Dakota statutes.

 

NO OFFSET. No
indebtedness evidenced by this Note shall be offset by all or part of any
claim, cause of action, or cross-claim of any kind, whether liquidated or
unliquidated, which Borrower now has or may hereafter acquire or allege to have
acquired against Lender. To the fullest extent permitted by law, Borrower
waives the benefits of any applicable law, regulation, or procedure which
provides, in substance, that where cross demands for money exist between
parties at any point in time when neither demand is barred by the applicable
statute of limitations, and an action is thereafter commenced by one such
party, the other party may assert the defense of payment in that the two
demands are compensated so far as they equal each other, notwithstanding that
an independent action asserting the claim would at the time of filing the
response be barred by the applicable statute of limitations.

 

CERTAIN BORROWER WAIVERS. Borrower
waives presentment, protest and demand, notice of protest, demand and of
dishonor and nonpayment of this Note and any lack of diligence or delays in
collection or enforcement of this Note. Borrower agrees that this Note, or any
payment hereunder, may be extended from time-to-time, and Borrower consents to
the release of any party liable for the obligation evidenced by this Note) the
release of any of the security for this Note, the acceptance of any other
security therefor, or any other indulgence or forbearance whatsoever, all
without notice to any party and without affecting the liability of Borrower.

 

APPLICABLE LAW. This note
shall be construed under and governed by the laws of the State of South Dakota,
without giving effect to conflict of laws or principles thereof, but giving
effect to federal laws of the United States applicable to national banks.
Whenever possible, each provision of this note and any other statement,
instrument or transaction contemplated hereby or relating hereto, shall be
interpreted in such manner as to be effective and valid under such applicable
law, hut, if any provision of this note or any other statement, instrument or
transaction contemplated hereby or relating hereto shall be held to be
prohibited or invalid under such applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this note or any other statement, instrument or transaction contemplated hereby
or relating hereto.

 

NO WAIVER; CERTAIN MISCELLMEOUS
PROVISIONS. Failure to exercise any option provided herein
shall not constitute a waiver of the right to exercise the same in the event of
any subsequent default. No modification or waiver by Lender of any of the terms
of this Note shall be valid or binding on Lender unless such modification or
waiver is In writing and signed by Lender, Without limiting the generality of
the preceding sentence, no delay, omission or forbearance by Lender in
exercising or enforcing any of its rights and remedies under this Note shall
constitute a waiver of such rights or remedies, Lender’s rights and remedies
under this Note are cumulative with and in addition to all other legal and
equitable rights and remedies Lender may have in connection with the Loan, The
headings of paragraphs of this Note are for convenience of the parties only and
shall not be used in interpreting this Note. If this Note is lost, stolen, or
destroyed, upon Borrower’s receipt of a reasonably satisfactory indemnification
agreement executed by Lender, or if this Note is mutilated, upon Lender’s
surrender of the mutilated Note to Borrower, Borrower shall execute and deliver
to Lender a new promissory note which is identical in form and content to this
Note to replace the lost, stolen, destroyed or mutilated Note. Time is of the
essence in the performance of each provision of this Note by Borrower. All
exhibits hereto are incorporated herein

 

4

 

AT THE OPTION OF LENDER,
THIS NOTE MAY BE ENFORCED IN ANY FEDERAL COURT OR SOUTH DAKOTA STATE COURT
SITTING IN SIOUX FALLS, SOUTH DAKOTA; AND  BORROWER CONSENTS TO THE
JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN
SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT BORROWER COMMENCES ANY ACTION IN
ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING
DIRECTLY OR INDIRECTLY PROM THE RELATIONSHIP CREATED BY THIS NOTE, LENDER AT
ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE
JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW) TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.

 

BORROWER AND LENDER EACH IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY [N ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS NOTE OR ANY OF THE LOAN DOCUMENTS (AS DEFINED IN THE LOAN AGREEMENT) OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

IN
WITNESS WHEREOF, Borrower has executed this Note as of the date first above
written.

 

	
   

  	
  NORTHERN
  LIGHTS ETHANOL, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Delton Strasser

  
	
   

  	
   

  	
  Delton
  Strasser

  
	
   

  	
  Its:

  	
  President

  

 

5

 

NORTHERN LIGHTS ETHANOL

BORROWING BASE CERTIFICATE

 

	
  U.S.
  Bank National Association

  	
   

  	
   

  
	
  141 N. Main Avenue

  	
   

  	
   

  
	
  Sioux Falls, SD 57104

  	
   

  	
  Date:

  

 

Accounts Receivable

	
  POET
  Ethanol Products

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  POET Nutrition

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Accounts Receivable

  	
   

  	
  $0

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deduct
  Ineligible Accounts

  (>90
  days from invoice date)

  Deduct
  Other ineligible Accounts

  (as determined by Bank)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Eligible
  Accounts Receivable

  	
   

  	
  $0

  	
   

  	
   

  	
   

  	
   

  
	
  Multiply
  by Advance Rate

  	
   

  	
  75.00%

  	
   

  	
   

  	
   

  	
   

  
	
  Accounts
  Receivable Available

  	
   

  	
   

  	
   

  	
  $0

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Inventory:

  Corn

  DDGS

  Ethanol

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Inventory

  	
   

  	
  $0

  	
   

  	
   

  	
   

  	
   

  
	
  Multiply by Advance Rate

  	
   

  	
  75.00%

  	
   

  	
   

  	
   

  	
   

  
	
  Inventory Available

  	
   

  	
   

  	
   

  	
  $0

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hedging
  Accounts:

  name

  name

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Hedging Accounts

  	
   

  	
  $0

  	
   

  	
   

  	
   

  	
   

  
	
  Multiply by Advance Rate

  	
   

  	
  75.00%

  	
   

  	
   

  	
   

  	
   

  
	
  Hedging Accounts Available

  	
   

  	
   

  	
   

  	
  $0

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Borrowing Base

  	
   

  	
   

  	
   

  	
  $0

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Outstanding Revolver Balance

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (not to exceed $9r000,000)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Surplus / (Paydown Required)

  	
   

  	
   

  	
   

  	
  $0

  	
   

  	
   

  

 

Northern
Lights Ethanol, LLC (“Borrower”) and U.S. Bank National Association (“Bank”)  are
party to a  Note and Security Agreement
dated September 21. 2007 as well as the Amended and Restated Loan
Agreement, as amended, dated August 28, 2006 (the “Loan Documents”). To
qualify for an advance under the $9,009,000 revolver, the undersigned hereby
reaffirms the Bank’s security interest in: all inventory, whether now owned or
hereafter acquired, and the proceeds thereof, and, each and every account
whether such right to payment now exists or hereafter arises, and the proceeds
thereof.  The undersigned also certifies
that the Borrowing Base as represented above is true and correct and that there
is no default under the aforementioned Loan Documents, or on any of the
Borrower’s obligations to the Bank.

 

	
   

  	
  Northern Lights Ethanol, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}]]