Exhibit 10.21

 

[FIRST TENNESEE LOGO]

 

PROMISSORY NOTE

 

Principal

 

Loan Date

 

Maturity

 

Loan No

 

Call / Call

 

Account

 

Officer

 

Initials

$1,500,000.00

 

06-30-2003

 

09-30-2003

 

 

 

04A1 / USEC

 

460418532

 

 

 

 

References in shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.

Any item above containing "* * *" has been omitted due to text length
limitations.

 

Borrower:

 

HF Financial Corp. (TIN: 46-0418532)

 

Lender:

 

First Tennessee Bank National Association

 

 

225 S. Main Street

 

 

 

Financial Institutions

 

 

Sioux Falls, SD 57117

 

 

 

845 Crossover Lane, Suite 150

 

 

 

 

 

 

Memphis, TN 38117

 

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Principal Amount: $1,500,000.00

 

Initial Rate: 3.750%

 

Date of Note: June 30, 2003

 

PROMISE TO PAY. HF Financial Corp. ("Borrower") promises to pay to First
Tennessee Bank National Association ("Lender"), or order, in lawful money of the
United States of America, the principal amount of One Million Five Hundred
Thousand & 00/100 Dollars ($1,500,000.00), together with interest on the unpaid
principal balance from June 30, 2003, until paid in full.

 

PAYMENT. Borrower will pay this loan in one principal payment of $1,500,000.00
plus interest on September 30, 2003.  This payment due on September 30, 2003,
will be for all principal and all accrued interest not yet paid.  Unless
otherwise agreed or required by applicable law, payments will be applied first
to accrued unpaid interest, then to principal, and any remaining amount to any
unpaid collection costs. The annual interest rate for this Note is computed on a
365/360 basis: that is, by applying the ratio of the annual interest rate over a
year of 360 days, multiplied by the outstanding principal balance, multiplied by
the actual number of days the principal balance is outstanding. Borrower will
pay Lender at Lender's address shown above or at such other place as Lender may
designate in writing.

 

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an index which is the Lender's base commercial
rate (the "Index"). The Index is not necessarily the lowest rate charged by
Lender on its loans and is set by Lender in its sole discretion. If the Index
becomes unavailable during the term of this loan, Lender may designate a
substitute index after notifying Borrower. Lender will tell Borrower the current
index rate upon Borrower's request. The interest rate change will not occur more
often than each day. Borrower understands that Lender may make loans based on
other rates as well. The Index currently is 4.000% per annum. The interest rate
to be applied to the unpaid principal balance of this Note will be at a rate of
0.250 percentage points under the Index, resulting in an initial rate of 3.750%
per annum. NOTICE: Under no circumstances will the interest rate on this Note be
more than the maximum rate allowed by applicable law.

 

PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed
earlier than it is due. Early payments will not, unless agreed to by Lender in
writing, relieve Borrower of Borrower's obligation to continue to make payments
under the payment schedule. Rather, early payments will reduce the principal
balance due. Borrower agrees not to send Lender payments marked "paid in full",
"without recourse", or similar language. If Borrower sends such a payment,
Lender may accept it without losing any of Lender's rights under this Note, and
Borrower will remain obligated to pay any further amount owed to Lender. All
written communications concerning disputed amounts, including any check or other
payment instrument that indicates that the payment constitutes "payment in full"
of the amount owed or that is tendered with other conditions or limitations or
as full satisfaction of a disputed amount must be mailed or delivered to: First
Tennessee Bank National Association, Financial Institutions, 845 Crossover Lane,
Suite 150, Memphis, TN 38117.

 

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final
maturity, Lender, at its option, may, if permitted under applicable law,
increase the variable interest rate on this Note to 21.000% per annum. In no
event will the effective total interest rate on this Note be greater than the
rate permitted by applicable law.

 

DEFAULT. Each of the following shall constitute an event of default ("Event of
Default") under this Note:

 

Payment Default. Borrower fails to make any payment when due under this Note.

 

Other Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Note or in any of the
related documents or to comply with or to perform any term, obligation, covenant
or condition contained in any other agreement between Lender and Borrower.

 

Default in Favor of Third Parties. Borrower or any Grantor defaults under any
loan, extension of credit, security agreement, purchase or sales agreement, or
any other agreement, in favor of any other creditor or person that may
materially affect any of Borrower's property or Borrower's ability to repay this
Note or perform Borrower's obligations under this Note or any of the related
documents.

 

False Statements. Any warranty, representation or statement made or furnished to
Lender by Borrower or on Borrower's behalf under this Note or the related
documents is false or misleading in any material respect, either now or at the
time made or furnished or becomes false or misleading at any time thereafter.

 

Insolvency. The dissolution or termination of Borrower's existence as a going
business, the insolvency of Borrower, the appointment of a receiver for any part
of Borrower's property, any assignment for the benefit of creditors, any type of
creditor workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.

 

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the loan. This includes a garnishment of any of
Borrower's accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Borrower as
to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice of
the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.

 

Events Affecting Guarantor. Any of the preceding events occurs with respect to
any guarantor, endorser, surety, or accommodation party of any of the
indebtedness or any guarantor, endorser, surety, or accommodation party dies or
becomes incompetent, or revokes or disputes the validity of, or liability under,
any guaranty of the indebtedness evidenced by this Note. In the event of a
death, Lender, at its option, may, but shall not be required to, permit the
guarantor's estate to assume unconditionally the obligations arising under the
guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of
Default.

 

Change in Ownership. Any change in ownership of twenty-five percent (25%) or
more of the common stock of the Borrower.

 

Adverse Change. A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of this
Note is impaired.

 

Cure Provisions. If any default, other than a default in payment is curable and
if Borrower has not been given a notice of a breach of the same provision of
this Note within the preceding twelve (12) months, it may be cured (and no event
of default will have occurred) if Borrower, after receiving written notice from
Lender demanding cure of such default: (1) cures the default within fifteen (15)
days; or (2) if the cure requires more than fifteen (15) days, immediately
initiates steps which Lender deems in Lender's sole discretion to be sufficient
to cure the default and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably
practical.

 

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, and then
Borrower will pay that amount.

 

Any payment not made when due hereunder (whether by acceleration or otherwise)
shall bear interest after maturity at the maximum effective contract rate of
interest which the Lender may lawfully charge.

 

In the event of any renewal or extension of the loan indebtedness evidenced
hereby, unless the parties otherwise agree to a lower rate, the Lender shall
have the right to charge interest at the highest of the following rates: (i) the
maximum rate permissible at the time the contract to make the loan was executed;
or (ii) the maximum rate permissible at the time the loan was made; or (iii) the
maximum rate permissible at the time of such renewal or extension; or (iv) the
maximum rate permitted by applicable federal law; it being intended that those
statutes and laws, state or federal, from time to time in effect, which permit
the charging of the higher rate of interest shall govern the maximum rate which
may be charged hereunder. In the event that for any reason the foregoing
provisions hereof shall not contain a valid, enforceable designation of a rate
of interest prior to maturity or method of determining the same, then the
indebtedness hereby evidenced shall bear interest prior to maturity at the
maximum effective rate which may be lawfully charged by the Lender under
applicable law.

 

Regardless of any provision herein, or in any other document executed in
connection herewith, the holder hereof shall never be entitled to

 

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receive, collect, or apply, as interest hereon, any amount in excess of the
maximum contract rate which may be lawfully charged by the holder hereof under
applicable law; and in the event the holder hereof ever receives, collect, or
applies at interest, any such excess, such amount which would be excessive
interest shall be deemed a partial prepayment of principal and treated hereunder
as such; and, if the principal hereof is paid in full, any remaining excess
shall forthwith be paid to the undersigned. In determining whether or not the
interest paid or payable, under any specific contingency, exceeds the maximum
lawful contract rate, the undersigned and the holder hereof shall, to the
maximum extent permitted by applicable law, (a) characterize any non-principal
payment as a reasonable loan charge, rather than as interest; (b) exclude
voluntary prepayments and the effects thereof; and (c) amortize, prorate,
allocate, and spread, in equal parts, the total amount of interest throughout
the entire contemplated term hereof, so that the interest accrued or to accrue
throughout the entire term contemplated hereby shall at no time exceed the
maximum lawful contract rate.

 

ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender's attorneys' fees
and Lender's legal expenses, whether or not there is a lawsuit, including
attorneys' fees, expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals. If not
prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law.

 

JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any
action, proceeding, or counterclaim brought by either Lender or Borrower against
the other.

 

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $28.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays is later dishonored.

 

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account).  This includes all accounts Borrower may open
in the future.  However, this does not include any IRA or Keogh accounts, or any
trust accounts for which setoff would be prohibited by law.  Borrower authorizes
Lender, to the extent permitted by applicable law, to charge or setoff all sums
owing on the debt against any and all such accounts, and, at Lender's option, to
administratively freeze all such accounts to allow Lender to protect Lender's
charge and setoff rights provided in this paragraph.

 

FINANCIAL STATEMENTS. The undersigned agrees to furnish a current financial
statement upon the request of Lender from time to time, and further agrees to
execute and deliver all other instruments and take such other actions as Lender
may from time to time reasonably request in order to carry out the provisions
and intent hereof.

 

LATE FEE. For any payment which is not made within 20 days of the due date for
such payment, the Borrower shall pay a late fee, including without limitation
loans which are renewed more than 20 days after the due date even though the
renewal may be dated as of the past-due payment date.  The late fee shall equal
the lesser of 5% of the unpaid portion of the past-due payment or $500.

 

ALTERNATIVE FUNDING. Lender may grant to any of its special purpose funding
vehicles (each an "SPC"), the option to provide all or any part of any loan the
Lender would otherwise be obligated to make pursuant to this Note.  In no event
shall any SPC be committed to make any loan.  The option granted to any SPC to
provide all or any part of any loan shall not alter the obligation of the Lender
to make loans pursuant to this Note.  Each SPC shall be conclusively presumed to
have made arrangements with its Lender for the exercise of voting and other
rights hereunder in a manner which is acceptable to the SPC.  Each party to this
Note agrees that no SPC shall be liable for any indemnity or similar payment
obligation under this Note (all liability for which shall remain with the
related Lender).  Each party to this Note agrees (which Note shall survive the
termination of this Note) that it will not institute against, or join any other
person in instituting against, such SPC any Bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or similar proceedings under
the laws of the United States or any State thereof prior to the date that is one
year and one day after the payment in full of all outstanding senior
indebtedness of any SPC.  Each SPC, may, at any time, with notice to the
Borrower assign all or a portion of its interests in any loans to its Lender (or
to any other SPC of such Lender) or to any financial institutions providing
liquidity and/or credit facilities to or for the account of such SPC for the
following purposes: (i) to fund the loans made by such SPC or (ii) to support
the securities (if any) issued by such SPC to fund such loans.  In addition,
each SPC may, at any time, with notice to and consent of the Borrower, disclose
on a confidential basis any non-public information relating to its loans to any
rating agency, commercial paper dealer or provider of a surety, guarantee or
credit or liquidity enhancement to such SPC. This Section may not be amended
without the consent of all SPC's then designated to the Borrower in accordance
with the foregoing provisions of this Section.

 

EXCLUSION FROM INDEBTEDNESS. Excluded from indebtedness shall be any
indebtedness governed by the Federal Truth in Lending Act. 

 

COLLATERAL. This loan is unsecured.

 

SUCCESSOR INTERESTS.  The terms of this Note shall be binding upon Borrower, and
upon Borrower's heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.

 

GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them.  Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, and notice of dishonor.  Upon any change in the
terms of this Note, and unless otherwise expressly stated in writing, no party
who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability.  All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan or release
any party or guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any other action deemed
necessary by Lender without the consent of or notice to anyone.  All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made.  The
obligations under this Note are joint and several.

 

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE.

 

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

 

BORROWER:

 

HF FINANCIAL CORP.

 

By:

/s/ Darrel L. Posegate

 

By:

/s/ Curtis L. Hage

 

Darrel L. Posegate, EVP/CFO of HF Financial Corp.

 

 

Curtis L. Hage, Chairman/President/CEO of HF Financial Corp.

 

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