**Exhibit 10.1**

 

 

GUARANTEE AGREEMENT

 

HF FINANCIAL CORP.

 

Dated as of September 25, 2003

 

 

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**TABLE OFCONTENTS**

 

 
| ARTICLE I                                           |                                                            |
|-----------------------------------------------------|-----------------------------------------------------------------|
|                                                |                                                            |   |
| DEFINITIONS AND  INTERPRETATION                     |                                                            |
|                                                |                                                            |   |
| SECTION 1.1                                         | Definitions  and Interpretation.                                |   |
|                                                |                                                            |   |
| ARTICLE II                                          |                                                            |
|                                                |                                                            |   |
| POWERS, DUTIES AND RIGHTS OF THE GUARANTEE  TRUSTEE |                                                            |
|                                                |                                                            |
| SECTION 2.1                                         | Powers and  Duties of the Guarantee Trustee.                    |   |
| SECTION 2.2                                         | Certain  Rights of the Guarantee Trustee.                       |   |
| SECTION 2.3                                         | Not  Responsible for Recitals or Issuance of Guarantee.         |   |
| SECTION 2.4                                         | Events of  Default; Waiver.                                     |   |
| SECTION 2.5                                         | Events of  Default; Notice.                                     |   |
|                                                |                                                            |   |
| ARTICLE III                                         |                                                            |
|                                                |                                                            |   |
| THE  GUARANTEE TRUSTEE                              |                                                            |
|                                                |                                                            |
| SECTION 3.1                                         | The Guarantee  Trustee; Eligibility.                            |   |
| SECTION 3.2                                         | Appointment,  Removal and Resignation of the Guarantee Trustee. |   |
|                                                |                                                            |   |
| ARTICLE IV                                          |                                                            |
|                                                |                                                            |   |
| GUARANTEE                                           |                                                            |
|                                                |                                                            |
| SECTION 4.1                                         | Guarantee.                                                      |   |
| SECTION 4.2                                         | Waiver of  Notice and Demand.                                   |   |
| SECTION 4.3                                         | Obligations  Not Affected.                                      |   |
| SECTION 4.4                                         | Rights of  Holders.                                             |   |
| SECTION 4.5                                         | Guarantee of  Payment.                                          |   |
| SECTION 4.6                                         | Subrogation.                                                    |   |
| SECTION 4.7                                         | Independent  Obligations.                                       |   |
| SECTION 4.8                                         | Enforcement.                                                    |   |
|                                                |                                                            |   |
| ARTICLE V                                           |                                                            |
|                                                |                                                            |   |
| LIMITATION OF TRANSACTIONS;  SUBORDINATION          |                                                            |
|                                                |                                                            |
| SECTION 5.1                                         | Limitation of  Transactions.                                    |   |
| SECTION 5.2                                         | Ranking.                                                        |   |

 

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| ARTICLE VI      |                                      |
|-----------------|-------------------------------------------|
|            |                                      |   |
| TERMINATION     |                                      |
|            |                                      |
| SECTION 6.1     | Termination.                              |   |
|            |                                      |   |
| ARTICLE VII     |                                      |
|            |                                      |
| INDEMNIFICATION |                                      |
|            |                                      |
| SECTION 7.1     | Exculpation.                              |   |
| SECTION 7.2     | Indemnification.                          |   |
| SECTION 7.3     | Compensation;  Reimbursement of Expenses. |   |
|            |                                      |   |
| ARTICLE VIII    |                                      |
|            |                                      |   |
| MISCELLANEOUS   |                                      |
|            |                                      |
| SECTION 8.1     | Successors  and Assigns.                  |   |
| SECTION 8.2     | Amendments.                               |   |
| SECTION 8.3     | Notices.                                  |   |
| SECTION 8.4     | Benefit.                                  |   |
| SECTION 8.5     | Governing  Law.                           |   |
| SECTION 8.6     | Counterparts.                             |   |

 

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GUARANTEE AGREEMENT

 

This GUARANTEE AGREEMENT (the “Guarantee”), dated asof September 25, 2003, is executed and delivered by HF Financial Corp., asavings and loan holding company incorporated in Delaware (the “Guarantor”),and Wilmington Trust Company, a Delaware banking corporation, as trustee (the“Guarantee Trustee”), for the benefit of the Holders (as defined herein) fromtime to time of the Capital Securities (as defined herein) of HF FinancialCapital Trust IV, a Delaware statutory trust (the “Issuer”).

 

WHEREAS, pursuant to an Amended and RestatedDeclaration of Trust (the “Declaration”), dated as of September 25, 2003, amongthe trustees named therein of the Issuer, HF Financial Corp., as sponsor, andthe Holders from time to time of undivided beneficial interests in the assetsof the Issuer, the Issuer is issuing on the date hereof securities, having anaggregate liquidation amount of $7,000,000, designated in the Declaration asMMCapSSM (the “Capital Securities”); and

 

WHEREAS, as incentive for the Holders to purchase theCapital Securities, the Guarantor desires irrevocably and unconditionally toagree, to the extent set forth in this Guarantee, to pay to the Holders ofCapital Securities the Guarantee Payments (as defined herein) and to makecertain other payments on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the purchase byeach Holder of the Capital Securities, which purchase the Guarantor herebyagrees shall benefit the Guarantor, the Guarantor executes and delivers thisGuarantee for the benefit of the Holders.

 

# ARTICLEI

#  

# DEFINITIONS AND INTERPRETATION

#  

## SECTION 1.1  Definitions and Interpretation.

##  

In this Guarantee, unless the context otherwiserequires:

 

### (a)                                  capitalizedterms used in this Guarantee but not defined in the preamble above have therespective meanings assigned to them in this Section 1.1;

###  

### (b)                                 aterm defined anywhere in this Guarantee has the same meaning throughout;

###  

### (c)                                  allreferences to “the Guarantee” or “this Guarantee” are to this Guarantee asmodified, supplemented or amended from time to time;

###  

### (d)                                 allreferences in this Guarantee to Articles and Sections are to Articles andSections of this Guarantee, unless otherwise specified;

###  

### (e)                                  termsdefined in the Declaration as of the date of execution of this Guarantee havethe same meanings when used in this Guarantee, unless otherwise defined in thisGuarantee or unless the context otherwise requires; and

 

### 

###  

### (f)                                    areference to the singular includes the plural and vice versa.

###  

“Beneficiaries” means any Person to whom the Issuer isor hereafter becomes indebted or liable.

 

“Common Securities” has the meaning specified in theDeclaration.

 

“Corporate Trust Office”  means the office of the Guarantee Trustee at which at anyparticular time its corporate trust business shall be principally administered,which at all times shall be located within the United States and at the time ofthe execution of this Guarantee shall be Rodney Square North, 1100 North MarketStreet, Wilmington, DE 19890-0001.

 

“Covered Person” means any Holder of CapitalSecurities.

 

“Debenture Issuer” means HF Financial Corp. or anysuccessor entity resulting from any consolidation, amalgamation, merger orother business combination, in its capacity as issuer of the Debentures.

 

“Debentures” means the junior subordinated debenturesof the Debenture Issuer that are designated in the Indenture as the “FloatingRate Junior Subordinated Debt Securities due 2033” and held by theInstitutional Trustee (as defined in the Declaration) of the Issuer.

 

“Event of Default” has the meaning set forth inSection 2.4.

 

“Guarantee Payments” means the following payments ordistributions, without duplication, with respect to the Capital Securities, tothe extent not paid or made by the Issuer: (i) any accrued and unpaidDistributions (as defined in the Declaration) which are required to be paid onsuch Capital Securities to the extent the Issuer has funds available in theProperty Account (as defined in the Declaration) therefor at such time, (ii)the price payable upon the redemption of any Capital Securities to the extentthe Issuer has funds available in the Property Account therefor at such time,with respect to any Capital Securities that are (1) called for redemption bythe Issuer or (2) mandatorily redeemed by the Issuer, in each case, inaccordance with the terms of such Capital Securities, and (iii) upon avoluntary or involuntary liquidation, dissolution, winding-up or termination ofthe Issuer (other than in connection with the distribution of Debentures to theHolders of the Capital Securities in exchange therefor as provided in theDeclaration), the lesser of (a) the aggregate of the liquidation amount of theCapital Securities and all accrued and unpaid Distributions on the CapitalSecurities to the date of payment, to the extent the Issuer has funds availablein the Property Account therefor at such time, and (b) the amount of assets ofthe Issuer remaining available for distribution to Holders in liquidation ofthe Issuer after satisfaction of liabilities to creditors of the Issuer asrequired by applicable law (in either case, the “Liquidation Distribution”).

 

“Guarantee Trustee” means Wilmington Trust Company,until a Successor Guarantee Trustee has been appointed and has accepted suchappointment pursuant to the terms of this Guarantee and thereafter means eachsuch Successor Guarantee Trustee.

 

“Holder” means any Person in whose name any CapitalSecurities are registered on the books and records of the Issuer; provided,however, that, in determining whether the

 

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holders of the requisite percentage of CapitalSecurities have given any request, notice, consent or waiver hereunder,“Holder” shall not include the Guarantor or any Affiliate of the Guarantor.

 

“Indemnified Person” means the Guarantee Trustee(including in its individual capacity), any Affiliate of the Guarantee Trustee,or any officers, directors, shareholders, members, partners, employees,representatives, nominees, custodians or agents of the Guarantee Trustee.

 

“Indenture” means the Indenture, dated as of September25, 2003, between the Debenture Issuer and Wilmington Trust Company, not in itsindividual capacity but solely as trustee, and any indenture supplementalthereto pursuant to which the Debentures are to be issued to the InstitutionalTrustee of the Issuer.

 

“Liquidation Distribution” has the meaning set forthin the definition of “Guarantee Payments” herein.

 

“Majority in liquidation amount of the CapitalSecurities” means Holder(s) of outstanding Capital Securities, voting togetheras a class, but separately from the holders of Common Securities, of more than50% of the aggregate liquidation amount (including the amount that would bepaid upon the redemption, liquidation or otherwise on the date upon which thevoting percentages are determined, plus unpaid Distributions accrued thereon tosuch date) of all Capital Securities then outstanding.

 

“Obligations” means any costs, expenses or liabilities(but not including liabilities related to taxes) of the Issuer, other thanobligations of the Issuer to pay to holders of any Trust Securities the amountsdue such holders pursuant to the terms of the Trust Securities.

 

“Officer’s Certificate” means, with respect to anyPerson, a certificate signed by one Authorized Officer of such Person.  Any Officer’s Certificate delivered withrespect to compliance with a condition or covenant provided for in thisGuarantee shall include:

 

(a)                                  astatement that such officer signing the Officer’s Certificate has read thecovenant or condition and the definitions relating thereto;

 

(b)                                 abrief statement of the nature and scope of the examination or investigationundertaken by such officer in rendering the Officer’s Certificate;

 

(c)                                  astatement that such officer has made such examination or investigation as, insuch officer’s opinion, is necessary to enable such officer to express aninformed opinion as to whether or not such covenant or condition has beencomplied with; and

 

(d)                                 astatement as to whether, in the opinion of such officer, such condition orcovenant has been complied with.

 

“Person” means a legal person, including anyindividual, corporation, estate, partnership, joint venture, association, jointstock company, limited liability company, trust,

 

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unincorporated association, or government or anyagency or political subdivision thereof, or any other entity of whatevernature.

 

“Responsible Officer” means, with respect to theGuarantee Trustee, any officer within the Corporate Trust Office of theGuarantee Trustee with direct responsibility for the administration of anymatters relating to this Guarantee, including any vice president, any assistantvice president, any secretary, any assistant secretary, the treasurer, anyassistant treasurer, any trust officer or other officer of the Corporate TrustOffice of the Guarantee Trustee customarily performing functions similar tothose performed by any of the above designated officers and also means, withrespect to a particular corporate trust matter, any other officer to whom suchmatter is referred because of that officer’s knowledge of and familiarity withthe particular subject.

 

“Successor Guarantee Trustee” means a successorGuarantee Trustee possessing the qualifications to act as Guarantee Trusteeunder Section 3.1.

 

“Trust Securities” means the Common Securities and theCapital Securities.

 

# ARTICLEII

#  

# POWERS,DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

#  

## SECTION 2.1  Powers and Duties of the GuaranteeTrustee.

##  

### (a)                                  ThisGuarantee shall be held by the Guarantee Trustee for the benefit of the Holdersof the Capital Securities, and the Guarantee Trustee shall not transfer thisGuarantee to any Person except a Holder of Capital Securities exercising his orher rights pursuant to Section 4.4 (b) or to a Successor Guarantee Trustee onacceptance by such Successor Guarantee Trustee of its appointment to act asSuccessor Guarantee Trustee.  The right,title and interest of the Guarantee Trustee shall automatically vest in anySuccessor Guarantee Trustee, and such vesting and cessation of title shall beeffective whether or not conveyancing documents have been executed anddelivered pursuant to the appointment of such Successor Guarantee Trustee.

###  

### (b)                                 Ifan Event of Default actually known to a Responsible Officer of the Guarantee Trusteehas occurred and is continuing, the Guarantee Trustee shall enforce thisGuarantee for the benefit of the Holders of the Capital Securities.

###  

### (c)                                  TheGuarantee Trustee, before the occurrence of any Event of Default and after thecuring or waiving of all Events of Default that may have occurred, shallundertake to perform only such duties as are specifically set forth in thisGuarantee, and no implied covenants shall be read into this Guarantee againstthe Guarantee Trustee.  In case an Eventof Default has occurred (that has not been cured or waived pursuant to Section2.4(b)) and is actually known to a Responsible Officer of the GuaranteeTrustee, the Guarantee Trustee shall exercise such of the rights and powersvested in it by this Guarantee, and use the same degree of care and skill inits exercise thereof, as a prudent person would exercise or use under thecircumstances in the conduct of his or her own affairs.

 

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### (d)                                 Noprovision of this Guarantee shall be construed to relieve the Guarantee Trusteefrom liability for its own negligent action, its own negligent failure to act,or its own willful misconduct or bad faith, except that:

###  

#### (i)                                     priorto the occurrence of any Event of Default and after the curing or waiving ofall Events of Default that may have occurred:

####  

##### (A)                              theduties and obligations of the Guarantee Trustee shall be determined solely bythe express provisions of this Guarantee, and the Guarantee Trustee shall notbe liable except for the performance of such duties and obligations as arespecifically set forth in this Guarantee, and no implied covenants orobligations shall be read into this Guarantee against the Guarantee Trustee;and

#####  

##### (B)                                inthe absence of bad faith on the part of the Guarantee Trustee, the GuaranteeTrustee may conclusively rely, as to the truth of the statements and thecorrectness of the opinions expressed therein, upon any certificates oropinions furnished to the Guarantee Trustee and conforming to the requirements ofthis Guarantee; but in the case of any such certificates or opinions furnishedto the Guarantee Trustee, the Guarantee Trustee shall be under a duty toexamine the same to determine whether or not on their face they conform to therequirements of this Guarantee;

#####  

#### (ii)                                  theGuarantee Trustee shall not be liable for any error of judgment made in goodfaith by a Responsible Officer of the Guarantee Trustee, unless it shall beproved that such Responsible Officer of the Guarantee Trustee or the GuaranteeTrustee was negligent in ascertaining the pertinent facts upon which suchjudgment was made;

####  

#### (iii)                               theGuarantee Trustee shall not be liable with respect to any action taken oromitted to be taken by it in good faith in accordance with the writtendirection of the Holders of a Majority in liquidation amount of the CapitalSecurities relating to the time, method and place of conducting any proceedingfor any remedy available to the Guarantee Trustee, or exercising any trust orpower conferred upon the Guarantee Trustee under this Guarantee; and

####  

#### (iv)                              noprovision of this Guarantee shall require the Guarantee Trustee to expend orrisk its own funds or otherwise incur personal financial liability in theperformance of any of its duties or in the exercise of any of its rights orpowers, if the Guarantee Trustee shall have reasonable grounds for believingthat the repayment of such funds is not reasonably assured to it under theterms of this Guarantee, or security and indemnity, reasonably satisfactory tothe Guarantee Trustee, against such risk or liability is not reasonably assuredto it.

####  

## SECTION 2.2  Certain Rights of the Guarantee Trustee.

##  

### (a)                                  Subjectto the provisions of Section 2.1:

 

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#### (i)                                     TheGuarantee Trustee may conclusively rely, and shall be fully protected in actingor refraining from acting upon, any resolution, certificate, statement,instrument, opinion, report, notice, request, direction, consent, order, bond,debenture, note, other evidence of indebtedness or other paper or documentbelieved by it to be genuine and to have been signed, sent or presented by theproper party or parties.

####  

#### (ii)                                  Anydirection or act of the Guarantor contemplated by this Guarantee shall besufficiently evidenced by an Officer’s Certificate.

####  

#### (iii)                               Whenever,in the administration of this Guarantee, the Guarantee Trustee shall deem itdesirable that a matter be proved or established before taking, suffering oromitting any action hereunder, the Guarantee Trustee (unless other evidence isherein specifically prescribed) may, in the absence of bad faith on its part,request and conclusively rely upon an Officer’s Certificate of the Guarantorwhich, upon receipt of such request, shall be promptly delivered by theGuarantor.

####  

#### (iv)                              TheGuarantee Trustee shall have no duty to see to any recording, filing orregistration of any instrument or other writing (or any rerecording, refilingor reregistration thereof).

####  

#### (v)                                 TheGuarantee Trustee may consult with counsel of its selection, and the advice oropinion of such counsel with respect to legal matters shall be full andcomplete authorization and protection in respect of any action taken, sufferedor omitted by it hereunder in good faith and in accordance with such advice oropinion.  Such counsel may be counsel tothe Guarantor or any of its Affiliates and may include any of itsemployees.  The Guarantee Trustee shallhave the right at any time to seek instructions concerning the administrationof this Guarantee from any court of competent jurisdiction.

####  

#### (vi)                              TheGuarantee Trustee shall be under no obligation to exercise any of the rights orpowers vested in it by this Guarantee at the request or direction of anyHolder, unless such Holder shall have provided to the Guarantee Trustee suchsecurity and indemnity, reasonably satisfactory to the Guarantee Trustee,against the costs, expenses (including attorneys’ fees and expenses and theexpenses of the Guarantee Trustee’s agents, nominees or custodians) andliabilities that might be incurred by it in complying with such request ordirection, including such reasonable advances as may be requested by theGuarantee Trustee; provided, however, that nothing contained in this Section2.2(a)(vi) shall be taken to relieve the Guarantee Trustee, upon the occurrenceof an Event of Default, of its obligation to exercise the rights and powersvested in it by this Guarantee.

####  

#### (vii)                           TheGuarantee Trustee shall not be bound to make any investigation into the factsor matters stated in any resolution, certificate, statement, instrument,opinion, report, notice, request, direction, consent, order, bond, debenture,note, other evidence of indebtedness or other paper or document, but theGuarantee Trustee, in its discretion, may make such further inquiry or investigationinto such facts or matters as it may see fit.

 

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#### (viii)                        TheGuarantee Trustee may execute any of the trusts or powers hereunder or performany duties hereunder either directly or by or through agents, nominees,custodians or attorneys, and the Guarantee Trustee shall not be responsible forany misconduct or negligence on the part of any agent or attorney appointedwith due care by it hereunder.

####  

#### (ix)                                Anyaction taken by the Guarantee Trustee or its agents hereunder shall bind theHolders of the Capital Securities, and the signature of the Guarantee Trusteeor its agents alone shall be sufficient and effective to perform any suchaction.  No third party shall berequired to inquire as to the authority of the Guarantee Trustee to so act oras to its compliance with any of the terms and provisions of this Guarantee,both of which shall be conclusively evidenced by the Guarantee Trustee’s or itsagent’s taking such action.

####  

#### (x)                                   Wheneverin the administration of this Guarantee the Guarantee Trustee shall deem itdesirable to receive instructions with respect to enforcing any remedy or rightor taking any other action hereunder, the Guarantee Trustee (A) may requestinstructions from the Holders of a Majority in liquidation amount of theCapital Securities, (B) may refrain from enforcing such remedy or right ortaking such other action until such instructions are received and (C) shall beprotected in conclusively relying on or acting in accordance with suchinstructions.

####  

#### (xi)                                TheGuarantee Trustee shall not be liable for any action taken, suffered, oromitted to be taken by it in good faith and reasonably believed by it to beauthorized or within the discretion or rights or powers conferred upon it bythis Guarantee.

####  

### (b)                                 Noprovision of this Guarantee shall be deemed to impose any duty or obligation onthe Guarantee Trustee to perform any act or acts or exercise any right, power,duty or obligation conferred or imposed on it, in any jurisdiction in which itshall be illegal or in which the Guarantee Trustee shall be unqualified orincompetent in accordance with applicable law to perform any such act or actsor to exercise any such right, power, duty or obligation.  No permissive power or authority available tothe Guarantee Trustee shall be construed to be a duty.

###  

## SECTION 2.3  Not Responsible for Recitals or Issuanceof Guarantee.

##  

The recitals contained in this Guarantee shall betaken as the statements of the Guarantor, and the Guarantee Trustee does not assumeany responsibility for their correctness. The Guarantee Trustee makes no representation as to the validity orsufficiency of this Guarantee.

 

## SECTION 2.4  Events of Default; Waiver.

##  

### (a)                                  An“Event of Default” under this Guarantee will occur upon the failure of theGuarantor to perform any of its payment or other obligations hereunder.

###  

### (b)                                 TheHolders of a Majority in liquidation amount of the Capital Securities may,voting or consenting as a class, on behalf of the Holders of all of the CapitalSecurities,

 

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### waive any pastEvent of Default and its consequences. Upon such waiver, any such Event of Default shall cease to exist, andshall be deemed to have been cured, for every purpose of this Guarantee, but nosuch waiver shall extend to any subsequent or other default or Event of Defaultor impair any right consequent thereon.

###  

## SECTION 2.5  Events of Default; Notice.

##  

### (a)                                  TheGuarantee Trustee shall, within 90 days after the occurrence of an Event of Default,transmit by mail, first class postage prepaid, to the Holders of the CapitalSecurities, notices of all Events of Default actually known to a ResponsibleOfficer of the Guarantee Trustee, unless such defaults have been cured beforethe giving of such notice, provided, however, that the Guarantee Trustee shallbe protected in withholding such notice if and so long as a Responsible Officerof the Guarantee Trustee in good faith determines that the withholding of suchnotice is in the interests of the Holders of the Capital Securities.

###  

### (b)                                 TheGuarantee Trustee shall not be charged with knowledge of any Event of Defaultunless the Guarantee Trustee shall have received written notice thereof fromthe Guarantor or a Holder of the Capital Securities, or a Responsible Officerof the Guarantee Trustee charged with the administration of this Guaranteeshall have actual knowledge thereof.

###  

# ARTICLE III

#  

# THE GUARANTEE TRUSTEE

#  

## SECTION 3.1  The Guarantee Trustee; Eligibility.

##  

### (a)                                  Thereshall at all times be a Guarantee Trustee which shall:

###  

#### (i)                                     notbe an Affiliate of the Guarantor; and

####  

#### (ii)                                  bea corporation or national association organized and doing business under thelaws of the United States of America or any state thereof or of the District ofColumbia, or Person authorized under such laws to exercise corporate trustpowers, having a combined capital and surplus of at least 50 million U.S.dollars ($50,000,000), and subject to supervision or examination by federal,state or District of Columbia authority. If such corporation or national association publishes reports ofcondition at least annually, pursuant to law or to the requirements of thesupervising or examining authority referred to above, then, for the purposes ofthis Section 3.1(a)(ii), the combined capital and surplus of such corporationor national association shall be deemed to be its combined capital and surplusas set forth in its most recent report of condition so published.

####  

### (b)                                 Ifat any time the Guarantee Trustee shall cease to be eligible to so act underSection 3.1(a), the Guarantee Trustee shall immediately resign in the mannerand with the effect set forth in Section 3.2(c).

###  

### (c)                                  Ifthe Guarantee Trustee has or shall acquire any “conflicting interest” withinthe meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trusteeshall

 

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### either eliminatesuch interest or resign to the extent and in the manner provided by, andsubject to, this Guarantee.

###  

## SECTION 3.2  Appointment, Removal and Resignation ofthe Guarantee Trustee.

##  

### (a)                                  Subjectto Section 3.2(b), the Guarantee Trustee may be appointed or removed withoutcause at any time by the Guarantor except during an Event of Default.

###  

### (b)                                 TheGuarantee Trustee shall not be removed in accordance with Section 3.2(a) untila Successor Guarantee Trustee has been appointed and has accepted suchappointment by written instrument executed by such Successor Guarantee Trusteeand delivered to the Guarantor.

###  

### (c)                                  TheGuarantee Trustee appointed to office shall hold office until a SuccessorGuarantee Trustee shall have been appointed or until its removal orresignation.  The Guarantee Trustee mayresign from office (without need for prior or subsequent accounting) by aninstrument in writing executed by the Guarantee Trustee and delivered to theGuarantor, which resignation shall not take effect until a Successor GuaranteeTrustee has been appointed and has accepted such appointment by an instrumentin writing executed by such Successor Guarantee Trustee and delivered to theGuarantor and the resigning Guarantee Trustee.

###  

### (d)                                 Ifno Successor Guarantee Trustee shall have been appointed and acceptedappointment as provided in this Section 3.2 within 60 days after delivery of aninstrument of removal or resignation, the Guarantee Trustee resigning or beingremoved may petition any court of competent jurisdiction for appointment of aSuccessor Guarantee Trustee.  Such courtmay thereupon, after prescribing such notice, if any, as it may deem proper, appointa Successor Guarantee Trustee.

###  

### (e)                                  NoGuarantee Trustee shall be liable for the acts or omissions to act of anySuccessor Guarantee Trustee.

###  

### (f)                                    Upontermination of this Guarantee or removal or resignation of the GuaranteeTrustee pursuant to this Section 3.2, the Guarantor shall pay to the GuaranteeTrustee all amounts owing to the Guarantee Trustee under Sections 7.2 and 7.3accrued to the date of such termination, removal or resignation.

###  

# ARTICLEIV

#  

# GUARANTEE

#  

## SECTION 4.1  Guarantee.

##  

### (a)                                  TheGuarantor irrevocably and unconditionally agrees to pay in full to the Holdersthe Guarantee Payments (without duplication of amounts theretofore paid by theIssuer), as and when due, regardless of any defense (except defense of paymentby the Issuer), right of set-off or counterclaim that the Issuer may have orassert.  The Guarantor’s obligation tomake a Guarantee Payment may be satisfied by direct payment of the requiredamounts by the Guarantor to the Holders or by causing the Issuer to pay suchamounts to the Holders.

 

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### (b)                                 TheGuarantor hereby also agrees to assume any and all Obligations of the Issuerand in the event any such Obligation is not so assumed, subject to the termsand conditions hereof, the Guarantor hereby irrevocably and unconditionallyguarantees to each Beneficiary the full payment, when and as due, of any andall Obligations to such Beneficiaries. This Guarantee is intended to be for the Beneficiaries who have receivednotice hereof.

###  

## SECTION 4.2  Waiver of Notice and Demand.

##  

The Guarantor hereby waives notice of acceptance ofthis Guarantee and of any liability to which it applies or may apply,presentment, demand for payment, any right to require a proceeding firstagainst the Issuer or any other Person before proceeding against the Guarantor,protest, notice of nonpayment, notice of dishonor, notice of redemption and allother notices and demands.

 

## SECTION 4.3  Obligations Not Affected.

##  

The obligations, covenants, agreements and duties ofthe Guarantor under this Guarantee shall in no way be affected or impaired byreason of the happening from time to time of any of the following:

 

### (a)                                  therelease or waiver, by operation of law or otherwise, of the performance orobservance by the Issuer of any express or implied agreement, covenant, term orcondition relating to the Capital Securities to be performed or observed by theIssuer;

###  

### (b)                                 theextension of time for the payment by the Issuer of all or any portion of theDistributions, the price payable upon the redemption of the Capital Securities,the Liquidation Distribution or any other sums payable under the terms of theCapital Securities or the extension of time for the performance of any otherobligation under, arising out of, or in connection with, the Capital Securities(other than an extension of time for the payment of the Distributions, theprice payable upon the redemption of the Capital Securities, the LiquidationDistribution or other sums payable that results from the extension of anyinterest payment period on the Debentures);

###  

### (c)                                  anyfailure, omission, delay or lack of diligence on the part of the Holders toenforce, assert or exercise any right, privilege, power or remedy conferred onthe Holders pursuant to the terms of the Capital Securities, or any action onthe part of the Issuer granting indulgence or extension of any kind;

###  

### (d)                                 thevoluntary or involuntary liquidation, dissolution, sale of any collateral,receivership, insolvency, bankruptcy, assignment for the benefit of creditors,reorganization, arrangement, composition or readjustment of debt of, or othersimilar proceedings affecting, the Issuer or any of the assets of the Issuer;

###  

### (e)                                  anyinvalidity of, or defect or deficiency in, the Capital Securities;

###  

### (f)                                    thesettlement or compromise of any obligation guaranteed hereby or herebyincurred; or

 

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### (g)                                 anyother circumstance whatsoever that might otherwise constitute a legal orequitable discharge or defense of a guarantor, it being the intent of thisSection 4.3 that the obligations of the Guarantor hereunder shall be absoluteand unconditional under any and all circumstances.

###  

There shall be no obligation of the Holders to givenotice to, or obtain consent of, the Guarantor with respect to the happening ofany of the foregoing.

 

## SECTION 4.4  Rights of Holders.

##  

### (a)                                  TheHolders of a Majority in liquidation amount of the Capital Securities have theright to direct the time, method and place of conducting any proceeding for anyremedy available to the Guarantee Trustee in respect of this Guarantee or todirect the exercise of any trust or power conferred upon the Guarantee Trusteeunder this Guarantee; provided, however, that (subject to Sections 2.1 and 2.2)the Guarantee Trustee shall have the right to decline to follow any suchdirection if the Guarantee Trustee shall determine that the actions so directedwould be unjustly prejudicial to the Holders not taking part in such directionor if the Guarantee Trustee being advised by legal counsel determines that theaction or proceeding so directed may not lawfully be taken or if the GuaranteeTrustee in good faith by its board of directors or trustees, executivecommittee or a trust committee of directors or trustees and/or ResponsibleOfficers shall determine that the action or proceeding so directed wouldinvolve the Guarantee Trustee in personal liability.

###  

### (b)                                 AnyHolder of Capital Securities may institute a legal proceeding directly againstthe Guarantor to enforce the Guarantee Trustee’s rights under this Guarantee,without first instituting a legal proceeding against the Issuer, the GuaranteeTrustee or any other Person.  TheGuarantor waives any right or remedy to require that any such action be broughtfirst against the Issuer, the Guarantee Trustee or any other Person before soproceeding directly against the Guarantor.

###  

## SECTION 4.5  Guarantee of Payment.

##  

This Guarantee creates a guarantee of payment and notof collection.

 

## SECTION 4.6  Subrogation.

##  

The Guarantor shall be subrogated to all (if any)rights of the Holders of Capital Securities against the Issuer in respect ofany amounts paid to such Holders by the Guarantor under this Guarantee;provided, however, that the Guarantor shall not (except to the extent requiredby applicable provisions of law) be entitled to enforce or exercise any rightthat it may acquire by way of subrogation or any indemnity, reimbursement orother agreement, in all cases as a result of payment under this Guarantee, if,after giving effect to any such payment, any amounts are due and unpaid underthis Guarantee.  If any amount shall bepaid to the Guarantor in violation of the preceding sentence, the Guarantoragrees to hold such amount in trust for the Holders and to pay over such amountto the Holders.

 

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## SECTION 4.7  Independent Obligations.

##  

The Guarantor acknowledges that its obligationshereunder are independent of the obligations of the Issuer with respect to theCapital Securities and that the Guarantor shall be liable as principal and asdebtor hereunder to make Guarantee Payments pursuant to the terms of thisGuarantee notwithstanding the occurrence of any event referred to insubsections (a) through (g), inclusive, of Section 4.3 hereof.

 

## SECTION 4.8                          Enforcement.

##  

A Beneficiary may enforce the Obligations of theGuarantor contained in Section 4.1(b) directly against the Guarantor, and theGuarantor waives any right or remedy to require that any action be broughtagainst the Issuer or any other person or entity before proceeding against theGuarantor.

 

The Guarantor shall be subrogated to all rights (ifany) of any Beneficiary against the Issuer in respect of any amounts paid tothe Beneficiaries by the Guarantor under this Guarantee; provided, however,that the Guarantor shall not (except to the extent required by applicableprovisions of law) be entitled to enforce or exercise any rights that it mayacquire by way of subrogation or any indemnity, reimbursement or other agreement,in all cases as a result of payment under this Guarantee, if, after givingeffect to such payment, any amounts are due and unpaid under thisGuarantee.  If any amount shall be paidto the Guarantor in violation of the preceding sentence, the Guarantor agreesto hold such amount in trust for the Beneficiaries and to pay over such amountto the Beneficiaries.

 

# ARTICLEV

#  

# LIMITATION OF TRANSACTIONS;SUBORDINATION

#  

## SECTION 5.1  Limitation of Transactions.

##  

So long as any Capital Securities remain outstanding,if (a) there shall have occurred and be continuing an Event of Default or (b)Debenture Issuer shall have selected an Extension Period as provided in theIndenture and such period, or any extension thereof, shall have commenced andbe continuing, then the Guarantor may not (x) declare or pay any dividends ordistributions on, or redeem, purchase, acquire, or make a liquidation paymentwith respect to, any of the Guarantor’s capital stock, (y) make any payment ofprincipal of or interest or premium, if any, on or repay, repurchase or redeemany debt securities of the Guarantor that rank in all respects *pari passu*with or junior in interest to the Debentures or (z) make any payment under anyguarantees of the Guarantor that rank in all respects *pari passu* with or junior ininterest to this Guarantee (other than (i) repurchases, redemptions or otheracquisitions of shares of capital stock of the Guarantor (A) in connection withany employment contract, benefit plan or other similar arrangement with or forthe benefit of one or more employees, officers, directors, or consultants, (B)in connection with a dividend reinvestment or stockholder stock purchase planor (C) in connection with the issuance of capital stock of the Guarantor (orsecurities convertible into or exercisable for such capital stock), asconsideration in an acquisition transaction entered into prior to theoccurrence of the Event of Default or the

 

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applicable Extension Period, (ii) as a result of anyexchange or conversion of any class or series of the Guarantor’s capital stock(or any capital stock of a subsidiary of the Guarantor) for any class or seriesof the Guarantor’s capital stock or of any class or series of the Guarantor’sindebtedness for any class or series of the Guarantor’s capital stock, (iii)the purchase of fractional interests in shares of the Guarantor’s capital stockpursuant to the conversion or exchange provisions of such capital stock or thesecurity being converted or exchanged, (iv) any declaration of a dividend inconnection with any stockholder’s rights plan, or the issuance of rights, stockor other property under any stockholder’s rights plan, or the redemption orrepurchase of rights pursuant thereto, or (v) any dividend in the form ofstock, warrants, options or other rights where the dividend stock or the stockissuable upon exercise of such warrants, options or other rights is the samestock as that on which the dividend is being paid or ranks *pari passu* with or junior ininterest to such stock).

 

## SECTION 5.2  Ranking.

##  

This Guarantee will constitute an unsecured obligationof the Guarantor and will rank subordinate and junior in right of payment toall present and future Senior Indebtedness (as defined in the Indenture) of theGuarantor.  By their acceptance thereof,each Holder of Capital Securities agrees to the foregoing provisions of thisGuarantee and the other terms set forth herein.

 

# ARTICLEVI

#  

# TERMINATION

#  

## SECTION 6.1  Termination.

##  

This Guarantee shall terminate as to the CapitalSecurities (i) upon full payment of the price payable upon redemption of allCapital Securities then outstanding, (ii) upon the distribution of all of theDebentures to the Holders of all of the Capital Securities or (iii) upon fullpayment of the amounts payable in accordance with the Declaration upondissolution of the Issuer.  ThisGuarantee will continue to be effective or will be reinstated, as the case maybe, if at any time any Holder of Capital Securities must restore payment of anysums paid under the Capital Securities or under this Guarantee.

 

# ARTICLE VII

#  

# INDEMNIFICATION

#  

## SECTION 7.1  Exculpation.

##  

### (a)                                  NoIndemnified Person shall be liable, responsible or accountable in damages orotherwise to the Guarantor or any Covered Person for any loss, damage or claimincurred by reason of any act or omission of such Indemnified Person in goodfaith in accordance with this Guarantee and in a manner that such IndemnifiedPerson reasonably believed to be within the scope of the authority conferred onsuch Indemnified Person by this Guarantee or by law, except that an IndemnifiedPerson shall be liable for any such loss, damage or claim

 

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### incurred by reasonof such Indemnified Person’s negligence, willful misconduct or bad faith withrespect to such acts or omissions.

###  

### (b)                                 AnIndemnified Person shall be fully protected in relying in good faith upon therecords of the Issuer or the Guarantor and upon such information, opinions,reports or statements presented to the Issuer or the Guarantor by any Person asto matters the Indemnified Person reasonably believes are within such otherPerson’s professional or expert competence and who, if selected by suchIndemnified Person, has been selected with reasonable care by such IndemnifiedPerson, including information, opinions, reports or statements as to the valueand amount of the assets, liabilities, profits, losses, or any other factspertinent to the existence and amount of assets from which Distributions toHolders of Capital Securities might properly be paid.

###  

## SECTION 7.2  Indemnification.

##  

### (a)                                  TheGuarantor agrees to indemnify each Indemnified Person for, and to hold eachIndemnified Person harmless against, any and all loss, liability, damage, claimor expense incurred without negligence, willful misconduct or bad faith on thepart of the Indemnified Person, arising out of or in connection with theacceptance or administration of the trust or trusts hereunder, including butnot limited to the costs and expenses (including reasonable legal fees andexpenses) of the Indemnified Person defending itself against, or investigating,any claim or liability in connection with the exercise or performance of any ofthe Indemnified Person’s powers or duties hereunder.  The obligation to indemnify as set forth in this Section 7.2shall survive the resignation or removal of the Guarantee Trustee and thetermination of this Guarantee.

###  

### (b)                                 Promptlyafter receipt by an Indemnified Person under this Section 7.2 of notice of thecommencement of any action, such Indemnified Person will, if a claim in respectthereof is to be made against the Guarantor under this Section 7.2, notify theGuarantor in writing of the commencement thereof; but the failure so to notifythe Guarantor (i) will not relieve the Guarantor from liability under paragraph(a) above unless and to the extent that the Guarantor did not otherwise learnof such action and such failure results in the forfeiture by the Guarantor ofsubstantial rights and defenses and (ii) will not, in any event, relieve theGuarantor from any obligations to any Indemnified Person other than theindemnification obligation provided in paragraph (a) above.  The Guarantor shall be entitled to appointcounsel of the Guarantor’s choice at the Guarantor’s expense to represent theIndemnified Person in any action for which indemnification is sought (in whichcase the Guarantor shall not thereafter be responsible for the fees andexpenses of any separate counsel retained by the Indemnified Person or Personsexcept as set forth below); provided, however, that such counsel shall besatisfactory to the Indemnified Person. Notwithstanding the Guarantor’s election to appoint counsel to representthe Indemnified Person in any action, the Indemnified Person shall have theright to employ separate counsel (including local counsel), and the Guarantorshall bear the reasonable fees, costs and expenses of such separate counsel, if(i) the use of counsel chosen by the Guarantor to represent the IndemnifiedPerson would present such counsel with a conflict of interest, (ii) the actualor potential defendants in, or targets of, any such action include both theIndemnified Person and the Guarantor and the Indemnified Person shall havereasonably concluded that there may be legal defenses available to it and/orother Indemnified Persons

 

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### which aredifferent from or additional to those available to the Guarantor, (iii) theGuarantor shall not have employed counsel satisfactory to the IndemnifiedPerson to represent the Indemnified Person within a reasonable time afternotice of the institution of such action or (iv) the Guarantor shall authorizethe Indemnified Person to employ separate counsel at the expense of theGuarantor.  The Guarantor will not,without the prior written consent of the Indemnified Persons, settle orcompromise or consent to the entry of any judgment with respect to any pendingor threatened claim, action, suit or proceeding in respect of whichindemnification or contribution may be sought hereunder (whether or not theIndemnified Persons are actual or potential parties to such claim or action)unless such settlement, compromise or consent includes an unconditional releaseof each Indemnified Person from all liability arising out of such claim,action, suit or proceeding.

###  

## SECTION 7.3  Compensation; Reimbursement of Expenses.

##  

The Guarantor agrees:

 

### (a)                                  topay to the Guarantee Trustee from time to time such compensation for all servicesrendered by it hereunder as the parties shall agree to from time to time (whichcompensation shall not be limited by any provision of law in regard to thecompensation of a trustee of an express trust); and

###  

### (b)                                 exceptas otherwise expressly provided herein, to reimburse the Guarantee Trustee uponrequest for all reasonable expenses, disbursements and advances incurred ormade by it in accordance with any provision of this Guarantee (including thereasonable compensation and the expenses and disbursements of its agents andcounsel), except any such expense, disbursement or advance as may beattributable to the negligence, willful misconduct or bad faith of theGuarantee Trustee.

###  

The provisions of this Section 7.3 shall survive theresignation or removal of the Guarantee Trustee and the termination of thisGuarantee.

 

# ARTICLE VIII

#  

# MISCELLANEOUS

#  

## SECTION 8.1  Successors and Assigns.

##  

All guarantees and agreements contained in thisGuarantee shall bind the successors, assigns, receivers, trustees and representativesof the Guarantor and shall inure to the benefit of the Holders of the CapitalSecurities then outstanding.  Except inconnection with any merger or consolidation of the Guarantor with or intoanother entity or any sale, transfer or lease of the Guarantor’s assets toanother entity, in each case to the extent permitted under the Indenture, theGuarantor may not assign its rights or delegate its obligations under thisGuarantee without the prior approval of the Holders of a Majority in liquidationamount of the Capital Securities.

 

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## SECTION 8.2                          Amendments.

##  

Except with respect to any changes that do notadversely affect the powers, preferences, rights or interests of Holders of theCapital Securities in any material respect (in which case no approval ofHolders will be required), this Guarantee may be amended only with the priorapproval of the Holders of a Majority in liquidation amount of the CapitalSecurities.  The provisions of theDeclaration with respect to amendments thereof shall apply equally with respectto amendments of the Guarantee.

 

## SECTION 8.3  Notices.

##  

All notices provided for in this Guarantee shall be inwriting, duly signed by the party giving such notice, and shall be delivered,telecopied or mailed by first class mail, as follows:

 

### (a)                                  ifgiven to the Guarantee Trustee, at the Guarantee Trustee’s mailing address setforth below (or such other address as the Guarantee Trustee may give notice ofto the Holders of the Capital Securities): Wilmington Trust Company, RodneySquare North, 1100 North Market Street, Wilmington, Delaware 19890-0001,Attention: Corporate Trust Administration, Telecopy: 302-651-8882,Telephone:  302-651-1000;

###  

### (b)                                 ifgiven to the Guarantor, at the Guarantor’s mailing address set forth below (orsuch other address as the Guarantor may give notice of to the Holders of theCapital Securities and to the Guarantee Trustee): HF Financial Corp., 225 SouthMain Avenue, Sioux Falls, South Dakota 57104, Attention: Pamela F. Russo,Telecopy: (605) 333-7621, Telephone: (605) 333-7558; or

###  

### (c)                                  ifgiven to any Holder of the Capital Securities, at the address set forth on thebooks and records of the Issuer.

###  

All such notices shall be deemed to have been givenwhen received in person, telecopied with receipt confirmed, or mailed by firstclass mail, postage prepaid, except that if a notice or other document isrefused delivery or cannot be delivered because of a changed address of whichno notice was given, such notice or other document shall be deemed to have beendelivered on the date of such refusal or inability to deliver.

 

## SECTION 8.4  Benefit.

##  

This Guarantee is solely for the benefit of theHolders of the Capital Securities and, subject to Section 2.1(a), is not separatelytransferable from the Capital Securities.

 

## SECTION 8.5  Governing Law.

##  

THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED INACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTOF LAW PRINCIPLES OF SAID STATE OTHER THAN SECTION 5-1401 OF THE NEW YORKGENERAL OBLIGATIONS LAW.

 

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## SECTION 8.6  Counterparts.

##  

This Guarantee may contain more than one counterpartof the signature page and this Guarantee may be executed by the affixing of thesignature of the Guarantor and the Guarantee Trustee to any of such counterpartsignature pages.  All of suchcounterpart signature pages shall be read as though one, and they shall havethe same force and effect as though all of the signers had signed a singlesignature page.

 

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THIS GUARANTEE is executed as of the day and yearfirst above written.

 
|   | HF FINANCIAL  CORP.,       |
|--------|----------------------------|
|   | as Guarantor               |
|   |                       |
|   | By:                        |   |   |
|   | Name:                      |
|   | Title:                     |
|   |                       |
|   | WILMINGTON TRUST  COMPANY, |
|   | as Guarantee  Trustee      |
|   |                       |
|   | By:                        |   |   |
|   | Name:                      |
|   | Title:                     |

 

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