Exhibit 4.2


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


TCF FINANCIAL
CORPORATION


 


AND


 


Wilmington Trust
Company,


as Trustee


 


SUPPLEMENTAL
INDENTURE


 


Dated as of August 19,
2008


 


to


 


INDENTURE


 


Dated as of August 19,
2008


 


10.75% JUNIOR
SUBORDINATED DEBENTURES, SERIES I


 

















 


SUPPLEMENTAL
INDENTURE, dated as of August 19, 2008, between TCF FINANCIAL CORPORATION,
a Delaware corporation (the “Company”) having its principal office at 200 Lake
Street East, Wayzata, Minnesota 55391-1693, and Wilmington Trust Company, a
Delaware banking corporation, as Trustee (the “Trustee”).


 


WITNESSETH:


 


WHEREAS,
the Company and the Trustee have heretofore executed and delivered a certain
Indenture, dated as of August 19, 2008, (the “Indenture”), providing for
the issuance from time to time of Securities;


 


WHEREAS,
Section 9.01 of the Indenture provides that a supplemental indenture may
be entered into by the Company and the Trustee without the consent of any
Holder of any Securities to establish the form or terms of Securities of any
series as permitted by Sections 2.01 and 3.01 of the Indenture;


 


WHEREAS,
pursuant to Sections 2.01 and 3.01 of the Indenture, the Company desires
to provide for the establishment of a new series of Securities under the
Indenture, the form and substance of such Securities and the terms, provisions
and conditions thereof to be set forth as provided in the Indenture and this
Supplemental Indenture;


 


WHEREAS,
the conditions set forth in the Indenture for the execution and delivery of
this Supplemental Indenture have been satisfied; and


 


WHEREAS,
all things necessary to make this Supplemental Indenture a valid agreement of
the Company and the Trustee, in accordance with its terms, and a valid
amendment of, and supplement to, the Indenture have been done.


 


NOW,
THEREFORE, in consideration of the premises and the purchase of the Securities
of the series established by this Supplemental Indenture by the Holders thereof
from time to time on or after the date hereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all such Holders, that the
Indenture is supplemented and amended, to the extent and for the purposes
expressed herein, as follows:


 


ARTICLE I


 


DEFINITIONS


 


1.1           (a)           For all
purposes of this Supplemental Indenture, except as otherwise expressly provided
or unless the context otherwise requires, (i) references to any Article, Section or
subdivision thereof are references to an Article, Section or other
subdivision of this Supplemental Indenture and (ii) capitalized terms not
otherwise defined herein shall have the meanings set forth in the Indenture and
the following terms used in this Supplemental Indenture shall have the
following respective meanings:


 


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“Additional Interest” means the interest, if any, that shall
accrue on any interest on the Notes the payment of which has not been made on
the applicable Interest Payment Date and which shall accrue at the rate per
annum specified in Section 2.1(e) from the applicable Interest
Payment Date.


 


“Alternative
Payment Mechanism” means the alternative payment mechanism set forth in Section 2.1(i).


 


“APM
Commencement Date” means, with respect to any Deferral Period, the earlier
of (i) the first Interest Payment Date following the commencement of such
Deferral Period on which the Company pays any current interest on the Notes and
(ii) the fifth anniversary of the commencement of such Deferral Period.


 


“Bankruptcy
Event” means any of the events set forth in Section 7.01(i) or (ii) of
the Indenture.


 


  “Capital Securities” has the meaning
set forth in the Trust Agreement.


 


 “Common Equity Issuance Cap” has the meaning set forth in clause (1) of Section 2.1(i).


 


“Common
Stock” means any of the Company’s equity securities (including equity
securities held as treasury shares and equity securities sold pursuant to any
dividend reinvestment plan and employee benefit plans of the Company) that have
no preference in the payment of dividends or amounts payable upon the Company’s
liquidation, dissolution or winding up (including a security that tracks the
performance of, or relates to the results of, a business, unit or division of
the Company), and any securities issued in exchange therefor in connection with
a merger, consolidation, binding share exchange, business combination,
recapitalization or other similar event.


 


“Current
Stock Market Price” of the Common Stock on any date means (i) the
closing sale price per share (or if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and the average ask prices) on that date as reported
in composite transactions by the New York Stock Exchange or, if the Common
Stock is not then listed on the New York Stock Exchange, as reported by the
principal U.S. securities exchange on which the Common Stock is traded or
quoted, (ii) if the Common Stock is not listed on any U.S. securities
exchange on the relevant date, the last quoted bid price for the Common Stock
in the over-the-counter market on the relevant date as reported by the National
Quotation Bureau or similar organization, or (iii) if the Common Stock is
not so quoted, the average of the mid-point of the last bid and ask prices for
the Common Stock on the relevant date from each of at least three nationally
recognized independent investment banking firms selected by the Company for
this purpose.


 


“Deferral
Period” means each period beginning on an Interest Payment Date with
respect to which the Company elects pursuant to Section 2.1(g) to
defer all or part of any interest payment and ending, subject to Section 2.1(o),
on the earlier of (i) the tenth anniversary of such Interest Payment Date
and (ii) the next Interest Payment Date on which the Company has paid the
deferred amount, all deferred amounts with respect to any subsequent period and
all other accrued interest on the Notes.


 


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“Distributions”
means, with respect to the Capital Securities (as defined in the Trust
Agreement), amounts payable in respect of such Capital Securities as provided
in the Trust Agreement and referred to therein as “Distributions.”


 


“Distribution
Date” means a date on which Distributions are payable.


 


“Eligible
Proceeds” means, with respect to any Interest Payment Date, the net
proceeds (after underwriters’ or placement agents’ fees, commissions or
discounts and other expenses relating to the issuance or sale) the Company has
received during the 180-day period prior to such Interest Payment Date from the
issuance or sale of Qualifying APM Securities (excluding sales of Qualifying
Preferred Stock and Mandatorily Convertible Preferred Stock in excess of the
Preferred Stock Issuance Cap) to Persons that are not Subsidiaries.


 


“Existing
Parity Securities” has the meaning set forth in Section 2.1(g).


 


 “Federal Reserve” means the Board of
Governors of the Federal Reserve System collectively with any successor federal
bank regulatory agency having primary jurisdiction over the Company.


 


 “Guarantee” means the Company’s
guarantee of the Notes issued as described in Section 2.1(a).


 


“Intent-Based
Replacement Disclosure” means, as to any Qualifying Preferred Stock, that
the issuer has publicly stated its intention, either in the prospectus or other
offering document under which such securities were initially offered for sale
or in filings with the Securities and Exchange Commission made by the issuer
under the Securities Exchange Act of 1934, as amended,  prior to or contemporaneously with the issuance
of such securities, that the issuer and its subsidiaries will repay, redeem or
purchase such securities only with the proceeds of replacement capital
securities that have terms and provisions at the time of repayment, redemption
or purchase that are as or more equity-like than the securities then being
repaid, redeemed or repurchased, raised within 180 days prior to the applicable
repayment, redemption or repurchase date. 
Notwithstanding the use of the term “Intent-Based Replacement Disclosure”
in the definition of “Qualifying Preferred Stock”, the requirement in such
definition that a particular security or the related transaction documents
include Intent-Based Replacement Disclosure shall be disregarded and given no
force or effect for so long as the Company is a bank holding company within the
meaning of the Bank Holding Company Act of 1956, as amended.


 


“Interest
Payment Date” has the meaning set forth in Section 2.1(e).


 


“Interest
Period” means the period from and including any Interest Payment Date (or,
in the case of the first Interest Payment Date, August 19, 2008) to but
excluding the next Interest Payment Date.


 


“Mandatorily
Convertible Preferred Stock” means preferred stock with (a) no
prepayment obligations of the liquidation preference on the part of the issuer
thereof, whether at the election of the holders or otherwise, and (b) a
requirement that the preferred stock converts into Common Stock within three
years from the date of its issuance at a conversion ratio within a range 


 


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established at the time of issuance of the preferred
stock, subject to customary anti-dilution adjustments.


 


“Market
Disruption Event” means the occurrence or existence of any of the following
events or sets of circumstances:


 


(a)           trading in securities generally (or
in the Common Stock or the Company’s preferred stock specifically) on the
New York Stock Exchange or any other national securities exchange or
over-the-counter market on which the Common Stock and/or the Company’s
preferred stock is then listed or traded shall have been suspended or its
settlement generally shall have been materially disrupted or minimum prices
shall have been established on any such exchange or market by the Commission,
the relevant exchange or market or by any other regulatory body or governmental
agency having jurisdiction, and the establishment of such minimum prices
materially disrupts or otherwise has a material adverse effect on trading in,
or the issuance and sale of, Common Stock or the Company’s preferred stock or
Qualifying APM Securities, as the case may be;


 


(b)           the Company would be required to
obtain the consent or approval of its stockholders or a regulatory body
(including, without limitation, any securities exchange) or governmental
authority to issue Qualifying APM Securities pursuant to Section 2.1(i) and
the Company fails to obtain such consent or approval notwithstanding its
commercially reasonable efforts to obtain such consent or approval (including,
without limitation, failing to obtain approval for such issuance if required
from the Federal Reserve after having given notice to the Federal Reserve as
required under Section 2.1(i));


 


(c)           a banking moratorium shall have been
declared by the federal or state authorities of the United States and such
moratorium materially disrupts or otherwise has a material adverse effect on
trading in, or the issuance and sale of, Common Stock or the Company’s
preferred stock or Qualifying APM Securities, as the case may be;


 


(d)           a material disruption shall have
occurred in commercial banking or securities settlement or clearance services
in the United States and such disruption materially disrupts or otherwise has a
material adverse effect on trading in, or the issuance and sale of, Common
Stock or the Company’s preferred stock or Qualifying APM Securities, as the
case may be;


 


(e)           the United States shall have become
engaged in hostilities, there shall have been an escalation in hostilities
involving the United States, there shall have been a declaration of a national
emergency or war by the United States or there shall have occurred any other
national or international calamity or crisis and such event materially disrupts
or otherwise has a material adverse effect on trading in, or the issuance and
sale of, Common Stock or the Company’s preferred stock or Qualifying APM
Securities, as the case may be;


 


(f)            there shall have occurred such a
material adverse change in general domestic or international economic,
political or financial conditions, including as a result of terrorist activities,
and such change materially disrupts or otherwise has a material adverse effect
on trading in, or the issuance and sale of, Common Stock or the Company’s
preferred securities or Qualifying APM Securities, as the case may be;


 


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(g)           an event occurs and is continuing as
a result of which the offering document for the offer and sale of Qualifying
APM Securities would, in the Company’s reasonable judgment, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated in such offering document or necessary to make the statements in such
offering document not misleading and either (i) the disclosure of such
event at such time, in the Company’s reasonable judgment, is not otherwise
required by law and would have a material adverse effect on its business or (ii) the
disclosure relates to a previously undisclosed proposed or pending development
or material business transaction, and the Company has a bona fide
business reason for keeping the same confidential or the disclosure of which
would impede the Company’s ability to consummate such transaction; provided that no single suspension period described in this
clause (g) shall exceed 90 consecutive days and multiple suspension
periods described in this clause (g) shall not exceed an aggregate of 180
days in any 360-day period; or


 


(h)           the Company reasonably believes that
the offering document for the offer and the sale of Qualifying APM Securities
would not be in compliance with a rule or regulation of the Commission
(for reasons other than those referred to in clause (g)) and the Company
determines that it is unable to comply with such rule or regulation or
such compliance is unduly burdensome, provided that no single suspension period
described in this clause (h) shall exceed 90 consecutive days and multiple
suspension periods described in this clause (h) shall not exceed an
aggregate of 180 days in any 360-day period.


 


“Maturity
Date” has the meaning set forth in Section 2.1(d).


 


“Notes”
has the meaning set forth in Section 2.1(a).


 


“Parity
Securities” means any debt securities that the Company may issue in the
future that rank pari passu upon the Company’s
liquidation with the Notes.


 


“Permitted
Remedies” means, with respect to any securities, one or more of the
following remedies:


 


(a)           rights in favor of
the holders of such securities permitting such holders to elect one or more
directors of the issuer (including any such rights required by the listing
requirements of any stock or securities exchange on which such securities may
be listed or traded); and


 


(b)           complete or partial
prohibitions on the issuer paying distributions on and on the issuer and its
subsidiaries purchasing Common Stock or other securities that rank pari  passu with or
junior as to distributions to such securities for so long as distributions on
such securities, including unpaid distributions, remain unpaid.


 


“Preferred
Stock Issuance Cap” has the meaning set forth in clause (2) of Section 2.1(i).


 


“Qualifying
APM Securities” means Common Stock, Qualifying Preferred Stock, Qualifying Warrants and
Mandatorily Convertible Preferred Stock, provided that the Company may, without
the consent of the Holders of the Notes, amend the definition of “Qualifying
APM Securities” to eliminate Common Stock or Qualifying Warrants (but not both)
and/or Mandatorily Convertible Preferred Stock from the definition if, after
the issue date, an 


 


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accounting
standard or interpretive guidance of an existing accounting standard issued by
an organization or regulator that has responsibility for establishing or
interpreting accounting standards in the United States becomes effective such
that there is more than an insubstantial risk that failure to eliminate Common
Stock and/or Mandatorily Convertible Preferred Stock from the definition would
result in a reduction in the earnings per share of the Company as calculated
for financial reporting purposes.


 


“Qualifying
Preferred Stock”  means non-cumulative
perpetual preferred stock of the Company that (i) ranks pari passu with or junior to all other outstanding preferred
stock of the Company, (ii) as to which the transaction documents provide
for no remedies as a consequence of non-payment of dividends other than
Permitted Remedies and (iii) either (a) is subject to a Qualifying
Replacement Capital Covenant or (b) is subject to both (x) a
provision that prohibits the Company from paying any dividends thereon upon its
failure to satisfy one or more financial tests set forth therein and (y) Intent-Based
Replacement Disclosure.


 


“Qualifying
Replacement Capital Covenant” means a replacement capital covenant, as
identified by the Company’s Board of Directors acting in good faith and in its
reasonable discretion, (i) entered into by an issuer that at the time it
enters into such replacement capital covenant is a reporting company under the
Securities Exchange Act of 1934, as amended, and (ii) that restricts the
issuer and its subsidiaries from redeeming, repaying or purchasing identified
securities except to the extent of a specified percentage of the net proceeds
from the issuance of specified replacement capital securities that have terms
and provisions at the time of redemption, repayment or purchase that are as or
more equity-like than the securities then being redeemed, repaid or purchased
within the 180-day period prior to the applicable redemption, repayment or
purchase date.


 


“Qualifying
Warrants” means any net share settled warrants to purchase Common Stock
that (i) have an exercise price per share greater than the Current Stock
Market Price as of the date the Company agrees to issue the warrants and (ii) the
Company is not entitled to redeem for cash and the holders of which are not
entitled to require the Company to repurchase for cash in any circumstances.


 


“Rating
Agency” means any nationally recognized statistical rating organization
within the meaning of Section 3(a)(62) under the Securities Exchange Act
of 1934 that currently publishes a rating for the Company.


 


“Share
Cap” has the meaning set forth in clause (5) of Section 2.1(i).


 


“Trust”
has the meaning set forth in Section 2.1(a).


 


“Trust
Agreement” has the meaning set forth in Section 2.1(a).


 


“Underwriters”
means the underwriters named in Schedule I to the Underwriting Agreement.


 


“Underwriting
Agreement” means the Underwriting Agreement dated August 13, 2008
among the Company, the Trust and RBC Capital Markets Corporation, as
representative of the Underwriters named therein.


 


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ARTICLE II


 


TERMS OF SERIES OF SECURITIES


 


2.1.          Pursuant to
Sections 2.01 and 3.01 of the Indenture, there is hereby established a
series of Securities, the terms of which shall be as follows:


 


(a)            Designation.
The Securities of this series shall be known and designated as the “10.75%
Junior Subordinated Notes, Series I” of the Company (the “Notes”). The Notes
initially shall be issued to TCF Capital I, a Delaware statutory trust (the “Trust”).  The Trust Agreement for the Trust shall be
the Amended and Restated Trust Agreement, dated as of August 19, 2008,
among the Company, as Depositor, Wilmington Trust Company, as Delaware Trustee,
Wilmington Trust Company, as Property Trustee, and the Administrative Trustees
(as defined therein) named therein (the “Trust Agreement”). The Guarantee will
be issued pursuant to the Guarantee Agreement, dated as of August 19, 2008,
between the Company and Wilmington Trust Company, as Guarantee Trustee.


 


(b)           Aggregate
Principal Amount.  The aggregate
principal amount of the Notes that may be authenticated and delivered under the
Indenture and this Supplemental Indenture is unlimited.  $100,000,000 aggregate principal amount of
the Notes are issued on the date of this Supplemental Indenture. The Company
has the right to issue up to $15,000,000 aggregate principal amount of Notes of
this series if the Underwriters exercise their over-allotment option to
purchase additional Notes as set forth in the Underwriting Agreement and/or
additional Notes of this series from time to time in the future. Any such
additional Notes shall have the same terms as the Notes issued on the date of
this Supplemental Indenture but may be offered at a different offering price
and accrue interest from a different date than the Notes issued on the date of
this Supplemental Indenture. Any such additional Notes will be treated as part
of the same series as the Notes issued on the date of this Supplemental
Indenture for all purposes under the Indenture.


 


(c)            Denominations.  The Notes shall be issued only in fully
registered form, and the authorized denominations of the Notes shall be $25 principal
amount and any integral multiple thereof.


 


(d)           Maturity
Date.  The principal amount of, and all
accrued and unpaid interest on, the Notes shall be payable in full on August 15,
2068, or if such day is not a Business Day, the following Business Day (the “Maturity
Date”).


 


(e)            Rate
of Interest.  The Notes shall bear
interest on their principal amount from and including the date they are issued
to but excluding the Maturity Date or the date of earlier redemption at the
annual rate of 10.75%, payable quarterly in arrears on February 15, May 15,
August 15, and November 15 of each year (each such date an “Interest
Payment Date”). In the event that any Interest Payment Date would otherwise
fall on a day that is not a Business Day, the payment of interest shall be
postponed to the next day that is a Business Day and no interest shall accrue
as a result of that postponement.  Any
installment of interest (or portion thereof) deferred in accordance with Section 2.1(g) or
otherwise unpaid shall bear interest, to the extent 


 


8

















 


permitted by law, at the rate of interest then in
effect on the Notes, from the relevant Interest Payment Date, compounded on
each subsequent Interest Payment Date, until paid in accordance with Section 2.1(h).


 


(f)            To
Whom Interest Payable.  Subject to Section 2.1(o),
interest shall be payable to the Person in whose name the Notes are registered
at the close of business on the Regular Record Date next preceding the Interest
Payment Date, except that interest payable on the Maturity Date shall be
paid to the Person to whom principal is paid.


 


(g)           Option
to Defer Interest Payments.  (i) 
The Company shall have the right, at any time and from time to time prior to
the Maturity Date, to defer the payment of interest on the Notes for one or
more consecutive Interest Periods that do not exceed 10 years; provided that no Deferral Period shall extend beyond the
Maturity Date or the earlier repayment or redemption in full of the Notes.


 


If an
Event of Default has occurred and is continuing or the Company has given notice
of its election to defer interest payments but the Deferral Period has not yet
commenced or a Deferral Period is continuing or the Company is in default
regarding its payment of any obligation under the Guarantee, the Company shall
not, and shall not permit any Subsidiary, to: 
(A) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Company’s capital stock, (B) make any payment of principal of, or interest
or premium, if any, on, nor repay, purchase or redeem any Parity Securities or
other debt securities of the Company that rank on a parity with or junior upon
the liquidation of the Company to the Notes, or (C) make any guarantee
payments with respect to any guarantee by the Company if such guarantee ranks
junior to the Notes. Notwithstanding the foregoing, at any time, including
during a Deferral Period, the Company may: (a) make dividends or
distributions payable in its capital stock or rights to acquire its capital
stock and any cash payments in lieu of fractional shares issued in connection
therewith; (b) make payments under the Guarantee; (c) make any
declaration of a dividend in connection with the implementation of a
shareholders’ rights plan, or redeem or purchase any rights under any such
plan; (d) purchase Common Stock related to (1) the issuance of Common
Stock or rights under any employment contract, benefit plan or other similar
arrangement with or for the benefit of the directors, officers, employees or
consultants of the Company; (2) the issuance of Common Stock or rights under
a dividend reinvestment and stock purchase plan; (3) the issuance of
Common Stock, or securities convertible into or exercisable for Common Stock,
as consideration in an acquisition transaction that was entered into before the
beginning of the Deferral Period; (4) secondary market activities by the
Company’s subsidiaries for the account of persons other than the Company or its
subsidiaries; (5) contractually binding arrangements to buy the Company’s
capital stock entered into in the ordinary course of business prior to the
beginning of the related deferral period, including under a contractually
binding stock repurchase plan; (e) exchange or convert (1) any class
or series of the Company’s capital stock for any other class or series of its
capital stock or (2) any class or series of the Company’s indebtedness for
any class or series of its capital stock; (f) purchase fractional
interests in shares of the Company’s capital stock pursuant to conversion or
exchange provisions of such capital stock or the security being converted or
exchanged; or (g) make payments of current or deferred interest in respect
of Parity Securities that are made pro rata in
respect of the amounts due on such Parity Securities and the Notes or in
accordance with clause (4) of Section 2.1(i) to the extent it
applies, and make 


 


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payments of deferred interest on any Parity Securities
that were issued prior to the date the Notes are initially issued (“Existing
Parity Securities”) that, if not made, would cause the Company to breach the
terms of the instrument governing such Existing Parity Securities.


 


(ii)           Except as otherwise provided in Section 2.1(o),
at the end of any Deferral Period, the Company shall pay all deferred interest
on the Notes (together with Additional Interest thereon, if any, at the rate
specified for the Notes) to the extent permitted by applicable law, to the
Persons in whose names the Securities are registered at the close of business
on the Regular Record Date with respect to the Interest Payment Date at the end
of such Deferral Period.


 


(iii)          Subject
to Section 2.1(o) and the exceptions set forth in clause (i) above,
in the case of any Deferral Period that does not terminate on or prior to the
first anniversary of the commencement of such Deferral Period, the Company
shall not, nor shall permit any of its Subsidiaries to, prior to the first
anniversary of the date on which all deferred interest has been paid, purchase
or acquire any securities ranking junior to or pari passu with
any Qualifying APM Securities the proceeds of which were used to pay deferred
interest pursuant to the Alternative Payment Mechanism during the relevant
Deferral Period.


 


(iv)          Upon
termination of any Deferral Period and upon the payment of all deferred
interest and any Additional Interest then due on any Interest Payment Date, the
Company may elect to begin a new Deferral Period pursuant to clause (i) of
this Section 2.1(g).


 


(v)           The
Company may elect to pay interest on any Interest Payment Date during any
Deferral Period to the extent permitted by Section 2.1(h).


 


(vi)          The
Company shall give written notice of its election to begin or extend any
Deferral Period (i) if the Property Trustee is not the sole holder or a
holder of the Notes, to the Holders of the Notes and the Trustee at least one
Business Day prior to the next succeeding Interest Payment Date or (ii) if
the Property Trustee is the sole holder of the Notes, to the Property Trustee
and the Trustee at least one Business Day prior to the earlier of (a) the
next Distribution Date or (b) the date the Administrative Trustees are
required to give notice to any securities exchange or other applicable
self-regulatory organization or to holders of the Capital Securities of the
record date for such Distribution Date or of such Distribution Date.


 


(h)           Payment
of Deferred Interest.  The Company
shall not pay deferred interest (including Additional Interest thereon) on the
Notes on any Interest Payment Date during any Deferral Period prior to the Maturity
Date from any source other than Eligible Proceeds.  Notwithstanding the foregoing, (i) the
Company may pay current interest during a Deferral Period from any available
funds; (ii) the Company may pay deferred interest from any available funds
at any time an Event of Default has occurred and is continuing and (iii) if
the Federal Reserve disapproves of the Company’s sale of Qualifying APM
Securities, the Company may pay deferred interest on the Notes with cash from
any source and if the Federal Reserve disapproves of the use of proceeds of the
Company’s sale of Qualifying APM Securities to pay deferred interest on the
Notes, the Company may use the proceeds for other purposes and continue to
defer interest on the Notes. If the Company has outstanding Parity Securities
under which it is obligated to sell Qualifying APM Securities and apply the net
proceeds to the payment of deferred interest or distributions, then on any date
and for any period the amount of 


 


10

















 


net proceeds received by the Company from those sales
and available for payment of the deferred interest and distributions will be
applied to the Notes and those other Parity Securities on a pro rata basis up to the Common Equity Issuance Cap, the Preferred
Stock Issuance Cap and the Share Cap (or comparable provisions in the
instruments governing those Parity Securities) for each series of Parity
Securities, as the case may be, in proportion to the total amounts of accrued
and unpaid interest or distributions that are due on the Notes and such Parity
Securities at such time, or on such other basis as the Federal Reserve may
approve.


 


(i)             Alternative
Payment Mechanism.  Immediately
following any APM Commencement Date and until the termination of the related
Deferral Period, the Company shall, after notice to the Federal Reserve and
except to the extent that the Federal Reserve shall have disapproved, issue
Qualifying APM Securities until the Company has raised an amount of Eligible
Proceeds at least equal to the aggregate and unpaid amount of deferred interest
on the Notes (including Additional Interest thereon) and applied such Eligible
Proceeds on the next Interest Payment Date to the payment of deferred interest
(including Additional Interest thereon) in accordance with Section 2.1(h);
provided that:


 


(1)           the Company shall not be required to issue
Common Stock or Qualifying Warrants prior to the fifth anniversary of the
commencement of a Deferral Period if the net proceeds of any issuance of Common
Stock or Qualifying Warrants applied during that Deferral Period to pay
interest on the Notes pursuant to this Section 2.1(i), together with the
net proceeds of all prior issuances of Common Stock and
Qualifying Warrants applied during that Deferral Period would exceed an amount
equal to 2% of the product of the average of the Current Stock Market Prices of
the Common Stock on the 10 consecutive trading days ending on the second
trading day immediately preceding the date of issuance multiplied by the total
number of issued and outstanding shares of Common Stock as of the date of the
Company’s then most recent publicly available consolidated financial statements
(the “Common Equity Issuance Cap”); provided that
the Common Equity Issuance Cap will cease to apply after the fifth anniversary
of the commencement of any Deferral Period, at which point the Company must pay
any deferred interest, to the extent not disapproved by the Federal Reserve
after notice, regardless of the time at which it was deferred, using the
Alternative Payment Mechanism, subject to any Market Disruption Event and the
Share Cap; and provided, further,
that if the Common Equity Issuance Cap is reached during a Deferral Period and
the Company subsequently pays all deferred interest, the Common Equity Issuance
Cap will cease to apply at the termination of that Deferral Period and will not
apply again unless and until the Company starts a new Deferral Period. The
Company shall use commercially reasonable efforts, subject to the Share Cap (as
defined in clause (5)) below, to set the terms of any Qualifying Warrants so as
to raise sufficient proceeds from their issuance to pay all deferred interest
in accordance with the Alternative Payment Mechanism. For the avoidance of doubt, once the Company reaches the Common Equity
Issuance Cap, the Company shall not be required to issue more Common Stock or
Qualifying Warrants with respect to deferred interest attributable to the first
five years of any Deferral Period (including any Additional Interest thereon)
pursuant to this Section 2.1(i) even if the amount referred to
in clause (1) of this Section 2.1(i)  subsequently increases
because of a subsequent increase in the Current Stock Market Price of Common
Stock or in the number of outstanding shares of Common Stock;


 


11

















 


(2)           the
Company shall not be permitted to issue Qualifying Preferred Stock and
Mandatorily Convertible Preferred Stock if the net proceeds of any issuance of
Qualifying Preferred Stock or Mandatorily Convertible Preferred Stock applied
to pay interest on the Notes pursuant to the Alternative Payment Mechanism,
together with the net proceeds of all prior issuances of Qualifying Preferred
Stock and still-outstanding Mandatorily Convertible Preferred Stock so applied
during the current and all prior Deferral Periods, would exceed 25% of the
aggregate principal amount of the Notes issued under the Indenture (the “Preferred
Stock Issuance Cap”);


 


(3)           the foregoing obligations shall not
apply in respect of any Interest Payment Date if the Company shall have
provided to the Trustee (and to the Property Trustee of the Trust to the extent
it is the Holder of the Notes) no more than 15 and no less than
10 Business Days prior to such Interest Payment Date an Officers’
Certificate stating that (i) a Market Disruption Event was existing after
the immediately preceding Interest Payment Date and (ii) either (A) the
Market Disruption Event continued for the entire period from the Business Day
immediately following the preceding Interest Payment Date to the Business Day
immediately preceding the date on which such Officers’ Certificate is provided
or (B) the Market Disruption Event continued for only part of such period
but the Company was unable to raise sufficient Eligible Proceeds during the
rest of that period to pay all accrued and unpaid interest due on the Interest
Payment Date with respect to which such Officers’ Certificate is being
delivered;


 


(4)           to the extent that the Company has
raised some but not all Eligible Proceeds necessary to pay all deferred
interest (including Additional Interest thereon) on any Interest Payment Date
pursuant to this Section 2.1(i) and subject to the Common Equity
Issuance Cap, the Preferred Stock Issuance Cap and the Share Cap, such Eligible
Proceeds shall be applied in accordance with Section 2.1(h); and


 


(5)           so long as the Notes remain
outstanding, the Company shall not issue Common Stock, Qualifying Warrants or
Mandatorily Convertible Preferred Stock such that the Common Stock to be issued
(or which would be issuable upon exercise or conversion thereof), together with
all Common Stock previously issued, or issuable under Qualifying Warrants and
Mandatorily Convertible Preferred Stock previously issued, pursuant to the
Alternative Payment Mechanism for purposes of paying deferred interest on the
Notes, exceeds 66 million shares of Common Stock (the “Share Cap”); provided
that (i) if additional Capital Securities are issued, the Share Cap will
be increased proportionately to the number of such additional Capital
Securities, (ii) if the definition of Qualifying APM Securities has been
amended to eliminate Common Stock, the effective Share Cap shall be increased
by 100%, and (iii) if the issued and outstanding shares of Common Stock
are changed into a different number of shares or a different class by reason of
any stock split, reverse stock split, stock dividend, reclassification,
recapitalization, split-up, combination, exchange of shares or other similar
transaction, the Share Cap shall be correspondingly adjusted. The Share Cap
limitation shall apply so long as any Notes remain outstanding, but if the
Share Cap has been reached and it is not sufficient to allow the Company to
raise sufficient proceeds to pay deferred interest in full, the Company shall
use commercially reasonable efforts to increase the Share Cap amount (i) only
to the extent that it can do so and simultaneously satisfy its future fixed 


 


12

















 


or contingent obligations
under other securities and derivative instruments that provide for settlement
or payment in shares of its Common Stock or (ii) if the Company cannot
increase the Share Cap as contemplated in the preceding clause, by requesting
the Company’s board of directors to adopt a resolution for stockholder vote at
the next occurring annual stockholders’ meeting to increase the number of
shares of authorized Common Stock for purposes of satisfying the Company’s
obligations to pay deferred interest pursuant to the Alternative Payment
Mechanism.


 


(j)             Events
of Default.  In addition to
clauses (i) and (ii) of Section 7.01 of the Indenture, the
following clauses (1) and (2) shall constitute Events of
Default; the reference to Section 7.01 in Section 7.07 of the
Indenture shall be deemed to refer to clauses (1) and (2) below:


 


(1)           default in the payment of any
interest, including Additional Interest, in full on the Note for a period of
30 days after the conclusion of a ten-year period following the
commencement of any Deferral Period if at such time such Deferral Period has
not ended;


 


(2)           default in the payment of the
principal of the Notes when due whether on the Maturity Date, upon redemption
or otherwise.


 


For
the avoidance of doubt, and without prejudice to any other remedies that may be
available to the Trustee, the Holders of the Notes or the holders of the
Capital Securities under the Indenture, no breach by the Company of any other
covenant or obligation under the Indenture or the terms of the Notes shall be
an Event of Default with respect to the Notes.


 


If an
Event of Default pursuant to this Section 2.1 (j)(1) occurs and is
continuing, then, and in every such case, the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Outstanding Notes may
declare the principal amount of and interest on the Notes to be immediately due
and payable or deliverable, by a notice in writing to the Company (and to the
Trustee if given by Securityholders); provided that,
if, upon an Event of Default, the Trustee or the Holders of not less than 25%
in principal amount of the Outstanding Notes fail to declare the principal
amount of and interest on all the Notes to be immediately due and payable, the
holders of at least 25% in aggregate liquidation amount of the corresponding
series of Preferred Securities then outstanding shall have such right by a
notice in writing to the Company and the Trustee, and upon any such declaration
the same shall become immediately due and payable or deliverable.


 


At any
time after such a declaration of acceleration with respect to the Notes has
been made and before a judgment or decree for payment of the money or other
property due or deliverable has been obtained by the Trustee as provided in Article VII
of the Indenture, the Holders of a majority in principal amount of the
Outstanding Notes, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:


 


(i) the
Company has paid or deposited with, or delivered to, the Trustee a sum or other
property sufficient to pay


 


(a) all
overdue installments of interest on all Notes,


 


13

















 


(b) the
principal of (and premium, if any), of any Notes which have become due
otherwise than by such declaration of acceleration and interest thereon at the
rate or rates prescribed therefor by the terms of the Notes,


 


(c) to the
extent that payment of such interest is lawful, interest upon overdue
installments of interest at the rate or rates prescribed therefor by the terms
of the Notes, and


 


(d) all sums
paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, the Security Registrar,
Co-Security Registrar, any Paying Agent, and their agents and counsel; and


 


(ii) all
other Defaults with respect to the Notes, other than the non-payment of the
principal of the Notes which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 7.13 of the
Indenture.


 


provided that, if the Holders of
at least a majority in principal amount of the Outstanding Notes fails to
rescind and annul such declaration and its consequences, the holders of a
majority in aggregate Liquidation Amount (as defined in the Trust Agreement) of
the related series of Preferred Securities then outstanding shall have such
right by written notice to the Company and the Trustee, subject to the
satisfaction of the conditions set forth in clauses (i) and (ii) above
of this Section 2.1(j).


 


No such rescission shall
affect any subsequent default or impair any right consequent thereon.


 


(k)            Redemption.  Solely for the purposes of the Notes, Article IV
of the Indenture shall be amended and supplemented to include the following:


 


“SECTION 4.08.    Right
of Redemption of Securities Initially Issued to a Trust.  The Notes (i) are redeemable at the
Company’s option, subject to the approval of the Federal Reserve, in whole or
in part, at any time on or after August 15, 2013 at a redemption price
equal to 100% of their principal amount plus accrued and unpaid interest to the
Redemption Date; (ii) are redeemable at the Company’s option, subject to
the approval of the Federal Reserve, in whole but not in part, any time prior
to August 15, 2013 at a redemption price equal to 100% of their principal
amount plus accrued and unpaid interest to the Redemption Date, within 90 days
after the occurrence of a Capital Treatment Event or a Tax Event; (iii) are
redeemable at the Company’s option, subject to the approval of the Federal
Reserve, in whole but not in part, any time prior to August 15, 2013,
within 90 days after the occurrence of a Rating Agency Event at a redemption
price equal to the greater of (x) 100% of the principal amount of the
Notes being redeemed and (y) the Make-Whole Amount, in each case plus any
accrued and unpaid interest to the Redemption Date; and (iv) are not
subject to any sinking fund or similar provision.


 


For purposes of this Section 4.08,
the following terms have the following meanings:


 


14

















 


“Capital Treatment Event”
means the reasonable determination by the Company that, as a result of any:


 


(i) amendment
to, or change in, the laws or regulations of the United States or any political
subdivision of or in the United States that is enacted or becomes effective
after the issuance of the Notes;


 


(ii) proposed
change in those laws or regulations that is announced after the issuance of the
Notes; or


 


(iii) official
administrative decision or judicial decision or administrative action or other
official pronouncement interpreting or applying those laws or regulations that
is announced after the issuance of the Notes;


 


there is more than an
insubstantial risk that the Company will not be entitled to treat an amount
equal to the liquidation amount of the capital securities as “Tier 1 capital”
(or its equivalent) for purposes of the capital adequacy guidelines of the
Federal Reserve applicable to bank holding companies, as then in effect.


 


“Tax Event” means that
the Company has requested and received an opinion of counsel experienced in
such matters to the effect that, as a result of any:


 


(i) amendment
to or change in the laws or regulations of the United States or any political
subdivision or taxing authority of or in the United States that is enacted or
issued or becomes effective after the issuance of the Notes;


 


(ii) proposed
change in those laws or regulations that is announced after the issuance of the
Notes;


 


(iii) official
administrative decision or judicial decision or administrative action or other
official pronouncement interpreting or applying those laws or regulations that
is announced after the issuance of the Notes; or


 


(iv) threatened
challenge asserted in writing in connection with an audit of the Company, its
subsidiaries or the Trust, or a threatened challenge asserted in writing
against any other taxpayer that has raised capital through the issuance of
securities that are substantially similar to the Notes or the Capital
Securities;


 


there is more than an
insubstantial risk that:


 


(i) the Trust
is, or will be, subject to United States federal income tax with respect to
income received or accrued on the Notes;


 


(ii) interest
payable by the Company on the Notes is not, or will not be, deductible by the
Company, in whole or in part, for United States federal income tax purposes; or


 


(iii) the
Trust is, or will be, subject to more than a de minimis amount of other taxes,
duties or other governmental charges.


 


15
















 


“Rating Agency Event”
means that any Rating Agency amends, clarifies or changes the criteria it uses
to assign equity credit to securities such as the Notes, which amendment,
clarification or change results in:


 


(i) the
shortening of the length of time the Notes are assigned a particular level of
equity credit by that Rating Agency as compared to the length of time they
would have been assigned that level of equity credit by that rating agency or
its predecessor on the issue date of the Capital Securities, or


 


(ii) the
lowering of the equity credit (including up to a lesser amount) assigned to the
Notes by that Rating Agency as compared to the equity credit assigned by that
Rating Agency or its predecessor on the issue date of the Capital Securities.


 


“Make-Whole Amount”
equals the sum of the present values of the remaining scheduled payments of
principal (discounted from August 15, 2013) and interest that would have
been payable to and including August 15, 2013 (discounted from their
respective interest payment dates) on the Notes being redeemed (not including
any portion of such payments of interest accrued to the Redemption Date) to the
Redemption Date on a quarterly basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 0.50%.


 


“Treasury Rate” means the
semi-annual equivalent yield to maturity of the “Treasury Security” that
corresponds to the “Treasury Price” (calculated in accordance with standard
market practice and computed as of the second trading day preceding the
Redemption Date).


 


“Treasury Security” means
the United States Treasury security that the “Treasury Dealer” determines would
be appropriate to use, at the time of determination and in accordance with
standard market practice, in pricing the Notes being redeemed in a tender offer
based on a spread to United States Treasury yields.


 


“Treasury Price” means
the bid-side price for the Treasury Security as of the third trading day
preceding the Redemption Date, as set forth in the daily statistical release
(or any successor release) published by the Wall Street Journal in the table
entitled “Treasury Bonds, Notes, and Bills,” as determined by the Treasury
Dealer, except that: (i) if that release (or any successor release) is not
published or does not contain that price information on that trading day; or (ii) if
the Treasury Dealer determines that the price information is not reasonably
reflective of the actual bid-side price of the Treasury Security prevailing at
3:30 P.M., New York City time, on that trading day, then Treasury Price
will instead mean the bid-side price for the Treasury Security at or around
3:30 P.M., New York City time, on that trading day (expressed on a next
trading day settlement basis) as determined by the Treasury Dealer through such
alternative means as the Treasury Dealer considers to be appropriate under the
circumstances.


 


“Treasury Dealer” means
RBC Capital Markets Corporation (or its successor) or, if RBC Capital Markets
Corporation  (or its successor) refuses
to act as Treasury Dealer for this purpose or ceases to be a primary U.S.
Government securities dealer, another nationally 


 


16

















 


recognized investment
banking firm that is a primary U.S. Government securities dealer specified by
the Company for these purposes.”


 


(l)             Limitation
on Claims in the Event of Bankruptcy, Insolvency or Receivership.  Each Holder, by such Holder’s acceptance of
the Notes, agrees that if a Bankruptcy Event shall occur prior to the
redemption or repayment of such Notes, such Holder shall have no claim for, and
thus no right to receive, any interest optionally deferred pursuant to Section 2.1(g) and
unpaid (including Additional Interest thereon) that has not been settled
through the application of the Alternative Payment Mechanism to the extent the
amount of such interest exceeds the sum of (x) interest that relates to
the earliest two years of the portion of the Deferral Period for which interest
has not been paid and (y) an amount equal to the pro rata share
of the excess, if any, of the Preferred Stock Issuance Cap over the aggregate
amount of net proceeds from the sale of Qualifying Preferred Stock and any
still-outstanding Mandatorily Convertible Preferred Stock that the Company has
applied to pay such deferred interest on the Notes pursuant to the Alternative
Payment Mechanism; provided that
each Holder of Notes is deemed to agree that, to the extent the claim for
deferred interest exceeds the amount set forth in clause (x), the amount the
Holders of the Notes will receive in respect of such excess shall not exceed
the amount they would have received had the claim for such excess ranked pari passu with the interest of the holders, if any, of
Qualifying Preferred Stock.


 


(m)           Sinking
Fund.  The Notes shall not be subject
to any sinking fund or similar provisions.


 


(n)           Forms.  The Notes shall be substantially in the form
of Annex A attached hereto, with such modifications thereto as may be
approved by the authorized officer executing the same.


 


(o)           Business
Combinations.  If the Company engages
in any transaction that is subject to Section 10.01 of the Indenture,
where immediately after the consummation of such transaction more than 50% of
the voting stock of the Person formed by such transaction, or the Person that
is the surviving entity of such transaction, or the Person to whom such
properties and assets are conveyed, transferred or leased in such transaction,
is owned by the shareholders of the other party to such transaction, then Section 2.1(h) and
clause (iii) of Section 2.1(g), shall not apply to any Deferral
Period that is terminated on the next Interest Payment Date following the date
of consummation of such transaction (or, if later, at any time within 90 days
following the date of consummation of the business combination). The settlement
of all deferred interest, whether it occurs on an Interest Payment Date or
another date, shall immediately terminate the Deferral Period. The Company
shall establish a special record date for the payment of any deferred interest
pursuant to this Section 2.1(o) on a date other than an Interest
Payment Date, which record date shall also be a special record date for the
payment of the corresponding Distribution on the Capital Securities.


 


(p)           Unconditional
Right of Holders to Receive Principal, Premium and Interest; Direct Action by
Holders of Capital Securities. 
Solely for the purposes of the Notes, Section 7.08 of the Indenture
shall not apply.  Notwithstanding any
other provision in the Indenture, each Holder of the Notes shall have the
right, which is absolute and unconditional, to receive payment of the principal
of (and premium, if any) and (subject to Section 3.07 of the Indenture)
interest 


 


17

















 


(including any Additional Interest) on the Notes on
the Maturity Date, and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Holder. So long as any Notes are held by or on behalf of the Trust, any holder
of the Capital Securities issued by the Trust shall have the right, upon (i) the
breach by the Company of its obligations under Section 2.1(i) to
issue Qualifying APM Securities or (ii) the occurrence of an Event of
Default described in Section 2.1(j), to institute a suit directly against
the Company (a) in the case of (i) above, to enforce such obligations
or for such other remedies as may be available and (b) in the case of (ii) above,
for enforcement of payment to such Holder of principal of (premium, if any) and
(subject to Section 3.07 of the Indenture) interest (including any
Additional Interest) on the Notes having a principal amount equal to the
aggregate liquidation amount of such Capital Securities.


 


(q)           Right
of Set-Off.  With respect to the Notes of a series issued
to the Trust, notwithstanding anything to the contrary in the Indenture, the
Company shall have the right to set-off any payment it is otherwise required to
make thereunder in respect of any such Note to the extent the Company has theretofore
made, or is concurrently on the date of such payment making, a payment under
any guarantee relating to such Note or under Section 7.08 of the
Indenture.


 


ARTICLE III


 


MISCELLANEOUS


 


3.1.          If any
provision of this Supplemental Indenture limits, qualifies or conflicts with
the duties imposed by any of Sections 310 to 317, inclusive, of the Trust
Indenture Act of 1939 through operation of Section 318(c) thereof,
such imposed duties shall control.


 


3.2.          The Article headings herein are
for convenience only and shall not affect the construction hereof.


 


3.3.          All covenants and agreements in this
Supplemental Indenture by the Company shall bind its successors and assigns,
whether so expressed or not.


 


3.4.          In case any provision of this
Supplemental Indenture shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.


 


3.5.          Nothing in this Supplemental Indenture
is intended to or shall provide any rights to any parties other than those
expressly contemplated by this Supplemental Indenture.


 


3.6.          THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.


 


3.7.          The Trustee makes no representations
as to the validity or sufficiency of this Supplemental Indenture. The recitals
and statements herein are deemed to be those of the Company and not of the Trustee.


 


18

















 


3.8.          Notwithstanding anything to the contrary
contained in this Supplemental Indenture, the consent of the Holders of the
Notes shall not be required to effect any amendment required in order to make
this Supplemental Indenture consistent with the description of the Supplemental
Indenture contained in the Prospectus, dated August 11, 2008, as
supplemented by the Prospectus Supplement, dated August 13, 2008, relating
to the Capital Securities.


 


[Signature page follows.]


 


19

















 


This instrument
may be executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together
constitute but one and the same instrument.


 


IN WITNESS
WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed, all as of the day and year first above written.


 


	
   

  	
  TCF FINANCIAL
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ James S. Broucek

  
	
   

  	
   

  	
    Name: James
  S. Broucek

  
	
   

  	
   

  	
    Title:
  Senior Vice President and

  
	
   

  	
   

  	
        Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST
  COMPANY,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/ Michael
  H. Wass

  
	
   

  	
   

  	
    Name:  Michael
  H. Wass

  
	
   

  	
   

  	
    Title:    Financial
  Services Officer

  



 

















 


Annex A – Form of Note


 


TCF FINANCIAL CORPORATION


 


10.75% Junior Subordinated Note, Series I


 


No. [·]


 


$[·]


 


TCF
FINANCIAL CORPORATION, a corporation organized and existing under the laws of
the State of Delaware (hereinafter called the “Company,” which term
includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to Wilmington Trust Company, as
Property Trustee of TCF Capital I, a statutory trust formed under the laws of
the State of Delaware, or registered assigns, the principal sum of [·]
($[·])
on August 15, 2068 (the “Maturity Date”).  If
the Maturity Date falls on a day that is not a Business Day (as hereinafter
defined), the Maturity Date shall be the following Business Day.  The Company further promises to pay
interest on said principal sum from [·]
or from the most recent Interest Payment Date for which interest has been paid
or duly provided for.  This Security
shall bear interest from and including [·]
to but excluding the Maturity Date or the date of earlier
redemption at the annual rate of 10.75%, payable quarterly in arrears on February 15,
May 15, August 15 and November 15 of each year, beginning on November 15,
2008 (each such date,
an “Interest Payment Date”).  In
the event that any Interest Payment Date would otherwise fall on a day that is
not a Business Day, the payment of interest shall be postponed to the next day
that is a Business Day and no interest shall accrue as a result of that
postponement.  Any installment of
interest (or portion thereof) deferred in accordance with the Supplemental
Indenture or otherwise unpaid on the relevant Interest Payment Date shall bear
interest, to the extent permitted by law, at the rate of interest then in
effect on this Security, from the relevant Interest Payment Date, compounded on
each subsequent Interest Payment Date, until paid in accordance with the
Supplemental Indenture.


 


The
amount of interest payable on this Security for any interest period will be
computed on the basis of a 360-day year of twelve 30-day months.


 


A “Business
Day” shall mean any day other than (i) a Saturday or Sunday or other
day on which banking institutions in the city of New York are authorized or
required by law or executive order to remain closed or (ii) a day on which
the Corporate Trust Office of the Debenture Trustee is closed for business.


 


The
interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the “Regular Record Date” for
such interest installment, which shall be (i) the Business Day next
preceding such Interest Payment Date if this Security is issued in the form of
a Global Security and the Capital Securities are issued in the form of a global
security, or (ii) the first day (whether or not a Business Day) of the
month in which such Interest Payment Date occurs if this Security 


 


A-1

















 


is not issued in the form of a Global Security and the
Capital Securities are not issued in the form of a global security, except that
interest payable on the Maturity Date shall be paid to the Person to whom
principal is paid.  Any such interest
installment not so punctually paid or duly provided for shall forthwith cease
to be payable to the Holder on such Regular Record Date and may either be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be mailed, first-class, postage prepaid, to each Holder of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange or automated quotation system on
which the Securities of this series may be listed or traded, and upon such
notice as may be required by such exchange or self-regulatory organization, all
as more fully provided in said Indenture.


 


The
Company shall have the right, at any time and from time to time prior to the
Maturity Date, to defer the payment of interest on this Security for one or
more consecutive Interest Periods that do not exceed 10 years; provided, however, that no Deferral Period (as hereinafter
defined) shall extend beyond the Maturity Date or the earlier repayment or
redemption in full of this Security.


 


If an
Event of Default has occurred and is continuing or the Company has given notice
of its election to defer interest payments but the Deferral Period has not yet
commenced or a Deferral Period is continuing or the Company is in default
regarding its payment of any obligation under the Guarantee (and, except as
provided in the Supplemental Indenture with respect to certain transactions, in
the case of any Deferral Period that does not terminate on or prior to the
first anniversary of the commencement of such Deferral Period), the Company
shall not, and shall not permit any Subsidiary to: (A) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company’s Capital Stock, (B) make
any payment of principal of, or interest or premium, if any, on, nor repay,
purchase or redeem any Parity Securities or other debt securities of the
Company that rank on parity with or junior upon the liquidation of the Company
to this Security, or (C) make any guarantee payments with respect to any
guarantee by the Company if such guarantee ranks junior to this Security.
Notwithstanding the foregoing, at any time, including during a Deferral Period,
the Company may: (a) make dividends or distributions payable in shares of
its Capital Stock or rights to acquire shares of its Capital Stock and any cash
payments in lieu of fractional shares issued in connection therewith; (b) make
payments under the Guarantee; (c) make any declaration of a dividend in
connection with the implementation of a shareholders’ rights plan, or redeem or
purchase any rights under any such plan; (d) purchase shares of its
Capital Stock related to (1) the issuance of Capital Stock or rights under
any benefit plans for directors, officers or employees of the Company; (2) the
issuance of Capital Stock or rights under a dividend reinvestment and stock
purchase plan; (3) the issuance of Capital Stock, or securities
convertible into or exercisable for Capital Stock, as consideration in an
acquisition transaction that was entered into before the beginning of the
Deferral Period; (4) secondary market activities by the Company’s
subsidiaries for the account of persons other than the Company or its
subsidiaries; (5) contractually binding requirements to buy the Company’s
Capital Stock entered into in the ordinary course of business prior to the
beginning of the related deferral period, including under a contractually
binding stock repurchase plan; (e) exchange or convert (1) any class
or series of the Company’s Capital Stock for any other class or series of its 


 


A-2

















 


Capital Stock or (2) any class or series of the
Company’s indebtedness for any class or series of its Capital Stock; (f) purchase
fractional interests in shares of the Company’s Capital Stock pursuant to
conversion or exchange provisions of such Capital Stock or the security being
converted or exchanged; or (g) make payments of current or deferred
interest in respect of Parity Securities that are made pro rata
in respect of the amounts due on such Parity Securities and this Security or in
accordance with clause (4) of Section 2.1(i) of the Supplemental
Indenture to the extent it applies.  Each
period beginning on the Interest Payment Date with respect to which the Company
elects to defer all or part of any interest payment and ending, subject to Section 2.1(o) of
the Supplemental Indenture, on the earlier of (i) the Interest Payment
Date falling on or about the tenth anniversary of such Interest Payment Date
and (ii) the next Interest Payment Date on which the Company has paid the
deferred amount, all deferred amounts with respect to any subsequent Deferral
Period and all other accrued and unpaid interest on this Security is referred
to as a “Deferral Period”.  At the end of
any such Deferral Period, the Company shall pay all interest then accrued and
unpaid on this Security (together with Additional Interest thereon, if any, to
the extent permitted by applicable law) to the Person in whose name this
Security is registered at the close of business on the Regular Record Date with
respect to the Interest Payment Date at the end of such Deferral Period.  Upon termination of any Deferral Period and
upon the payment of all deferred interest and any Additional Interest then due
on any Interest Payment Date, the Company may elect to begin a new Deferral
Period.  The Company may elect to pay
current interest on any Interest Payment Date during any Deferral Period to the
extent permitted, and shall pay deferred interest (including Additional
Interest thereon) pursuant to the Alternative Payment Mechanism to the extent
required, by the Supplemental Indenture.


 


The
Company shall give written notice of its election to begin or extend any
Deferral Period (i) if the Property Trustee is not the sole holder or a
holder of the Securities, to the Holders of the Securities and the Trustee at
least one Business Day prior to the next succeeding Interest Payment Date or (ii) if
the Property Trustee is the sole holder of the Securities, to the Property
Trustee and the Trustee at least one Business Day prior to the earlier of (a) the
next Distribution Date or (b) the date the Administrative Trustees are
required to give notice to any securities exchange or other applicable
self-regulatory organization or to holders of such Capital Securities of the
Record Date or the date such Distributions are payable, but in any event not
less than one Business Day prior to such record date.


 


Payment
of principal of (and premium, if any) and interest on this Security will be
made at the office or agency of the Company maintained for that purpose in the
United States, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts; provided, however, that
at the option of the Company payment of interest may be made (i) by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Securities Register or (ii) by wire transfer in immediately
available funds at such place and to such account as may be designated in
writing at least 15 days before the relevant Interest Payment Date by the
Person entitled thereto as specified in the Securities Register.


 


The
indebtedness evidenced by this Security is, to the extent provided in the
Indenture, subordinate and subject in right of payment to the prior payment in
full of all Senior Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto.  Each Holder of this Security, by accepting
the same, (a) agrees to and shall be bound by 


 


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such provisions, (b) authorizes and directs the
Trustee on his behalf to take such actions as may be necessary or appropriate
to effectuate the subordination so provided and (c) appoints the Trustee
his attorney-in-fact for any and all such purposes.  Each Holder hereof, by his acceptance hereof,
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.


 


Reference
is hereby made to the further provisions of this Security set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.


 


Unless
the certificate of authentication hereon has been executed by the Trustee
referred to on the reverse hereof by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.


 


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IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed
under its corporate seal.


 


 


	
   

  	
  TCF
  FINANCIAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
    Name: James
  S. Broucek

  
	
   

  	
   

  	
    Title:
  Senior Vice President and

  
	
   

  	
   

  	
        Treasurer

  



 


 


	
  Attest:

  
	
   

  
	
   

  
	
   

  



 


 


Dated:  August 19, 2008


 


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This is one of the
Securities referred to in the mentioned Indenture.


 


 


	
   

  	
  WILMINGTON
  TRUST COMPANY,

      as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title: 

  



 


 


Dated:


 


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REVERSE OF SECURITY


 


This
Security is one of a duly authorized issue of securities of the Company (herein
called the “Securities”), issued and to be issued in one or more series
under an Indenture, dated as of August 19, 2008, as supplemented by the
supplemental indenture thereto, dated as of August 19, 2008 (herein called
the “Indenture”, and such supplemental indenture dated as of August 19,
2008, herein called the “Supplemental Indenture”), between the Company
and Wilmington Trust Company, as Trustee (herein called the “Trustee,”
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Trustee, the Company and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be, authenticated
and delivered.  This Security is one of
the series designated on the face hereof, which series is unlimited in
aggregate principal amount.


 


All
terms used in this Security that are defined in the Supplemental Indenture, in
the Indenture or in the Amended and Restated Trust Agreement, dated as of August 19,
2008 (the “Trust Agreement”), for TCF Capital I, among TCF Financial
Corporation, as Depositor, and the Trustees named therein, shall have the
meanings assigned to them in the Supplemental Indenture, the Indenture or the
Trust Agreement, as the case may be.


 


The
Company may, at its option and subject to the terms and conditions of the
Supplemental Indenture and Article IV of the Indenture, redeem this
Security, subject to the approval of the Federal Reserve:


 


·      in
whole or in part at any time on or after August 15, 2013 at a redemption
price equal to 100% of the principal amount of this Security plus accrued and
unpaid interest to the Redemption Date;


 


·      in
whole but not in part, any time prior to August 15, 2013 at a redemption
price equal to 100% of the principal amount of the Securities being redeemed
plus accrued and unpaid interest to the Redemption Date, within 90 days after
the occurrence of a Capital Treatment Event or Tax Event; and


 


·      in
whole but not in part, any time prior to August 15, 2013, within 90 days
after the occurrence of a Rating Agency at a redemption price equal to the
greater of (x) 100% of the principal amount of the Securities being
redeemed and (y) the applicable Make-Whole Amount, in each case plus any
accrued and unpaid interest to the Redemption Date.


 


In the
event of redemption or repayment of this Security in part only, a new Security
or Securities of this series for the unredeemed portion hereof will be issued
in the name of the Holder hereof upon the cancellation hereof.


 


The
Indenture contains provisions for satisfaction and discharge of the entire
indebtedness of this Security upon compliance by the Company with certain
conditions set forth in the Indenture.


 


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The
Indenture permits, with certain exceptions as therein provided, the Company and
the Trustee at any time to enter into a supplemental indenture or indentures
for the purpose of modifying in any manner the rights and obligations of the
Company and of the Holders of the Securities, with the consent of the Holders
of not less than a majority in aggregate principal amount of the Outstanding
Securities of each series to be affected by such supplemental indenture.  The Indenture also contains provisions
permitting Holders of a majority in aggregate principal amount of the
securities of each series issued under the Indenture at the time Outstanding,
on behalf of the Holders of all securities of such series, to waive compliance
by the Company with certain provisions of the Indenture and any past defaults
in the performance of any of the covenants contained in the Indenture, or
established pursuant to the Indenture with respect to such series, and its
consequences, except a default in the payment of the principal of or premium,
if any, or interest on any of the securities of such series.  Any such consent or waiver by the registered
Holders of this Security (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange hereof or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security.


 


As provided in and
subject to the provisions of the Indenture, if an Event of Default arising from
a default in the payment of interest (including Additional Interest) in full
for a period of 30 days after the conclusion of a 10-year period following the
commencement of any Deferral Period with respect to the Securities at the time
Outstanding occurs and is continuing, then the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities may declare the
principal amount, and accrued interest (including Additional Interest), of all
the Securities of this series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), provided that if, upon such an Event of Default, the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities fail to declare the principal amount of all the Securities to be
immediately due and payable, the holders of at least 25% in aggregate
liquidation amount of the Capital Securities then outstanding shall have such
right by a notice in writing to the Company and the Trustee.  Upon any such declaration such principal
amount (or specified portion thereof) of and the accrued interest (including
any Additional Interest) on all the Securities shall become immediately due and
payable.  If an Event of Default arising
from a Bankruptcy Event or insolvency or reorganization involving the Company
occurs, the principal amount of and the accrued interest on the Securities will
automatically, and without any declaration or other action on the part of the
Trustee or any Holder, become immediately due and payable.  In any case, the payment of principal and
interest (including any Additional Interest) on such Securities shall remain
subordinated to the extent provided in Article XIV of the Indenture.


 


Each Holder, by such
Holder’s acceptance hereof, agrees that if a Bankruptcy Event shall occur prior
to the redemption or repayment of this Security, such Holder shall have no
claim for, and thus no right to receive, any interest optionally deferred
pursuant to the Supplemental Indenture and unpaid (including Additional
Interest thereon) that has not been settled through the application of the
Alternative Payment Mechanism set forth in the Supplemental Indenture to the
extent the amount of such interest exceeds the sum of (x) interest that
relates to the earliest two years of the portion of the Deferral Period for
which interest has not been paid and (y) an amount equal to the pro rata share of the excess, if any, of the Preferred Stock
Issuance Cap over the aggregate amount of net proceeds from the sale of
Qualifying Preferred Stock and any still-


 


A-8

















 


outstanding Mandatory
Convertible Preferred Stock that the Company has applied to pay such deferred
interest on the Securities of this series pursuant to the Alternative Payment
Mechanism; provided that the Holder of this
Security agree that, to the extent the claim for deferred interest exceeds the
amount set forth in clause (x), the amount the Holder of this Security will
receive in respect of such excess shall not exceed the amount such Holder would
have received had the claim for such excess ranked pari passu with
the interest of the holders, if any, of Qualifying Preferred Stock.


 


No reference herein to
the Indenture or the Supplemental Indenture and no provision of this Security
or of the Indenture or the Supplemental Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of (and premium, if any) and interest on this Security at the times,
places and rate, and in the coin or currency, herein prescribed.


 


As provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
this Security is registrable in the Securities Register, upon surrender of this
Security for registration of transfer at the office or agency of the Company
maintained under Section 5.02 of the Indenture duly endorsed by, or
accompanied by written instrument of transfer in form satisfactory to the
Company and the Securities Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities
of this series, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or
transferees.  No service charge shall be
made for any such registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.


 


Prior to due presentment
of this Security for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name this
Security is registered as the owner hereof for all purposes, whether or not
this Security be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.


 


The Securities of this
series are issuable only in registered form without coupons in denominations of
$25 and any integral multiple thereof. 
As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for like aggregate
principal amount of Securities of a different authorized denomination, as
requested by the Holder surrendering the same.


 


The Company and, by its
acceptance of this Security or a beneficial interest therein, the Holder of,
and any Person that acquires beneficial interest in, this Security agree that,
for United States federal, state and local tax purposes, it is intended that
this Security constitute indebtedness.


 


THE INDENTURE, THE
SUPPLEMENTAL INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.


 


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