**Exhibit10.2**

 

 

HF FINANCIAL CORP.

 

as Issuer

 

 

INDENTURE

 

Dated as ofSeptember 25, 2003

 

 

WILMINGTON TRUST COMPANY

 

as Trustee

 

 

FLOATING RATE JUNIORSUBORDINATED DEBT SECURITIES DUE 2033

 

 

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**TABLE OF CONTENTS**

 
| ARTICLE I                                   DEFINITIONS                           |          |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|
|                                                                                                                                                                                                                                                   |          |   |   |   |
|                                                                                                                                                                                                                                                   | Section  1.01 |   | Definitions. |   |
|                                                                                                                                                                                                                                                   |          |   |   |   |
| ARTICLE II                                 DEBT  SECURITIES                            |          |
|                                                                                                                                                                                                                                                   |          |   |   |   |
|                                                                                                                                                                                                                                                   | Section  2.01 |   | Authentication  and Dating. |   |
|                                                                                                                                                                                                                                                   | Section  2.02 |   | Form of  Trustee’s Certificate of Authentication. |   |
|                                                                                                                                                                                                                                                   | Section  2.03 |   | Form and  Denomination of Debt Securities. |   |
|                                                                                                                                                                                                                                                   | Section  2.04 |   | Execution of  Debt Securities. |   |
|                                                                                                                                                                                                                                                   | Section  2.05 |   | Exchange  and Registration of Transfer of Debt Securities. |   |
|                                                                                                                                                                                                                                                   | Section  2.06 |   | Mutilated,  Destroyed, Lost or Stolen Debt Securities. |   |
|                                                                                                                                                                                                                                                   | Section  2.07 |   | Temporary  Debt Securities. |   |
|                                                                                                                                                                                                                                                   | Section  2.08 |   | Payment of  Interest. |   |
|                                                                                                                                                                                                                                                   | Section  2.09 |   | Cancellation  of Debt Securities Paid, etc. |   |
|                                                                                                                                                                                                                                                   | Section  2.10 |   | Computation  of Interest. |   |
|                                                                                                                                                                                                                                                   | Section  2.11 |   | Extension  of Interest Payment Period. |   |
|                                                                                                                                                                                                                                                   | Section  2.12 |   | CUSIP  Numbers. |   |
|                                                                                                                                                                                                                                                   |          |   |   |   |
| ARTICLE III                             PARTICULAR  COVENANTS OF THE COMPANY                               |          |
|                                                                                                                                                                                                                                                   |          |   |   |   |
|                                                                                                                                                                                                                                                   | Section  3.01 |   | Payment of  Principal, Premium and Interest; Agreed Treatment of the Debt Securities. |   |
|                                                                                                                                                                                                                                                   | Section  3.02 |   | Offices for  Notices and Payments, etc. |   |
|                                                                                                                                                                                                                                                   | Section  3.03 |   | Appointments  to Fill Vacancies in Trustee’s Office. |   |
|                                                                                                                                                                                                                                                   | Section  3.04 |   | Provision  as to Paying Agent. |   |
|                                                                                                                                                                                                                                                   | Section  3.05 |   | Certificate  to Trustee. |   |
|                                                                                                                                                                                                                                                   | Section  3.06 |   | Additional  Amounts. |   |
|                                                                                                                                                                                                                                                   | Section  3.07 |   | Compliance  with Consolidation Provisions. |   |
|                                                                                                                                                                                                                                                   | Section  3.08 |   | Limitation  on Dividends. |   |
|                                                                                                                                                                                                                                                   | Section  3.09 |   | Covenants  as to the Trust. |   |
|                                                                                                                                                                                                                                                   |          |   |   |   |
| ARTICLE IV                             LISTS                                                               |          |   |
|                                                                                                                                                                                                                                                   |          |   |   |   |
|                                                                                                                                                                                                                                                   | Section  4.01 |   | Securityholders’  Lists. |   |
|                                                                                                                                                                                                                                                   | Section  4.02 |   | Preservation  and Disclosure of Lists. |   |
|                                                                                                                                                                                                                                                   | Section  4.03 |   | Financial  and Other Information. |   |
|                                                                                                                                                                                                                                                   |          |   |   |   |
| ARTICLE V                                 REMEDIES  OF THE TRUSTEE AND SECURITYHOLDERS |          |
|                                                                                                                                                                                                                                                   |          |   |   |   |
|                                                                                                                                                                                                                                                   | Section  5.01 |   | Events of  Default. |   |
|                                                                                                                                                                                                                                                   | Section  5.02 |   | Payment of  Debt Securities on Default; Suit Therefor. |   |
|                                                                                                                                                                                                                                                   | Section  5.03 |   | Application  of Moneys Collected by Trustee. |   |
|                                                                                                                                                                                                                                                   | Section  5.04 |   | Proceedings  by Securityholders. |   |

 

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|                                                                                                                                                                                                       | Section  5.05 |   | Proceedings  by Trustee.                                                                              |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|--------|-------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                       | Section  5.06 |   | Remedies  Cumulative and Continuing.                                                                  |   |
|                                                                                                                                                                                                       | Section  5.07 |   | Direction  of Proceedings and Waiver of Defaults by Majority of Securityholders.                      |   |
|                                                                                                                                                                                                       | Section  5.08 |   | Notice of  Defaults.                                                                                  |   |
|                                                                                                                                                                                                       | Section  5.09 |   | Undertaking  to Pay Costs.                                                                            |   |
|                                                                                                                                                                                                       |          |   |                                                                                                  |   |
| ARTICLE VI                             CONCERNING  THE TRUSTEE |          |
|                                                                                                                                                                                                       |          |   |                                                                                                  |   |
|                                                                                                                                                                                                       | Section  6.01 |   | Duties and  Responsibilities of Trustee.                                                              |   |
|                                                                                                                                                                                                       | Section  6.02 |   | Reliance on  Documents, Opinions, etc.                                                                |   |
|                                                                                                                                                                                                       | Section  6.03 |   | No  Responsibility for Recitals, etc.                                                                 |   |
|                                                                                                                                                                                                       | Section  6.04 |   | Trustee,  Authenticating Agent, Paying Agents, Transfer Agents or Registrar May Own  Debt Securities. |   |
|                                                                                                                                                                                                       | Section  6.05 |   | Moneys to  be Held in Trust.                                                                          |   |
|                                                                                                                                                                                                       | Section  6.06 |   | Compensation  and Expenses of Trustee.                                                                |   |
|                                                                                                                                                                                                       | Section  6.07 |   | Officers’  Certificate as Evidence.                                                              |   |
|                                                                                                                                                                                                       | Section  6.08 |   | Eligibility  of Trustee.                                                                              |   |
|                                                                                                                                                                                                       | Section  6.09 |   | Resignation  or Removal of Trustee.                                                                   |   |
|                                                                                                                                                                                                       | Section  6.10 |   | Acceptance  by Successor Trustee.                                                                     |   |
|                                                                                                                                                                                                       | Section  6.11 |   | Succession  by Merger, etc.                                                                           |   |
|                                                                                                                                                                                                       | Section  6.12 |   | Authenticating  Agents.                                                                               |   |
|                                                                                                                                                                                                       |          |   |                                                                                                  |   |
| ARTICLE VII                         CONCERNING  THE SECURITYHOLDERS                |          |
|                                                                                                                                                                                                       |          |   |                                                                                                  |   |
|                                                                                                                                                                                                       | Section  7.01 |   | Action by  Securityholders.                                                                           |   |
|                                                                                                                                                                                                       | Section  7.02 |   | Proof of  Execution by Securityholders.                                                               |   |
|                                                                                                                                                                                                       | Section  7.03 |   | Who Are Deemed  Absolute Owners.                                                                      |   |
|                                                                                                                                                                                                       | Section  7.04 |   | Debt  Securities Owned by Company Deemed Not Outstanding.                                             |   |
|                                                                                                                                                                                                       | Section  7.05 |   | Revocation  of Consents; Future Holders Bound.                                                        |   |
|                                                                                                                                                                                                       |          |   |                                                                                                  |   |
| ARTICLE  VIII                     SECURITYHOLDERS’  MEETINGS                                      |          |
|                                                                                                                                                                                                       |          |   |                                                                                                  |   |
|                                                                                                                                                                                                       | Section  8.01 |   | Purposes of  Meetings.                                                                                |   |
|                                                                                                                                                                                                       | Section  8.02 |   | Call of  Meetings by Trustee.                                                                         |   |
|                                                                                                                                                                                                       | Section  8.03 |   | Call of  Meetings by Company or Securityholders.                                                      |   |
|                                                                                                                                                                                                       | Section  8.04 |   | Qualifications  for Voting.                                                                           |   |
|                                                                                                                                                                                                       | Section  8.05 |   | Regulations.                                                                                          |   |
|                                                                                                                                                                                                       | Section  8.06 |   | Voting.                                                                                               |   |
|                                                                                                                                                                                                       | Section  8.07 |   | Quorum;  Actions.                                                                                     |   |
|                                                                                                                                                                                                       |          |   |                                                                                                  |   |
| ARTICLE IX                            SUPPLEMENTAL  INDENTURES      |          |
|                                                                                                                                                                                                       |          |   |                                                                                                  |   |
|                                                                                                                                                                                                       | Section  9.01 |   | Supplemental  Indentures without Consent of Securityholders.                                          |   |
|                                                                                                                                                                                                       | Section  9.02 |   | Supplemental  Indentures with Consent of Securityholders.                                             |   |
|                                                                                                                                                                                                       | Section  9.03 |   | Effect of  Supplemental Indentures.                                                                   |   |

 

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|                                                                                                                                                                                                                            | Section  9.04  |   | Notation on  Debt Securities.                                                 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|--------|-------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                            | Section  9.05  |   | Evidence of  Compliance of Supplemental Indenture to be Furnished to Trustee. |   |
|                                                                                                                                                                                                                            |           |   |                                                                          |   |
| ARTICLE X                                REDEMPTION  OF SECURITIES   |           |
|                                                                                                                                                                                                                            |           |   |                                                                          |   |
|                                                                                                                                                                                                                            | Section 10.01  |   | Optional  Redemption.                                                         |   |
|                                                                                                                                                                                                                            | Section  10.02 |   | Special  Event Redemption.                                                    |   |
|                                                                                                                                                                                                                            | Section  10.03 |   | Notice of  Redemption; Selection of Debt Securities.                          |   |
|                                                                                                                                                                                                                            | Section  10.04 |   | Payment  of Debt Securities Called for Redemption.                            |   |
|                                                                                                                                                                                                                            |           |   |                                                                          |   |
| ARTICLE XI                            CONSOLIDATION,  MERGER, SALE, CONVEYANCE AND LEASE |           |
|                                                                                                                                                                                                                            |           |   |                                                                          |   |
|                                                                                                                                                                                                                            | Section  11.01 |   | Company  May Consolidate, etc., on Certain Terms.                             |   |
|                                                                                                                                                                                                                            | Section  11.02 |   | Successor  Entity to be Substituted.                                          |   |
|                                                                                                                                                                                                                            | Section  11.03 |   | Opinion  of Counsel to be Given to Trustee.                                   |   |
|                                                                                                                                                                                                                            |           |   |                                                                          |   |
| ARTICLE XII                        SATISFACTION  AND DISCHARGE OF INDENTURE                                  |           |
|                                                                                                                                                                                                                            |           |   |                                                                          |   |
|                                                                                                                                                                                                                            | Section  12.01 |   | Discharge  of Indenture.                                                      |   |
|                                                                                                                                                                                                                            | Section  12.02 |   | Deposited  Moneys to be Held in Trust by Trustee.                             |   |
|                                                                                                                                                                                                                            | Section  12.03 |   | Paying  Agent to Repay Moneys Held.                                           |   |
|                                                                                                                                                                                                                            | Section  12.04 |   | Return of  Unclaimed Moneys.                                                  |   |
|                                                                                                                                                                                                                            |           |   |                                                                          |   |
| ARTICLE  XIII                    IMMUNITY OF  INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS                                |           |
|                                                                                                                                                                                                                            |           |   |                                                                          |   |
|                                                                                                                                                                                                                            | Section  13.01 |   | Indenture  and Debt Securities Solely Corporate Obligations.                  |   |
|                                                                                                                                                                                                                            |           |   |                                                                          |   |
| ARTICLE XIV                    MISCELLANEOUS  PROVISIONS                                                                         |           |
|                                                                                                                                                                                                                            |           |   |                                                                          |   |
|                                                                                                                                                                                                                            | Section  14.01 |   | Successors.                                                                   |   |
|                                                                                                                                                                                                                            | Section  14.02 |   | Official  Acts by Successor Entity.                                           |   |
|                                                                                                                                                                                                                            | Section  14.03 |   | Surrender  of Company Powers.                                                 |   |
|                                                                                                                                                                                                                            | Section  14.04 |   | Addresses  for Notices, etc.                                                  |   |
|                                                                                                                                                                                                                            | Section  14.05 |   | Governing  Law.                                                               |   |
|                                                                                                                                                                                                                            | Section  14.06 |   | Evidence  of Compliance with Conditions Precedent.                            |   |
|                                                                                                                                                                                                                            | Section  14.07 |   | Business  Day Convention.                                                     |   |
|                                                                                                                                                                                                                            | Section  14.08 |   | Table of  Contents, Headings, etc.                                            |   |
|                                                                                                                                                                                                                            | Section  14.09 |   | Execution  in Counterparts.                                                   |   |
|                                                                                                                                                                                                                            | Section  14.10 |   | Separability.                                                                 |   |
|                                                                                                                                                                                                                            | Section  14.11 |   | Assignment.                                                                   |   |
|                                                                                                                                                                                                                            | Section  14.12 |   | Acknowledgment  of Rights.                                                    |   |
|                                                                                                                                                                                                                            |           |   |                                                                          |   |
| ARTICLE XV                        SUBORDINATION  OF DEBT SECURITIES                                          |           |
|                                                                                                                                                                                                                            |           |   |                                                                          |   |
|                                                                                                                                                                                                                            | Section  15.01 |   | Agreement  to Subordinate.                                                    |   |

 

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|     | Section  15.02                                                                                                                                                                                                                          |   | Default  on Senior Indebtedness.                        |   |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|
|     | Section  15.03                                                                                                                                                                                                                          |   | Liquidation;  Dissolution; Bankruptcy.                  |   |
|     | Section  15.04                                                                                                                                                                                                                          |   | Subrogation.                                            |   |
|     | Section  15.05                                                                                                                                                                                                                          |   | Trustee  to Effectuate Subordination.                   |   |
|     | Section  15.06                                                                                                                                                                                                                          |   | Notice by  the Company.                                 |   |
|     | Section  15.07                                                                                                                                                                                                                          |   | Rights of  the Trustee; Holders of Senior Indebtedness. |   |
|     | Section  15.08                                                                                                                                                                                                                          |   | Subordination  May Not Be Impaired.                     |   |
|     |                                                                                                                                                                                                                                    |   |                                                    |   |
| EXHIBITS |                                                                                                                                                                                                                                    |   |                                                    |
|     |                                                                                                                                                                                                                                    |   |                                                    |   |
|     | EXHIBIT  A                                  Form  of Debt Security |   |

 

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THIS INDENTURE, dated as of September 25, 2003,between HF Financial Corp., a savings and loan holding company incorporated inDelaware (hereinafter sometimes called the “Company”), and Wilmington TrustCompany, a Delaware banking corporation, as trustee (hereinafter sometimescalled the “Trustee”).

 

W I T N E S S E T H:

 

WHEREAS, for its lawful corporate purposes, the Company has dulyauthorized the issuance of its Floating Rate Junior Subordinated DebtSecurities due 2033 (the “Debt Securities”) under this Indenture and toprovide, among other things, for the execution and authentication, delivery andadministration thereof, the Company has duly authorized the execution of thisIndenture.

 

NOW, THEREFORE, in consideration of the premises, and the purchase ofthe Debt Securities by the holders thereof, the Company covenants and agreeswith the Trustee for the equal and proportionate benefit of the respectiveholders from time to time of the Debt Securities as follows:

 

# ARTICLE IDEFINITIONS

#  

## Section 1.01                                                        Definitions.

##  

The terms defined in this Section 1.01 (except as herein otherwiseexpressly provided or unless the context otherwise requires) for all purposesof this Indenture and of any indenture supplemental hereto shall have therespective meanings specified in this Section 1.01. All accounting terms usedherein and not expressly defined shall have the meanings assigned to such termsin accordance with generally accepted accounting principles and the term“generally accepted accounting principles” means such accounting principles asare generally accepted in the United States at the time of any computation.  The words “herein,” “hereof” and “hereunder”and other words of similar import refer to this Indenture as a whole and not toany particular Article, Section or other subdivision.

 

“Additional Amounts” has the meaning set forth in Section 3.06.

 

“Additional Provisions” has the meaning set forth in Section 15.01.

 

“Administrative Action” has the meaning specified within the definitionof “Tax Event” in this Section 1.01.

 

“Authenticating Agent” means any agent or agents of the Trustee whichat the time shall be appointed and acting pursuant to Section 6.12.

 

“Bankruptcy Law” means Title 11, U.S. Code, or any similar federal orstate law for the relief of debtors.

 

“Board of Directors” means the board of directors or the executivecommittee or any other duly authorized designated officers of the Company.

 

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“Board Resolution” means a copy of a resolution certified by theSecretary or an Assistant Secretary of the Company to have been duly adopted bythe Board of Directors and to be in full force and effect on the date of suchcertification and delivered to the Trustee.

 

“Business Day” means any day other than a Saturday, Sunday or any otherday on which banking institutions in Wilmington, Delaware, The City of New Yorkor Sioux Falls, South Dakota are permitted or required by law or executiveorder to close.

 

“Calculation Agent” means the Person identified as “Trustee” in thefirst paragraph hereof with respect to the Debt Securities and theInstitutional Trustee with respect to the Trust Securities.

 

“Capital Securities” means undivided beneficial interests in the assetsof the Trust which are designated as “MMCapSSM” and rank *pari passu*with Common Securities issued by the Trust; provided, however,that if an Event of Default (as defined in the Declaration) has occurred and iscontinuing, the rights of holders of such Common Securities to payment inrespect of distributions and payments upon liquidation, redemption andotherwise are subordinated to the rights of holders of such Capital Securities.

 

“Capital Securities Guarantee” means the guarantee agreement that theCompany will enter into with Wilmington Trust Company or other Persons thatoperates directly or indirectly for the benefit of holders of CapitalSecurities of the Trust.

 

“Capital Treatment Event” means, if the Company is organized andexisting under the laws of the United States or any state thereof or theDistrict of Columbia, the receipt by the Company and the Trust of an Opinion ofCounsel experienced in such matters to the effect that, as a result of (a) anyamendment to, or change in, the laws, rules or regulations of the United Statesor any political subdivision thereof or therein, or any rules, guidelines orpolicies of an applicable regulatory authority for the Company or (b) anyofficial or administrative pronouncement or action or decision interpreting orapplying such laws, rules or regulations, which amendment or change iseffective or which pronouncement, action or decision is announced on or afterthe date of original issuance of the Debt Securities, there is more than aninsubstantial risk that the Company will not, within 90 days of the date ofsuch opinion, be entitled to treat an amount equal to the aggregate LiquidationAmount of the Capital Securities as “Tier 1 Capital” (or its then equivalent ifthe Company were subject to such capital requirement) applied as if the Company(or its successors) were a bank holding company for purposes of the capitaladequacy guidelines of the Federal Reserve (or any successor regulatoryauthority with jurisdiction over bank holding companies), or any capitaladequacy guidelines as then in effect and applicable to the Company; provided,however, that the distribution of the Debt Securities in connection withthe liquidation of the Trust by the Company shall not in and of itselfconstitute a Capital Treatment Event unless such liquidation shall haveoccurred in connection with a Tax Event or an Investment Company Event.

 

“Certificate” means a certificate signed by any one of the principalexecutive officer, the principal financial officer or the principal accountingofficer of the Company.

 

“Code” has the meaning set forth in Section 4.03.

 

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“Common Securities” means undivided beneficial interests in the assetsof the Trust which are designated as “Common Securities” and rank *pari passu*with Capital Securities issued by the Trust; provided, however,that if an Event of Default (as defined in the Declaration) has occurred and iscontinuing, the rights of holders of such Common Securities to payment inrespect of distributions and payments upon liquidation, redemption andotherwise are subordinated to the rights of holders of such Capital Securities.

 

“Company” means HF Financial Corp., a savings and loan holding companyincorporated in Delaware, and, subject to the provisions of Article XI, shallinclude its successors and assigns.

 

“Debt Security” or “Debt Securities” has the meaning stated in thefirst recital of this Indenture.

 

“Debt Security Register” has the meaning specified in Section 2.05.

 

“Declaration” means the Amended and Restated Declaration of Trust ofthe Trust, dated as of September 25, 2003, as amended or supplemented fromtime to time.

 

“Default” means any event, act or condition that with notice or lapse oftime, or both, would constitute an Event of Default.

 

“Defaulted Interest” has the meaning set forth in Section 2.08.

 

“Deferred Interest” has the meaning set forth in Section 2.11.

 

“Event of Default” means any event specified in Section 5.01, which hascontinued for the period of time, if any, and after the giving of the notice,if any, therein designated.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Extension Period” has the meaning set forth in Section 2.11.

 

“Federal Reserve” means the Board of Governors of the Federal ReserveSystem.

 

“Indenture” means this Indenture as originally executed or, if amendedor supplemented as herein provided, as so amended or supplemented, or both.

 

“Institutional Trustee” has the meaning set forth in the Declaration.

 

“Interest Payment Date” means January 8th, April 8th,July 8th and October 8th of each year, commencing onJanuary 8, 2004, subject to Section 14.07.

 

“Interest Period” has the meaning set forth in Section 2.08.

 

“Interest Rate” means, with respect to any Interest Period, a per annumrate of interest equal to LIBOR, as determined on the LIBOR Determination Datefor such Interest Period, plus 3.10%; provided, however, that theInterest Rate for any Interest Period may not

 

3

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exceed the highest rate permitted by New York law, asthe same may be modified by United States law of general application.

 

“Investment Company Event” means the receipt by the Company and theTrust of an Opinion of Counsel experienced in such matters to the effect that,as a result of a change in law or regulation or written change ininterpretation or application of law or regulation by any legislative body,court, governmental agency or regulatory authority, there is more than aninsubstantial risk that the Trust is or, within 90 days of the date of suchopinion will be, considered an “investment company” that is required to beregistered under the Investment Company Act of 1940, as amended, which changeor prospective change becomes effective or would become effective, as the casemay be, on or after the date of the original issuance of the Debt Securities.

 

“LIBOR” means the London Interbank Offered Rate for three-month U.S.Dollar deposits in Europe as determined by the Calculation Agent according toSection 2.10(b).

 

“LIBOR Banking Day” has the meaning set forth in Section 2.10(b)(i).

 

“LIBOR Business Day” has the meaning set forth in Section 2.10(b)(i).

 

“LIBOR Determination Date” has the meaning set forth in Section2.10(b)(i).

 

“Liquidation Amount” means the liquidation amount of $1,000 per TrustSecurity.

 

“Maturity Date” means October 8, 2033, subject to Section 14.07.

 

“Officers’ Certificate” means a certificate signed by the Chairman ofthe Board, the Vice Chairman, the President or any Vice President, and by theChief Financial Officer, the Treasurer, an Assistant Treasurer, theComptroller, an Assistant Comptroller, the Secretary or an Assistant Secretaryof the Company, and delivered to the Trustee. Each such certificate shall include the statements provided for inSection 14.06 if and to the extent required by the provisions of such Section.

 

“Opinion of Counsel” means an opinion in writing signed by legalcounsel, who may be an employee of or counsel to the Company or may be othercounsel reasonably satisfactory to the Trustee.  Each such opinion shall include the statements provided for inSection 14.06 if and to the extent required by the provisions of such Section.

 

The term “outstanding,” when used with reference to Debt Securities,subject to the provisions of Section 7.04, means, as of any particular time,all Debt Securities authenticated and delivered by the Trustee or theAuthenticating Agent under this Indenture, except

 

(a)                                  DebtSecurities theretofore canceled by the Trustee or the Authenticating Agent ordelivered to the Trustee for cancellation;

 

(b)                                 DebtSecurities, or portions thereof, for the payment or redemption of which moneysin the necessary amount shall have been deposited in trust with the Trustee orwith any Paying Agent (other than the Company) or shall have been set aside andsegregated in

 

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trust by the Company (if the Company shall act as itsown Paying Agent); provided, that, if such Debt Securities, or portionsthereof, are to be redeemed prior to maturity thereof, notice of suchredemption shall have been given as provided in Articles X and XIV or provisionsatisfactory to the Trustee shall have been made for giving such notice; and

 

(c)                                  DebtSecurities paid pursuant to Section 2.06 or in lieu of or in substitution forwhich other Debt Securities shall have been authenticated and deliveredpursuant to the terms of Section 2.06 unless proof satisfactory to the Companyand the Trustee is presented that any such Debt Securities are held by bonafide holders in due course.

 

“Optional Redemption Date” has the meaning set forth in Section 10.01.

 

“Optional Redemption Price” means an amount in cash equal to 100% ofthe principal amount of the Debt Securities being redeemed plus unpaid interestaccrued on such Debt Securities to the Optional Redemption Date or, in the caseof a redemption due to the occurrence of a Special Event, to the SpecialRedemption Date if the Special Redemption Date is on or after October 8,2008.

 

“OTS” means the Office of Thrift Supervision.

 

“Paying Agent” has the meaning set forth in Section 3.04(e).

 

“Person” means any individual, corporation, limited liability company,partnership, joint venture, association, joint-stock company, trust,unincorporated organization or government or any agency or politicalsubdivision thereof.

 

“Predecessor Security” of any particular Debt Security means everyprevious Debt Security evidencing all or a portion of the same debt as thatevidenced by such particular Debt Security; and, for the purposes of thisdefinition, any Debt Security authenticated and delivered under Section 2.06 inlieu of a lost, destroyed or stolen Debt Security shall be deemed to evidencethe same debt as the lost, destroyed or stolen Debt Security.

 

“Principal Office of the Trustee” means the office of the Trustee atwhich at any particular time its corporate trust business shall be principallyadministered, which at all times shall be located within the United States andat the time of the execution of this Indenture shall be Rodney Square North,1100 North Market Street, Wilmington, DE 19890-0001.

 

“Reference Banks” has the meaning set forth in Section 2.10(b)(ii).

 

“Resale Restriction Termination Date” means, with respect to any DebtSecurity, the date which is the later of (i) two years (or such shorter periodof time as permitted by Rule 144(k) under the Securities Act) after the laterof (y) the date of original issuance of such Debt Security and (z) the lastdate on which the Company or any Affiliate (as defined in Rule 405 under theSecurities Act) of the Company was the holder of such Debt Security (or anypredecessor thereto) and (ii) such later date, if any, as may be required byany subsequent change in applicable law.

 

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“Responsible Officer” means, with respect to the Trustee, any officerwithin the Principal Office of the Trustee with direct responsibility for theadministration of the Indenture, including any vice-president, any assistantvice-president, any secretary, any assistant secretary, the treasurer, anyassistant treasurer, any trust officer or other officer of the Principal Officeof the Trustee customarily performing functions similar to those performed byany of the above designated officers and also means, with respect to aparticular corporate trust matter, any other officer to whom such matter isreferred because of that officer’s knowledge of and familiarity with theparticular subject.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Securityholder,” “holder of Debt Securities” or other similar terms,means any Person in whose name at the time a particular Debt Security isregistered on the Debt Security Register.

 

“Senior Indebtedness” means, with respect to the Company, (i) theprincipal, premium, if any, and interest in respect of (A) indebtedness of theCompany for money borrowed and (B) indebtedness evidenced by securities,debentures, notes, bonds or other similar instruments issued by the Company,(ii) all capital lease obligations of the Company, (iii) all obligations of theCompany issued or assumed as the deferred purchase price of property, allconditional sale obligations of the Company and all obligations of the Companyunder any title retention agreement (but excluding trade accounts payablearising in the ordinary course of business), (iv) all obligations of theCompany for the reimbursement of any letter of credit, any banker’s acceptance,any security purchase facility, any repurchase agreement or similararrangement, any interest rate swap, any other hedging arrangement, anyobligation under options or any similar credit or other transaction, (v) allobligations of the type referred to in clauses (i) through (iv) above of otherPersons for the payment of which the Company is responsible or liable asobligor, guarantor or otherwise and (vi) all obligations of the type referredto in clauses (i) through (v) above of other Persons secured by any lien on anyproperty or asset of the Company (whether or not such obligation is assumed bythe Company), whether incurred on or prior to the date of this Indenture orthereafter incurred, unless, with the prior approval of the OTS if nototherwise generally approved, it is provided in the instrument creating orevidencing the same or pursuant to which the same is outstanding that suchobligations are not superior or are *pari passu* in right of payment to the DebtSecurities; provided, however, that Senior Indebtedness shall notinclude (A) any debt securities issued to any trust other than the Trust (or atrustee of such trust) that is a financing vehicle of the Company (a “financingentity”), in connection with the issuance by such financing entity of equity orother securities in transactions substantially similar in structure to thetransactions contemplated hereunder and in the Declaration or (B) anyguarantees of the Company in respect of the equity or other securities of anyfinancing entity referred to in clause (A) above.

 

“Special Event” means any of a Tax Event, an Investment Company Eventor a Capital Treatment Event.

 

“Special Redemption Date” has the meaning set forth in Section 10.02.

 

6

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“Special Redemption Price” means, with respect to the redemption of anyDebt Security following a Special Event, an amount in cash equal to thepercentage for the principal amount of the Debt Securities that is specifiedbelow for the Special Redemption Date plus unpaid interest accrued thereon tothe Special Redemption Date:

 

 
| **Special Redemption During the 12-Month  Period Beginning October 8,** |   | **Percentage of Principal Amount** |   |
|-------------------------------------------------------------------------|--------|------------------------------------|--------|
| 2003                                                                    |   | 104.40                             | %      |
| 2004                                                                    |   | 103.52                             | %      |
| 2005                                                                    |   | 102.64                             | %      |
| 2006                                                                    |   | 101.76                             | %      |
| 2007                                                                    |   | 100.88                             | %      |
| 2008 and thereafter                                                     |   | 100.00                             | %      |

 

“Subsidiary” means, with respect to any Person, (i) any corporation, atleast a majority of the outstanding voting stock of which is owned, directly orindirectly, by such Person or one or more of its Subsidiaries or by such Personand one or more of its Subsidiaries, (ii) any general partnership, jointventure or similar entity, at least a majority of the outstanding partnershipor similar interests of which shall at the time be owned by such Person or oneor more of its Subsidiaries or by such Person and one or more of itsSubsidiaries, and (iii) any limited partnership of which such Person or any ofits Subsidiaries is a general partner. For the purposes of this definition, “voting stock” means shares,interests, participations or other equivalents in the equity interest (howeverdesignated) in such Person having ordinary voting power for the election of amajority of the directors (or the equivalent) of such Person, other thanshares, interests, participations or other equivalents having such power onlyby reason of the occurrence of a contingency.

 

“Tax Event” means the receipt by the Company and the Trust of anOpinion of Counsel experienced in such matters to the effect that, as a resultof any amendment to or change (including any announced prospective change) inthe laws or any regulations thereunder of the United States or any politicalsubdivision or taxing authority thereof or therein, or as a result of anyofficial administrative pronouncement (including any private letter ruling, technicaladvice memorandum, regulatory procedure, notice or announcement (an“Administrative Action”)) or judicial decision interpreting or applying suchlaws or regulations, regardless of whether such Administrative Action orjudicial decision is issued to or in connection with a proceeding involving theCompany or the Trust and whether or not subject to review or appeal, whichamendment, clarification, change, Administrative Action or decision is enacted,promulgated or announced, in each case on or after the date of originalissuance of the Debt Securities, there is more than an insubstantial risk that:(i) the Trust is, or will be within 90 days of the date of such

 

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opinion, subject to United States federal income taxwith respect to income received or accrued on the Debt Securities; (ii) if theCompany is organized and existing under the laws of the United States or anystate thereof or the District of Columbia interest payable by the Company onthe Debt Securities is not, or within 90 days of the date of such opinion, willnot be, deductible by the Company, in whole or in part, for United Statesfederal income tax purposes; or (iii) the Trust is, or will be within 90 daysof the date of such opinion, subject to or otherwise required to pay, orrequired to withhold from distributions to holders of Trust Securities, morethan a de minimis amount of other taxes (including withholding taxes), duties,assessments or other governmental charges.

 

“Trust” means HF Financial Capital Trust IV, the Delawarestatutory trust, or any other similar trust created for the purpose of issuingCapital Securities in connection with the issuance of Debt Securities underthis Indenture, of which the Company is the sponsor.

 

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amendedfrom time to time, or any successor legislation.

 

“Trust Securities” means Common Securities and Capital Securities ofthe Trust.

 

“Trustee” means the Person identified as “Trustee” in the firstparagraph hereof, and, subject to the provisions of Article VI hereof, shallalso include its successors and assigns as Trustee hereunder.

 

“United States” means the United States of America and the District ofColumbia.

 

“U.S. Person” has the meaning given to United States Person as setforth in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended.

 

# ARTICLE IIDEBT SECURITIES

#  

## Section 2.01                                                        Authenticationand Dating.

##  

Upon the execution and delivery of this Indenture, or from time to timethereafter, Debt Securities in an aggregate principal amount not in excess of$7,217,000 may be executed and delivered by the Company to the Trustee forauthentication, and the Trustee shall thereupon authenticate and make availablefor delivery said Debt Securities to or upon the written order of the Company,signed by its Chairman of the Board of Directors, Vice Chairman, President orChief Financial Officer or one of its Vice Presidents, without any furtheraction by the Company hereunder.  In authenticatingsuch Debt Securities, and accepting the additional responsibilities under thisIndenture in relation to such Debt Securities, the Trustee shall be entitled toreceive, and (subject to Section 6.01) shall be fully protected in relying upona copy of any Board Resolution or Board Resolutions relating thereto and, ifapplicable, an appropriate record of any action taken pursuant to suchresolution, in each case certified by the Secretary or an Assistant Secretaryor other officers with appropriate delegated authority of the Company as thecase may be.

 

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The Trustee shall have the right to decline to authenticate and deliverany Debt Securities under this Section if the Trustee, being advised by counsel,determines that such action may not lawfully be taken or if a ResponsibleOfficer of the Trustee in good faith shall determine that such action wouldexpose the Trustee to personal liability to existing Securityholders.

 

The definitive Debt Securities shall be typed, printed, lithographed orengraved on steel engraved borders or may be produced in any other manner, allas determined by the officers executing such Debt Securities, as evidenced bytheir execution of such Debt Securities.

 

## Section 2.02                                                        Formof Trustee’s Certificate of Authentication.

##  

The Trustee’s certificate of authentication on all Debt Securitiesshall be in substantially the following form:

 

This is one of the Debt Securities referred to in the within-mentionedIndenture.

 
|   | Wilmington Trust  Company,  not in its individual capacity  but solely as trustee |
|--------|-----------------------------------------------------------------------------------|
|   |
|   |                                                                              |
|   |                                                                              |
|   | By:                                                                               |   |   |
|   | Authorized  Officer                                                               |

 

## Section 2.03                                                        Formand Denomination of Debt Securities.

##  

The Debt Securities shall be substantially in the form of Exhibit Ahereto.  The Debt Securities shall be inregistered, certificated form without coupons and in minimum denominations of$100,000 and any multiple of $1,000 in excess thereof.  The Debt Securities shall be numbered,lettered, or otherwise distinguished in such manner or in accordance with suchplans as the officers executing the same may determine with the approval of theTrustee as evidenced by the execution and authentication thereof.

 

## Section 2.04                                                        Executionof Debt Securities.

##  

The Debt Securities shall be signed in the name and on behalf of theCompany by the manual or facsimile signature of its Chairman of the Board ofDirectors, Vice Chairman, President or Chief Financial Officer or one of itsExecutive Vice Presidents, Senior Vice Presidents or Vice Presidents, under itscorporate seal (if legally required) which may be affixed thereto or printed,engraved or otherwise reproduced thereon, by facsimile or otherwise, and whichneed not be attested.  Only such DebtSecurities as shall bear thereon a certificate of authentication substantiallyin the form herein before recited, executed by the Trustee or theAuthenticating Agent by the manual signature of an authorized officer, shall beentitled to the benefits of this Indenture or be valid or obligatory for anypurpose.  Such certificate by theTrustee or the Authenticating Agent upon any Debt Security executed by theCompany shall be conclusive evidence that the Debt Security so authenticatedhas been duly authenticated and delivered hereunder and that the holder isentitled to the benefits of this Indenture.

 

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In case any officer of the Company who shall have signed any of theDebt Securities shall cease to be such officer before the Debt Securities sosigned shall have been authenticated and delivered by the Trustee or theAuthenticating Agent, or disposed of by the Company, such Debt Securitiesnevertheless may be authenticated and delivered or disposed of as though thePerson who signed such Debt Securities had not ceased to be such officer of theCompany; and any Debt Security may be signed on behalf of the Company by suchPersons as, at the actual date of the execution of such Debt Security, shall bethe proper officers of the Company, although at the date of the execution of thisIndenture any such person was not such an officer.

 

Every Debt Security shall be dated the date of its authentication.

 

## Section 2.05                                                        Exchangeand Registration of Transfer of Debt Securities.

##  

The Company shall cause to be kept, at the office or agency maintainedfor the purpose of registration of transfer and for exchange as provided inSection 3.02, a register (the “Debt Security Register”) for the Debt Securitiesissued hereunder in which, subject to such reasonable regulations as it mayprescribe, the Company shall provide for the registration and transfer of allDebt Securities as provided in this Article II.  Such register shall be in written form or in any other formcapable of being converted into written form within a reasonable time.

 

Debt Securities to be exchanged may be surrendered at the PrincipalOffice of the Trustee or at any office or agency to be maintained by theCompany for such purpose as provided in Section 3.02, and the Company shallexecute, the Company or the Trustee shall register and the Trustee or theAuthenticating Agent shall authenticate and make available for delivery inexchange therefor, the Debt Security or Debt Securities which theSecurityholder making the exchange shall be entitled to receive.  Upon due presentment for registration oftransfer of any Debt Security at the Principal Office of the Trustee or at anyoffice or agency of the Company maintained for such purpose as provided inSection 3.02, the Company shall execute, the Company or the Trustee shallregister and the Trustee or the Authenticating Agent shall authenticate andmake available for delivery in the name of the transferee or transferees, a newDebt Security for a like aggregate principal amount. Registration orregistration of transfer of any Debt Security by the Trustee or by any agent ofthe Company appointed pursuant to Section 3.02, and delivery of such DebtSecurity, shall be deemed to complete the registration or registration oftransfer of such Debt Security.

 

All Debt Securities presented for registration of transfer or forexchange or payment shall (if so required by the Company or the Trustee or theAuthenticating Agent) be duly endorsed by, or be accompanied by, a writteninstrument or instruments of transfer in form satisfactory to the Company andeither the Trustee or the Authenticating Agent duly executed by, the holder orsuch holder’s attorney duly authorized in writing.

 

No service charge shall be made for any exchange or registration oftransfer of Debt Securities, but the Company or the Trustee may require paymentof a sum sufficient to cover any tax, fee or other governmental charge that maybe imposed in connection therewith other than exchanges pursuant to Section2.07, Section 9.04 or Section 10.04 not involving any transfer.

 

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The Company or the Trustee shall not be required to exchange orregister a transfer of any Debt Security for a period of 15 days immediatelypreceding the date of selection of Debt Securities for redemption.

 

Notwithstanding the foregoing, Debt Securities may not be transferredprior to the Resale Restriction Termination Date except in compliance with thelegend set forth below, unless otherwise determined by the Company inaccordance with applicable law, which legend shall be placed on each DebtSecurity:

 

**THISSECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLESECURITIES LAWS.  NEITHER THIS SECURITYNOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OFSUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.  THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATIONHEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES TOOFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST ORPARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO YEARS (ORSUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) OF THE SECURITIES ACT)AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE LASTDATE ON WHICH THE COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THESECURITIES ACT) OF THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH INTERESTOR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE, IF ANY,AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO THECOMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO APERSON THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER”, ASDEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OFA QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER ISBEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION FROM THEREGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN “ACCREDITED INVESTOR”WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3), (7) OR (8) OF RULE 501UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR SUCH INTEREST ORPARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN ACCREDITEDINVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALEIN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (D)PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR OUTSIDE THE UNITEDSTATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT****OR (E)PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OFTHE SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER,SALE**

 

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**ORTRANSFER PURSUANT TO CLAUSE (C), (D) OR (E) ABOVE TO REQUIRE THE DELIVERY OF ANOPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO ITIN ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THECOMPANY.  THE HOLDER OF THIS SECURITY ORANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, ASTHE CASE MAY BE, AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.**

 

**THEHOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITSACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, ALSO AGREES, REPRESENTS ANDWARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OROTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOMESECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNALREVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN ENTITYWHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’SINVESTMENT IN THE ENTITY AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAYACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, UNLESSSUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDERU.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60,91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE ANDHOLDING OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BYSECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASEOR HOLDING.  ANY PURCHASER OR HOLDER OFTHIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN WILL BE DEEMED TO HAVEREPRESENTED BY ITS PURCHASE AND HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE,THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OFSECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE,A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN,OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN ORPLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE AND HOLDING WILL NOTRESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVEEXEMPTION.**

 

**INCONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER TO THEREGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BEREQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THEFOREGOING RESTRICTIONS.**

 

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**THISSECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF$100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF.  ANY ATTEMPTED TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESSTHAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANYSUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITYOR ANY INTEREST OR PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT NOTLIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST ORPARTICIPATION, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NOINTEREST WHATSOEVER IN THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.**

 

## Section 2.06                                                        Mutilated,Destroyed, Lost or Stolen Debt Securities.

##  

In case any Debt Security shall become mutilated or be destroyed, lostor stolen, the Company shall execute, and upon its written request the Trusteeshall authenticate and deliver, a new Debt Security bearing a number notcontemporaneously outstanding, in exchange and substitution for the mutilatedDebt Security, or in lieu of and in substitution for the Debt Security sodestroyed, lost or stolen.  In everycase the applicant for a substituted Debt Security shall furnish to the Companyand the Trustee such security or indemnity as may be required by them to saveeach of them harmless, and, in every case of destruction, loss or theft, theapplicant shall also furnish to the Company and the Trustee evidence to theirsatisfaction of the destruction, loss or theft of such Debt Security and of theownership thereof.

 

The Trustee may authenticate any such substituted Debt Security anddeliver the same upon the written request or authorization of any officer ofthe Company.  Upon the issuance of anysubstituted Debt Security, the Company may require the payment of a sumsufficient to cover any tax or other governmental charge that may be imposed inrelation thereto and any other expenses connected therewith.  In case any Debt Security which has maturedor is about to mature or has been called for redemption in full shall becomemutilated or be destroyed, lost or stolen, the Company may, instead of issuinga substitute Debt Security, pay or authorize the payment of the same (withoutsurrender thereof except in the case of a mutilated Debt Security) if theapplicant for such payment shall furnish to the Company and the Trustee suchsecurity or indemnity as may be required by them to save each of them harmlessand, in case of destruction, loss or theft, evidence satisfactory to theCompany and to the Trustee of the destruction, loss or theft of such Security andof the ownership thereof.

 

Every substituted Debt Security issued pursuant to the provisions ofthis Section 2.06 by virtue of the fact that any such Debt Security isdestroyed, lost or stolen shall constitute an additional contractual obligationof the Company, whether or not the destroyed, lost or stolen Debt Securityshall be found at any time, and shall be entitled to all the benefits of thisIndenture equally and proportionately with any and all other Debt Securitiesduly issued hereunder.  All DebtSecurities shall be held and owned upon the express condition that, to theextent permitted by applicable law, the foregoing provisions are exclusive withrespect to the replacement or payment of mutilated, destroyed, lost or stolenDebt Securities and shall preclude any and all other rights or remediesnotwithstanding any law or statute existing or hereafter enacted to the

 

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contrary with respect to the replacement or payment ofnegotiable instruments or other securities without their surrender.

 

## Section 2.07                                                        TemporaryDebt Securities.

##  

Pending the preparation of definitive Debt Securities, the Company mayexecute and the Trustee shall authenticate and make available for deliverytemporary Debt Securities that are typed, printed or lithographed. TemporaryDebt Securities shall be issuable in any authorized denomination, andsubstantially in the form of the definitive Debt Securities but with suchomissions, insertions and variations as may be appropriate for temporary DebtSecurities, all as may be determined by the Company.  Every such temporary Debt Security shall be executed by theCompany and be authenticated by the Trustee upon the same conditions and insubstantially the same manner, and with the same effect, as the definitive DebtSecurities.  Without unreasonable delay,the Company will execute and deliver to the Trustee or the Authenticating Agentdefinitive Debt Securities and thereupon any or all temporary Debt Securitiesmay be surrendered in exchange therefor, at the Principal Office of the Trusteeor at any office or agency maintained by the Company for such purpose asprovided in Section 3.02, and the Trustee or the Authenticating Agent shallauthenticate and make available for delivery in exchange for such temporaryDebt Securities a like aggregate principal amount of such definitive DebtSecurities.  Such exchange shall be madeby the Company at its own expense and without any charge therefor except thatin case of any such exchange involving a registration of transfer the Companymay require payment of a sum sufficient to cover any tax, fee or othergovernmental charge that may be imposed in relation thereto.  Until so exchanged, the temporary Debt Securitiesshall in all respects be entitled to the same benefits under this Indenture asdefinitive Debt Securities authenticated and delivered hereunder.

 

## Section 2.08                                                        Paymentof Interest.

##  

Each Debt Security will bear interest at the then applicable InterestRate (i) in the case of the initial Interest Period, for the period from, andincluding, the date of original issuance of such Debt Security to, butexcluding, the initial Interest Payment Date and (ii) thereafter, for theperiod from, and including, the first day following the end of the precedingInterest Period to, but excluding, the applicable Interest Payment Date or, inthe case of the last Interest Period, the related Optional Redemption Date,Special Redemption Date or Maturity Date, as applicable (each such period, an“Interest Period”), on the principal thereof, on any overdue principal and (tothe extent that payment of such interest is enforceable under applicable law)on Deferred Interest and on any overdue installment of interest (includingDefaulted Interest), payable (subject to the provisions of Article XII) on eachInterest Payment Date.  Interest and anyDeferred Interest on any Debt Security that is payable, and is punctually paidor duly provided for by the Company, on any Interest Payment Date shall be paidto the Person in whose name such Debt Security (or one or more PredecessorSecurities) is registered at the close of business on the regular record datefor such interest installment, except that interest and any Deferred Interestpayable on the Maturity Date, any Optional Redemption Date or the SpecialRedemption Date, as the case may be, shall be paid to the Person to whomprincipal is paid.  In case (i) theMaturity Date of any Debt Security or (ii) any Debt Security or portionthereof is called for redemption and the related Optional Redemption Date orthe Special Redemption Date, as the case may be, is subsequent to the regularrecord date with respect to any Interest Payment Date

 

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and either on or prior to such Interest Payment Date,interest on such Debt Security will be paid upon presentation and surrender ofsuch Debt Security.

 

Any interest on any Debt Security, other than Deferred Interest, thatis payable, but is not punctually paid or duly provided for by the Company, onany Interest Payment Date (herein called “Defaulted Interest”) shall forthwithcease to be payable to the holder on the relevant regular record date by virtueof having been such holder, and such Defaulted Interest shall be paid by theCompany to the Persons in whose names such Debt Securities (or their respectivePredecessor Securities) are registered at the close of business on a specialrecord date for the payment of such Defaulted Interest, which shall be fixed inthe following manner:  the Company shallnotify the Trustee in writing of the amount of Defaulted Interest proposed tobe paid on each such Debt Security and the date of the proposed payment, and atthe same time the Company shall deposit with the Trustee an amount of moneyequal to the aggregate amount proposed to be paid in respect of such DefaultedInterest or shall make arrangements reasonably satisfactory to the Trustee forsuch deposit prior to the date of the proposed payment, such money whendeposited to be held in trust for the benefit of the Persons entitled to suchDefaulted Interest as provided in this paragraph.  Thereupon the Trustee shall fix a special record date for thepayment of such Defaulted Interest, which shall not be more than fifteen norless than ten days prior to the date of the proposed payment and not less thanten days after the receipt by the Trustee of the notice of the proposedpayment.  The Trustee shall promptlynotify the Company of such special record date and, in the name and at theexpense of the Company, shall cause notice of the proposed payment of suchDefaulted Interest and the special record date therefor to be mailed, firstclass postage prepaid, to each Securityholder at his or her address as itappears in the Debt Security Register, not less than ten days prior to suchspecial record date.  Notice of theproposed payment of such Defaulted Interest and the special record datetherefor having been mailed as aforesaid, such Defaulted Interest shall be paidto the Persons in whose names such Debt Securities (or their respectivePredecessor Securities) are registered on such special record date and thereafter the Company shall have nofurther payment obligation in respect of the Defaulted Interest.

 

Any interest scheduled to become payable on an Interest Payment Dateoccurring during an Extension Period shall not be Defaulted Interest and shallbe payable on such other date as may be specified in the terms of such DebtSecurities.

 

The term “regular record date”, as used in this Section, shall mean thefifteenth day prior to the applicable Interest Payment Date, whether or notsuch day is a Business Day.

 

Subject to the foregoing provisions of this Section, each Debt Securitydelivered under this Indenture upon registration of transfer of or in exchangefor or in lieu of any other Debt Security shall carry the rights to interestaccrued and unpaid, and to accrue, that were carried by such other DebtSecurity.

 

## Section 2.09                                                        Cancellationof Debt Securities Paid, etc.

##  

All Debt Securities surrendered for the purpose of payment, redemption,exchange or registration of transfer, shall, if surrendered to the Company orany Paying Agent, be surrendered to the Trustee and promptly canceled by it,or, if surrendered to the Trustee or

 

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any Authenticating Agent, shall be promptly canceledby it, and no Debt Securities shall be issued in lieu thereof except asexpressly permitted by any of the provisions of this Indenture.  All Debt Securities canceled by any AuthenticatingAgent shall be delivered to the Trustee. The Trustee shall destroy all canceled Debt Securities unless theCompany otherwise directs the Trustee in writing, in which case the Trusteeshall dispose of such Debt Securities as directed by the Company.  If the Company shall acquire any of the DebtSecurities, however, such acquisition shall not operate as a redemption orsatisfaction of the indebtedness represented by such Debt Securities unless anduntil the same are surrendered to the Trustee for cancellation.

 

## Section 2.10                                                        Computationof Interest.

##  

### (a)                                  Theamount of interest payable for any Interest Period will be computed on thebasis of a 360-day year and the actual number of days elapsed in such InterestPeriod.

###  

### (b)                                 LIBORshall be determined by the Calculation Agent for each Interest Period inaccordance with the following provisions:

###  

#### (i)                                     Onthe second LIBOR Business Day (provided, that on such day commercial banks areopen for business (including dealings in foreign currency deposits) in London(a “LIBOR Banking Day”), and otherwise the next preceding LIBOR Business Daythat is also a LIBOR Banking Day) prior to the January 15th,April 15th, July 15th and October 15th,as the case may be, immediately succeeding the commencement of such InterestPeriod (or, in the case of the first Interest Period, on September 23, 2003)(each such day, a “LIBOR Determination Date”), LIBOR shall equal the rate, asobtained by the Calculation Agent, for three-month U.S. Dollar deposits inEurope, which appears on Telerate (as defined in the International Swaps andDerivatives Association, Inc. 2000 Interest Rate and Currency ExchangeDefinitions) page 3750 or such other page as may replace such page 3750, as of11:00 a.m. (London time) on such LIBOR Determination Date, as reported byBloomberg Financial Markets Commodities News or any successor service(“Telerate Page 3750”).  “LIBOR BusinessDay” means any day that is not a Saturday, Sunday or other day on whichcommercial banking institutions in The City of New York or Wilmington, Delawareare authorized or obligated by law or executive order to be closed.  If such rate is superseded on Telerate Page3750 by a corrected rate before 12:00 noon (London time) on such LIBOR DeterminationDate, the corrected rate as so substituted will be LIBOR for such LIBORDetermination Date.

####  

#### (ii)                                  If,on such LIBOR Determination Date, such rate does not appear on Telerate Page3750, the Calculation Agent shall determine the arithmetic mean of the offeredquotations of the Reference Banks to leading banks in the London interbankmarket for three-month U.S. Dollar deposits in Europe (in an amount determinedby the Calculation Agent) by reference to requests for quotations as ofapproximately 11:00 a.m. (London time) on such LIBOR Determination Date made bythe Calculation Agent to the Reference Banks. If, on such LIBOR Determination Date, at least two of the ReferenceBanks provide such quotations, LIBOR shall equal the arithmetic mean of such quotations.  If, on such LIBOR Determination Date, onlyone or none of the Reference Banks provide such a quotation, LIBOR shall bedeemed to be the arithmetic mean of the offered quotations that at least twoleading banks in The City of New York (as selected

 

16

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####  

#### by the CalculationAgent) are quoting on such LIBOR Determination Date for three-month U.S. Dollardeposits in Europe at approximately 11:00 a.m. (London time) (in an amountdetermined by the Calculation Agent). As used herein, “Reference Banks” meansfour major banks in the London interbank market selected by the CalculationAgent.

####  

#### (iii)                               Ifthe Calculation Agent is required but is unable to determine a rate inaccordance with at least one of the procedures provided above, LIBOR for such InterestPeriod shall be LIBOR in effect for the immediately preceding Interest Period.

####  

### (c)                                  Allpercentages resulting from any calculations on the Debt Securities will berounded, if necessary, to the nearest one hundred-thousandth of a percentagepoint, with five one-millionths of a percentage point rounded upward (e.g.,9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and alldollar amounts used in or resulting from such calculation will be rounded tothe nearest cent (with one-half cent being rounded upward).

###  

### (d)                                 Oneach LIBOR Determination Date, the Calculation Agent shall notify, in writing,the Company and the Paying Agent of the applicable Interest Rate that appliesto the related Interest Period.  TheCalculation Agent shall, upon the request of a holder of any Debt Securities,inform such holder of the Interest Rate that applies to the related InterestPeriod.  All calculations made by theCalculation Agent in the absence of manifest error shall be conclusive for allpurposes and binding on the Company and the holders of the DebtSecurities.  The Paying Agent shall beentitled to rely on information received from the Calculation Agent or theCompany as to the applicable Interest Rate. The Company shall, from time to time, provide any necessary informationto the Paying Agent relating to any original issue discount and interest on theDebt Securities that is included in any payment and reportable for taxableincome calculation purposes.

###  

## Section 2.11                                                        Extensionof Interest Payment Period.

##  

So long as no Event of Default has occurred and is continuing, theCompany shall have the right, from time to time and without causing an Event ofDefault, to defer payments of interest on the Debt Securities by extending theinterest payment period on the Debt Securities at any time and from time totime during the term of the Debt Securities, for up to 20 consecutive quarterlyperiods (each such extended interest payment period, together with all previousand further consecutive extensions thereof, is referred to herein as an“Extension Period”).  No ExtensionPeriod may end on a date other than an Interest Payment Date or extend beyondthe Maturity Date, any Optional Redemption Date or the Special Redemption Date,as the case may be.  During any ExtensionPeriod, interest will continue to accrue on the Debt Securities, and intereston such accrued interest (such accrued interest and interest thereon referredto herein as “Deferred Interest”) will accrue at an annual rate equal to theInterest Rate applicable during such Extension Period, compounded quarterlyfrom the date such Deferred Interest would have been payable were it not forthe Extension Period, to the extent permitted by applicable law.  No interest or Deferred Interest (except anyAdditional Amounts that may be due and payable) shall be due and payable duringan Extension Period, except at the end thereof.  At the end of any Extension Period, the Company shall pay allDeferred Interest then accrued and unpaid on the Debt Securities; provided,however, that during any Extension Period, the Company shall be subjectto the restrictions set forth in Section 3.08. Prior to the termination of any Extension

 

17

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Period, the Company may further extend such Extension Period, provided,that no Extension Period (including all previous and further consecutiveextensions that are part of such Extension Period) shall exceed 20 consecutivequarterly periods.  Upon the terminationof any Extension Period and upon the payment of all Deferred Interest, theCompany may commence a new Extension Period, subject to the foregoingrequirements.  The Company must give theTrustee notice of its election to begin or extend an Extension Period at leastone Business Day prior to the earlier of (i) the next succeeding date on whichinterest on the Debt Securities would have been payable except for the electionto begin or extend an Extension Period or (ii) the date such interest ispayable, but in any event not later than the related regular record date.  The Trustee shall give notice of theCompany’s election to begin or extend an Extension Period to theSecurityholders.

 

## Section 2.12                                                        CUSIPNumbers.

##  

The Company in issuing the Debt Securities may use a “CUSIP” number (ifthen generally in use), and, if so, the Trustee shall use a “CUSIP” number innotices of redemption as a convenience to Securityholders; provided,that any such notice may state that no representation is made as to thecorrectness of such number either as printed on the Debt Securities or ascontained in any notice of a redemption and that reliance may be placed only onthe other identification numbers printed on the Debt Securities, and any suchredemption shall not be affected by any defect in or omission of suchnumbers.  The Company will promptlynotify the Trustee in writing of any change in the CUSIP number.

 

# ARTICLE IIIPARTICULAR COVENANTS OF THE COMPANY

#  

## Section 3.01                                                        Paymentof Principal, Premium and Interest; Agreed Treatment of the Debt Securities.

##  

### (a)                                  TheCompany covenants and agrees that it will duly and punctually pay or cause tobe paid all payments due in respect of the Debt Securities at the place, at therespective times and in the manner provided in this Indenture and the DebtSecurities.  Payment of the principal ofand premium, if any, and interest on the Debt Securities due on the MaturityDate, any Optional Redemption Date or the Special Redemption Date, as the casemay be, will be made by the Company in immediately available funds againstpresentation and surrender of such Debt Securities.  At the option of the Company, each installment of interest on theDebt Securities due on an Interest Payment Date other than the Maturity Date,any Optional Redemption Date or the Special Redemption Date, as the case maybe, may be paid (i) by mailing checks for such interest payable to the order ofthe holders of Debt Securities entitled thereto as they appear on the DebtSecurity Register or (ii) by wire transfer of immediately available funds toany account with a banking institution located in the United States designatedby such holders to the Paying Agent no later than the related record date.  Notwithstanding anything to the contrarycontained in this Indenture or any Debt Security, if the Trust or the trusteeof the Trust is the holder of any Debt Security, then all payments in respectof such Debt Security shall be made by the Company in immediately availablefunds when due.

 

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### (b)                                 TheCompany will treat the Debt Securities as indebtedness, and the interestpayable in respect of such Debt Securities as interest, for all U.S. federalincome tax purposes.  All payments inrespect of such Debt Securities will be made free and clear of U.S. withholdingtax to any beneficial owner thereof that has provided an Internal RevenueService Form W-8 BEN (or any substitute or successor form) establishing itsnon-U.S. status for U.S. federal income tax purposes.

###  

### (c)                                  Asof the date of this Indenture, the Company represents that it has no intentionto exercise its right under Section 2.11 to defer payments of interest on theDebt Securities by commencing an Extension Period.

###  

### (d)                                 Asof the date of this Indenture, the Company represents that the likelihood thatit would exercise its right under Section 2.11 to defer payments of interest onthe Debt Securities by commencing an Extension Period at any time during whichthe Debt Securities are outstanding is remote because of the restrictions thatwould be imposed on the Company’s ability to declare or pay dividends ordistributions on, or to redeem, purchase or make a liquidation payment withrespect to, any of its outstanding equity and on the Company’s ability to makeany payments of principal of or premium, if any, or interest on, or repurchaseor redeem, any of its debt securities that rank *pari passu* in all respectswith or junior in interest to the Debt Securities.

###  

## Section 3.02                                                        Officesfor Notices and Payments, etc.

##  

So long as any of the Debt Securities remain outstanding, the Companywill maintain in Wilmington, Delaware or in Sioux Falls an office or agencywhere the Debt Securities may be presented for payment, an office or agencywhere the Debt Securities may be presented for registration of transfer and forexchange as provided in this Indenture and an office or agency where noticesand demands to or upon the Company in respect of the Debt Securities or of thisIndenture may be served.  The Companywill give to the Trustee written notice of the location of any such office oragency and of any change of location thereof. Until otherwise designated from time to time by the Company in a noticeto the Trustee, or specified as contemplated by Section 2.05, such office oragency for all of the above purposes shall be the Principal Office of theTrustee.  In case the Company shall failto maintain any such office or agency in Wilmington, Delaware or in SiouxFalls, or shall fail to give such notice of the location or of any change inthe location thereof, presentations and demands may be made and notices may beserved at the Principal Office of the Trustee.

 

In addition to any such office or agency, the Company may from time totime designate one or more offices or agencies outside Wilmington, Delaware orSioux Falls where the Debt Securities may be presented for registration oftransfer and for exchange in the manner provided in this Indenture, and theCompany may from time to time rescind such designation, as the Company may deemdesirable or expedient; provided, however, that no suchdesignation or rescission shall in any manner relieve the Company of itsobligation to maintain any such office or agency in Wilmington, Delaware or inSioux Falls for the purposes above mentioned. The Company will give to the Trustee prompt written notice of any suchdesignation or rescission thereof.

 

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## Section 3.03                                                        Appointmentsto Fill Vacancies in Trustee’s Office.

##  

The Company, whenever necessary to avoid or fill a vacancy in the officeof Trustee, will appoint, in the manner provided in Section 6.09, a Trustee, sothat there shall at all times be a Trustee hereunder.

 

## Section 3.04                                                        Provisionas to Paying Agent.

##  

### (a)                                  Ifthe Company shall appoint a Paying Agent other than the Trustee, it will causesuch Paying Agent to execute and deliver to the Trustee an instrument in whichsuch agent shall agree with the Trustee, subject to the provision of thisSection 3.04,

###  

#### (i)                                     thatit will hold all sums held by it as such agent for the payment of all paymentsdue on the Debt Securities (whether such sums have been paid to it by theCompany or by any other obligor on the Debt Securities) in trust for thebenefit of the holders of the Debt Securities;

####  

#### (ii)                                  thatit will give the Trustee prompt written notice of any failure by the Company(or by any other obligor on the Debt Securities) to make any payment on  the Debt Securities when the same shall bedue and payable; and

####  

#### (iii)                               thatit will, at any time during the continuance of any Event of Default, upon thewritten request of the Trustee, forthwith pay to the Trustee all sums so heldin trust by such Paying Agent.

####  

### (b)                                 Ifthe Company shall act as its own Paying Agent, it will, on or before each duedate of the payments due on the Debt Securities, set aside, segregate and holdin trust for the benefit of the holders of the Debt Securities a sum sufficientto make such payments so becoming due and will notify the Trustee in writing ofany failure to take such action and of any failure by the Company (or by anyother obligor under the Debt Securities) to make any payment on the DebtSecurities when the same shall become due and payable.

###  

Whenever the Company shall have one or more Paying Agents for the DebtSecurities, it will, on or prior to each due date of the payments on the DebtSecurities, deposit with a Paying Agent a sum sufficient to pay all payments sobecoming due, such sum to be held in trust for the benefit of the Personsentitled thereto and (unless such Paying Agent is the Trustee) the Companyshall promptly notify the Trustee in writing of its action or failure to act.

 

### (c)                                  Anythingin this Section 3.04 to the contrary notwithstanding, the Company may, at anytime, for the purpose of obtaining a satisfaction and discharge with respect tothe Debt Securities, or for any other reason, pay, or direct any Paying Agentto pay, to the Trustee all sums held in trust by the Company or any such PayingAgent, such sums to be held by the Trustee upon the same terms and conditionsherein contained.

###  

### (d)                                 Anythingin this Section 3.04 to the contrary notwithstanding, the agreement to holdsums in trust as provided in this Section 3.04 is subject to Sections 12.03 and12.04.

 

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### (e)                                  TheCompany hereby initially appoints the Trustee to act as paying agent for theDebt Securities (the “Paying Agent”).

###  

## Section 3.05                                                        Certificateto Trustee.

##  

The Company will deliver to the Trustee on or before 120 days after theend of each fiscal year, so long as Debt Securities are outstanding hereunder,a Certificate stating that in the course of the performance by the signers oftheir duties as officers of the Company they would normally have knowledge ofany default by the Company in the performance of any covenants of the Companycontained herein, stating whether or not they have knowledge of any suchdefault and, if so, specifying each such default of which the signers haveknowledge and the nature thereof.

 

## Section 3.06                                                        AdditionalAmounts.

##  

If and for so long as the Trust is the holder of all Debt Securitiesand is subject to or otherwise required to pay (or is required to withhold fromdistributions to holders of Trust Securities) any additional taxes (includingwithholding taxes), duties, assessments or other governmental charges as aresult of a Tax Event, the Company will pay such additional amounts (the“Additional Amounts”) on the Debt Securities or the Trust Securities, as thecase may be, as shall be required so that the net amounts received and retainedby the holders of Debt Securities or Trust Securities, as the case may be,after payment of all taxes (including withholding taxes), duties, assessmentsor other governmental charges, will be equal to the amounts that such holderswould have received and retained had no such taxes (including withholdingtaxes), duties, assessments or other governmental charges been imposed.

 

Whenever in this Indenture or the Debt Securities there is a referencein any context to the payment of principal of or premium, if any, or intereston the Debt Securities, such mention shall be deemed to include mention ofpayments of the Additional Amounts provided for in this Section to the extentthat, in such context, Additional Amounts are, were or would be payable inrespect thereof pursuant to the provisions of this Section and express mentionof the payment of Additional Amounts (if applicable) in any provisions hereofshall not be construed as excluding Additional Amounts in those provisionshereof where such express mention is not made, provided, however,that, notwithstanding anything to the contrary contained in this Indenture orany Debt Security, the deferral of the payment of interest during an ExtensionPeriod pursuant to Section 2.11 shall not defer the payment of any AdditionalAmounts that may be due and payable.

 

## Section 3.07                                                        Compliancewith Consolidation Provisions.

##  

The Company will not, while any of the Debt Securities remainoutstanding, consolidate with, or merge into, any other Person, or merge intoitself, or sell, convey, transfer or otherwise dispose of all or substantiallyall of its property or capital stock to any other Person unless the provisionsof Article XI hereof are complied with.

 

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## Section 3.08                                                        Limitationon Dividends.

##  

If (i) there shall have occurred and be continuing an Event of Default,(ii) the Company shall be in default with respect to its payment of anyobligations under the Capital Securities Guarantee or (iii) the Company shallhave given notice of its election to defer payments of interest on the DebtSecurities by extending the interest payment period as provided herein and suchperiod, or any extension thereof, shall have commenced and be continuing, thenthe Company may not (A) declare or pay any dividends or distributions on, orredeem, purchase, acquire, or make a liquidation payment with respect to, anyof the Company’s capital stock, (B) make any payment of principal of orpremium, if any, or interest on or repay, repurchase or redeem any debt securitiesof the Company that rank *pari passu*in all respects with or juniorin interest to the Debt Securities or (C) make any payment under any guaranteesof the Company that rank *pari passu*in all respects with or juniorin interest to the Capital Securities Guarantee (other than (a) repurchases,redemptions or other acquisitions of shares of capital stock of the Company (I)in connection with any employment contract, benefit plan or other similararrangement with or for the benefit of one or more employees, officers,directors or consultants, (II) in connection with a dividend reinvestment orstockholder stock purchase plan or (III) in connection with the issuance ofcapital stock of the Company (or securities convertible into or exercisable forsuch capital stock) as consideration in an acquisition transaction entered intoprior to the occurrence of (i), (ii) or (iii) above, (b) as a result of anyexchange or conversion of any class or series of the Company’s capital stock(or any capital stock of a subsidiary of the Company) for any class or seriesof the Company’s capital stock or of any class or series of the Company’sindebtedness for any class or series of the Company’s capital stock, (c) thepurchase of fractional interests in shares of the Company’s capital stockpursuant to the conversion or exchange provisions of such capital stock or thesecurity being converted or exchanged, (d) 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 (e) any dividend in the form of stock,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 3.09                                                        Covenantsas to the Trust.

##  

For so long as such Trust Securities remain outstanding, the Companyshall maintain 100% ownership of the Common Securities; provided, however,that any permitted successor of the Company under this Indenture may succeed tothe Company’s ownership of such Common Securities.  The Company, as owner of the Common Securities, shall usecommercially reasonable efforts to cause the Trust (a) to remain a statutorytrust, except in connection with a distribution of Debt Securities to theholders of Trust Securities in liquidation of the Trust, the redemption of allof the Trust Securities or mergers, consolidations or amalgamations, each aspermitted by the Declaration, (b) to otherwise continue to be classified as agrantor trust for United States federal income tax purposes and (c) to causeeach holder of Trust Securities to be treated as owning an undivided beneficialinterest in the Debt Securities.

 

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# ARTICLE IVLISTS

#  

## Section 4.01                                                        Securityholders’Lists.

##  

The Company covenants and agrees that it will furnish or cause to befurnished to the Trustee:

 

### (a)                                  oneach regular record date for an Interest Payment Date, a list, in such form asthe Trustee may reasonably require, of the names and addresses of theSecurityholders of the Debt Securities as of such record date; and

###  

### (b)                                 atsuch other times as the Trustee may request in writing, within 30 days afterthe receipt by the Company of any such request, a list of similar form andcontent as of a date not more than 15 days prior to the time such list isfurnished; except that no such lists need be furnished under this Section 4.01so long as the Trustee is in possession thereof by reason of its acting as DebtSecurity registrar.

###  

## Section 4.02                                                        Preservationand Disclosure of Lists.

##  

### (a)                                  TheTrustee shall preserve, in as current a form as is reasonably practicable, allinformation as to the names and addresses of the holders of Debt Securities (1)contained in the most recent list furnished to it as provided in Section 4.01or (2) received by it in the capacity of Debt Securities registrar (if soacting) hereunder.  The Trustee maydestroy any list furnished to it as provided in Section 4.01 upon receipt of anew list so furnished.

###  

### (b)                                 Incase three or more holders of Debt Securities (hereinafter referred to as“applicants”) apply in writing to the Trustee and furnish to the Trusteereasonable proof that each such applicant has owned a Debt Security for aperiod of at least six months preceding the date of such application, and suchapplication states that the applicants desire to communicate with other holdersof Debt Securities with respect to their rights under this Indenture or undersuch Debt Securities and is accompanied by a copy of the form of proxy or othercommunication which such applicants propose to transmit, then the Trustee shallwithin five Business Days after the receipt of such application, at itselection, either:

###  

#### (i)                                     affordsuch applicants access to the information preserved at the time by the Trusteein accordance with the provisions of subsection (a) of this Section 4.02, or

####  

#### (ii)                                  informsuch applicants as to the approximate number of holders of Debt Securitieswhose names and addresses appear in the information preserved at the time bythe Trustee in accordance with the provisions of subsection (a) of this Section4.02, and as to the approximate cost of mailing to such Securityholders theform of proxy or other communication, if any, specified in such application.

####  

If the Trustee shall elect not to afford such applicants access to suchinformation, the Trustee shall, upon the written request of such applicants,mail to each Securityholder of Debt Securities whose name and address appear inthe information preserved at the time by the

 

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Trustee in accordance with the provisions ofsubsection (a) of this Section 4.02 a copy of the form of proxy or othercommunication which is specified in such request with reasonable promptnessafter a tender to the Trustee of the material to be mailed and of payment, orprovision for the payment, of the reasonable expenses of mailing, unless withinfive days after such tender, the Trustee shall mail to such applicants and filewith the Securities and Exchange Commission, if permitted or required byapplicable law, together with a copy of the material to be mailed, a writtenstatement to the effect that, in the opinion of the Trustee, such mailing wouldbe contrary to the best interests of the holders of all Debt Securities, as thecase may be, or would be in violation of applicable law.  Such written statement shall specify thebasis of such opinion.  If saidCommission, as permitted or required by applicable law, after opportunity for ahearing upon the objections specified in the written statement so filed, shallenter an order refusing to sustain any of such objections or if, after theentry of an order sustaining one or more of such objections, said Commissionshall find, after notice and opportunity for hearing, that all the objectionsso sustained have been met and shall enter an order so declaring, the Trusteeshall mail copies of such material to all such Securityholders with reasonablepromptness after the entry of such order and the renewal of such tender;otherwise the Trustee shall be relieved of any obligation or duty to suchapplicants respecting their application.

 

### (c)                                  Eachand every holder of Debt Securities, by receiving and holding the same, agreeswith the Company and the Trustee that none of the Company, the Trustee or anyPaying Agent shall be held accountable by reason of the disclosure of any suchinformation as to the names and addresses of the holders of Debt Securities inaccordance with the provisions of subsection (b) of this Section 4.02,regardless of the source from which such information was derived, and that theTrustee shall not be held accountable by reason of mailing any materialpursuant to a request made under said subsection (b).

###  

## Section 4.03                                                        Financialand Other Information.

##  

If at any time the Trust ceases to exist for whateverreason or is no longer the holder of the Debt Securities, the Company shall:

 

### (a)                                  deliverto each Securityholder (1) each Report on Form 10-K and Form 10-Q prepared bythe Company and filed with the Securities and Exchange Commission in accordancewith the Exchange Act within 90 days after the filing of each Form 10-K andwithin 30 days after the filing of each Form 10-Q, (2) if the Company is at anytime neither subject to Section 13 or 15(d) of the Exchange Act nor exempt fromreporting pursuant to Rule 12g3-2(b) thereunder, the information requiredto be provided by Rule 144A(d)(4) under the Securities Act and (3) 30 daysafter the end of the fiscal year of the Company Form 1099 or such other annualU.S. federal income tax information statement required by the Internal RevenueCode of 1986, as amended (the “Code”), containing such information with regardto the Debt Securities held by such holder as is required by the Code and theincome tax regulations of the U.S. Treasury thereunder; and

###  

### (b)                                 ifand for so long as ALESCO Preferred Funding I, Ltd. is the holder of the DebtSecurities, deliver to ALESCO Preferred Funding I, Ltd. the Company’s reportson Form H-b(11), promptly following their filing with the OTS.

 

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# ARTICLE VREMEDIES OF THE TRUSTEE AND SECURITYHOLDERS

#  

## Section 5.01                                                        Eventsof Default.

##  

The following events shall be “Events of Default” with respect to DebtSecurities:

 

### (a)                                  theCompany defaults in the payment of any interest upon any Debt Security when itbecomes due and payable, and continuance of such default for a period of 30days; for the avoidance of doubt, an extension of any interest payment periodby the Company in accordance with Section 2.11 of this Indenture shall notconstitute a default under this clause 5.01(a); or

###  

### (b)                                 theCompany defaults in the payment of all or any part of the principal of (orpremium, if any, on) any Debt Securities as and when the same shall become dueand payable, whether at maturity, upon redemption, by acceleration of maturity pursuantto Section 5.01 of this Indenture or otherwise; or

###  

### (c)                                  theCompany defaults in the performance of, or breaches, any of its covenants oragreements in Sections 3.06, 3.07, 3.08 or 3.09 of this Indenture (other than acovenant or agreement a default in whose performance or whose breach iselsewhere in this Section specifically dealt with), and continuance of suchdefault or breach for a period of 90 days after there has been given, byregistered or certified mail, to the Company by the Trustee or to the Companyand the Trustee by the holders of not less than 25% in aggregate principalamount of the outstanding Debt Securities, a written notice specifying suchdefault or breach and requiring it to be remedied and stating that such noticeis a “Notice of Default” hereunder; or

###  

### (d)                                 acourt having jurisdiction in the premises shall enter a decree or order forrelief in respect of the Company in an involuntary case under any applicablebankruptcy, insolvency or other similar law now or hereafter in effect, orappoints a receiver, liquidator, assignee, custodian, trustee, sequestrator orother similar official of the Company or for any substantial part of itsproperty, or orders the winding-up or liquidation of its affairs and suchdecree, appointment or order shall remain unstayed and in effect for a periodof 90 consecutive days; or

###  

### (e)                                  theCompany shall commence a voluntary case under any applicable bankruptcy,insolvency or other similar law now or hereafter in effect, shall consent tothe entry of an order for relief in an involuntary case under any such law, orshall consent to the appointment of or taking possession by a receiver,liquidator, assignee, trustee, custodian, sequestrator or other similarofficial of the Company or of any substantial part of its property, or shallmake any general assignment for the benefit of creditors, or shall failgenerally to pay its debts as they become due; or

###  

### (f)                                    theTrust shall have voluntarily or involuntarily liquidated, dissolved, wound-upits business or otherwise terminated its existence except in connection with(1) the distribution of the Debt Securities to holders of the Trust Securitiesin liquidation of their interests in the Trust, (2) the redemption of all ofthe outstanding Trust Securities or (3) certain mergers, consolidations oramalgamations, each as permitted by the Declaration.

 

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If an Event of Default specified under clause (a), (b) or (c) of thisSection 5.01 occurs and is continuing with respect to the Debt Securities,then, in each and every such case, either the Trustee or the holders of notless than 25% in aggregate principal amount of the Debt Securities thenoutstanding hereunder, by notice in writing to the Company (and to the Trusteeif given by Securityholders), may declare the entire principal of the DebtSecurities and any premium and interest accrued, but unpaid, thereon to be dueand payable immediately, and upon any such declaration the same shall becomeimmediately due and payable.  If anEvent of Default specified under clause (d), (e) or (f) of this Section 5.01occurs, then, in each and every such case, the entire principal amount of theDebt Securities and any premium and interest accrued, but unpaid, thereon shallipsofacto become immediately due and payable without furtheraction.

 

The foregoing provisions, however, are subject to the condition thatif, at any time after the principal of the Debt Securities shall have becomedue by acceleration, and before any judgment or decree for the payment of themoneys due shall have been obtained or entered as hereinafter provided, (i) theCompany shall pay or shall deposit with the Trustee a sum sufficient to pay allmatured installments of interest upon all the Debt Securities and all paymentson the Debt Securities which shall have become due otherwise than byacceleration (with interest upon all such payments and Deferred Interest, tothe extent permitted by law) and such amount as shall be sufficient to coverreasonable compensation to the Trustee and each predecessor Trustee, theirrespective agents, attorneys and counsel, and all other amounts due to theTrustee pursuant to Section 6.06, if any, and (ii) all Events of Default underthis Indenture, other than the non-payment of the payments in respect of DebtSecurities which shall have become due by acceleration, shall have been cured,waived or otherwise remedied as provided herein, then, in each and every suchcase, the holders of a majority in aggregate principal amount of the DebtSecurities then outstanding, by written notice to the Company and to theTrustee, may waive all defaults and rescind and annul such acceleration and itsconsequences, but no such waiver or rescission and annulment shall extend to orshall affect any subsequent default or shall impair any right consequentthereon; provided, however, that if the Debt Securities are heldby the Trust or a trustee of the Trust, such waiver or rescission and annulmentshall not be effective until the holders of a majority in aggregate liquidationamount of the outstanding Capital Securities of the Trust shall have consentedto such waiver or rescission and annulment.

 

In case the Trustee shall have proceeded to enforce any right underthis Indenture and such proceedings shall have been discontinued or abandonedbecause of such rescission or annulment or for any other reason or shall havebeen determined adversely to the Trustee, then and in every such case theCompany, the Trustee and the holders of the Debt Securities shall be restoredrespectively to their several positions and rights hereunder, and all rights,remedies and powers of the Company, the Trustee and the holders of the DebtSecurities shall continue as though no such proceeding had been taken.

 

## Section 5.02                                                        Paymentof Debt Securities on Default; Suit Therefor.

##  

The Company covenants that upon the occurrence of an Event of Defaultpursuant to clause (a) or (b) of Section 5.01 and upon demand of the Trustee,the Company will pay to the Trustee, for the benefit of the holders of the DebtSecurities, the whole amount that then shall have become due and payable on allDebt Securities, including Deferred Interest accrued on the

 

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Debt Securities; and, in addition thereto, suchfurther amount as shall be sufficient to cover the costs and expenses ofcollection, including a reasonable compensation to the Trustee, its agents,attorneys and counsel, and any other amounts due to the Trustee under Section6.06.  In case the Company shall failforthwith to pay such amounts upon such demand, the Trustee, in its own nameand as trustee of an express trust, shall be entitled and empowered toinstitute any actions or proceedings at law or in equity for the collection ofthe sums so due and unpaid, and may prosecute any such action or proceeding tojudgment or final decree, and may enforce any such judgment or final decreeagainst the Company or any other obligor on such Debt Securities and collect inthe manner provided by law out of the property of the Company or any otherobligor on such Debt Securities wherever situated the moneys adjudged ordecreed to be payable.

 

In case there shall be pending proceedings for the bankruptcy or forthe reorganization of the Company or any other obligor on the Debt Securitiesunder Bankruptcy Law, or in case a receiver or trustee shall have beenappointed for the property of the Company or such other obligor, or in the caseof any other similar judicial proceedings relative to the Company or other obligorupon the Debt Securities, or to the creditors or property of the Company orsuch other obligor, the Trustee, irrespective of whether the principal of theDebt Securities shall then be due and payable as therein expressed or byacceleration or otherwise and irrespective of whether the Trustee shall havemade any demand pursuant to the provisions of this Section 5.02, shall beentitled and empowered, by intervention in such proceedings or otherwise, tofile and prove a claim or claims for the whole amount of principal and interestowing and unpaid in respect of the Debt Securities and, in case of any judicialproceedings, to file such proofs of claim and other papers or documents as maybe necessary or advisable in order to have the claims of the Trustee (includingany claim for reasonable compensation to the Trustee and each predecessorTrustee, and their respective agents, attorneys and counsel, and forreimbursement of all other amounts due to the Trustee under Section 6.06) andof the Securityholders allowed in such judicial proceedings relative to theCompany or any other obligor on the Debt Securities, or to the creditors orproperty of the Company or such other obligor, unless prohibited by applicablelaw and regulations, to vote on behalf of the holders of the Debt Securities inany election of a trustee or a standby trustee in arrangement, reorganization,liquidation or other bankruptcy or insolvency proceedings or Person performingsimilar functions in comparable proceedings, and to collect and receive anymoneys or other property payable or deliverable on any such claims, and todistribute the same after the deduction of its charges and expenses; and anyreceiver, assignee or trustee in bankruptcy or reorganization is herebyauthorized by each of the Securityholders to make such payments to the Trustee,and, in the event that the Trustee shall consent to the making of such paymentsdirectly to the Securityholders, to pay to the Trustee such amounts as shall besufficient to cover reasonable compensation to the Trustee, each predecessorTrustee and their respective agents, attorneys and counsel, and all otheramounts due to the Trustee under Section 6.06.

 

Nothing herein contained shall be construed to authorize the Trustee toauthorize or consent to or accept or adopt on behalf of any Securityholder anyplan of reorganization, arrangement, adjustment or composition affecting theDebt Securities or the rights of any holder thereof or to authorize the Trusteeto vote in respect of the claim of any Securityholder in any such proceeding.

 

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All rights of action and of asserting claims under this Indenture, orunder any of the Debt Securities, may be enforced by the Trustee without thepossession of any of the Debt Securities, or the production thereof at anytrial or other proceeding relative thereto, and any such suit or proceedinginstituted by the Trustee shall be brought in its own name as trustee of anexpress trust, and any recovery of judgment shall be for the ratable benefit ofthe holders of the Debt Securities.

 

In any proceedings brought by the Trustee (and also any proceedingsinvolving the interpretation of any provision of this Indenture to which theTrustee shall be a party), the Trustee shall be held to represent all theholders of the Debt Securities, and it shall not be necessary to make anyholders of the Debt Securities parties to any such proceedings.

 

## Section 5.03                                                        Applicationof Moneys Collected by Trustee.

##  

Any moneys collected by the Trustee shall be applied in the followingorder, at the date or dates fixed by the Trustee for the distribution of suchmoneys, upon presentation of the several Debt Securities in respect of whichmoneys have been collected, and stamping thereon the payment, if only partiallypaid, and upon surrender thereof if fully paid:

 

First: To the payment of costs and expenses incurred by, and reasonablefees of, the Trustee, its agents, attorneys and counsel, and of all otheramounts due to the Trustee under Section 6.06;

 

Second: To the payment of all Senior Indebtedness of the Company if andto the extent required by Article XV;

 

Third:  To the payment of theamounts then due and unpaid upon Debt Securities, in respect of which or forthe benefit of which money has been collected, ratably, without preference orpriority of any kind, according to the amounts due upon such Debt Securities;and

 

Fourth: The balance, if any, to the Company.

 

## Section 5.04                                                        Proceedingsby Securityholders.

##  

No holder of any Debt Security shall have any right to institute anysuit, action or proceeding for any remedy hereunder, unless such holderpreviously shall have given to the Trustee written notice of an Event ofDefault with respect to the Debt Securities and unless the holders of not lessthan 25% in aggregate principal amount of the Debt Securities then outstandingshall have given the Trustee a written request to institute such action, suitor proceeding and shall have offered to the Trustee such reasonable indemnityas it may require against the costs, expenses and liabilities to be incurredthereby, and the Trustee for 60 days after its receipt of such notice, requestand offer of indemnity shall have failed to institute any such action, suit orproceeding; provided, that no holder of Debt Securities shall have anyright to prejudice the rights of any other holder of Debt Securities, obtainpriority or preference over any other such holder or enforce any right underthis Indenture except in the manner herein provided and for the equal, ratableand common benefit of all holders of Debt Securities.

 

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Notwithstanding any other provisions in this Indenture, the right ofany holder of any Debt Security to receive payment of the principal of andpremium, if any, and interest on such Debt Security when due, or to institutesuit for the enforcement of any such payment, shall not be impaired or affectedwithout the consent of such holder.  Forthe protection and enforcement of the provisions of this Section, each andevery Securityholder and the Trustee shall be entitled to such relief as can begiven either at law or in equity.

 

## Section 5.05                                                        Proceedingsby Trustee.

##  

In case of an Event of Default, the Trustee may in its discretionproceed to protect and enforce the rights vested in it by this Indenture bysuch appropriate judicial proceedings as the Trustee shall deem most effectualto protect and enforce any of such rights, either by suit in equity or byaction at law or by proceeding in bankruptcy or otherwise, whether for thespecific enforcement of any covenant or agreement contained in this Indentureor in aid of the exercise of any power granted in this Indenture, or to enforceany other legal or equitable right vested in the Trustee by this Indenture orby law.

 

## Section 5.06                                                        RemediesCumulative and Continuing.

##  

Except as otherwise provided in Section 2.06, all powers and remediesgiven by this Article V to the Trustee or to the Securityholders shall, to theextent permitted by law, be deemed cumulative and not exclusive of any otherpowers and remedies available to the Trustee or the holders of the DebtSecurities, by judicial proceedings or otherwise, to enforce the performance orobservance of the covenants and agreements contained in this Indenture orotherwise established with respect to the Debt Securities, and no delay oromission of the Trustee or of any holder of any of the Debt Securities toexercise any right or power accruing upon any Event of Default occurring andcontinuing as aforesaid shall impair any such right or power, or shall beconstrued to be a waiver of any such default or an acquiescence therein; and,subject to the provisions of Section 5.04, every power and remedy given by thisArticle V or by law to the Trustee or to the Securityholders may be exercisedfrom time to time, and as often as shall be deemed expedient, by the Trustee orby the Securityholders.

 

## Section 5.07                                                        Directionof Proceedings and Waiver of Defaults by Majority of Securityholders.

##  

The holders of a majority in aggregate principal amount of the DebtSecurities affected at the time outstanding and, if the Debt Securities areheld by the Trust or a trustee of the Trust, the holders of a majority inaggregate liquidation amount of the outstanding Capital Securities of the Trustshall have the right to direct the time, method and place of conducting anyproceeding for any remedy available to the Trustee, or exercising any trust orpower conferred on the Trustee with respect to such Debt Securities; provided,however, that if the Debt Securities are held by the Trust or a trusteeof the Trust, such time, method and place or such exercise, as the case may be,may not be so directed until the holders of a majority in aggregate liquidationamount of the outstanding Capital Securities of the Trust shall have directedsuch time, method and place or such exercise, as the case may be; provided,further, that (subject to the provisions of Section 6.01) the Trusteeshall have the right to decline to follow any such direction if the Trusteeshall determine that the action so directed would be unjustly prejudicial tothe holders

 

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not taking part in such direction or if the Trusteebeing advised by counsel determines that the action or proceeding so directedmay not lawfully be taken or if a Responsible Officer of the Trustee shalldetermine that the action or proceedings so directed would involve the Trusteein personal liability.  Prior to anydeclaration of acceleration, or ipsofacto acceleration, of thematurity of the Debt Securities, the holders of a majority in aggregateprincipal amount of the Debt Securities at the time outstanding may on behalfof the holders of all of the Debt Securities waive (or modify any previouslygranted waiver of) any past Default or Event of Default and its consequences,except a default (a) in the payment of principal of or premium, if any, orinterest on any of the Debt Securities, (b) in respect of covenants orprovisions hereof which cannot be modified or amended without the consent ofthe holder of each Debt Security affected, or (c)  in respect of the covenants contained in Section 3.09; provided,however, that if the Debt Securities are held by the Trust or a trusteeof the Trust, such waiver or modification to such waiver shall not be effectiveuntil the holders of a majority in aggregate liquidation amount of theoutstanding Capital Securities of the Trust shall have consented to such waiveror modification to such waiver; provided, further, that if theconsent of the holder of each outstanding Debt Security is required, suchwaiver or modification to such waiver shall not be effective until each holderof the outstanding Capital Securities of the Trust shall have consented to suchwaiver or modification to such waiver. Upon any such waiver or modification to such waiver, the Default orEvent of Default covered thereby shall be deemed to be cured for all purposesof this Indenture and the Company, the Trustee and the holders of the DebtSecurities shall be restored to their former positions and rights hereunder,respectively; but no such waiver or modification to such waiver shall extend toany subsequent or other Default or Event of Default or impair any rightconsequent thereon.  Whenever anyDefault or Event of Default hereunder shall have been waived as permitted bythis Section, said Default or Event of Default shall for all purposes of theDebt Securities and this Indenture be deemed to have been cured and to be notcontinuing.

 

## Section 5.08                                                        Noticeof Defaults.

##  

The Trustee shall, within 90 days after a Responsible Officer of theTrustee shall have actual knowledge or received written notice of theoccurrence of a default with respect to the Debt Securities, mail to allSecurityholders, as the names and addresses of such holders appear upon theDebt Security Register, notice of all defaults with respect to the DebtSecurities known to the Trustee, unless such defaults shall have been curedbefore the giving of such notice (the term “default” for the purpose of thisSection is hereby defined to be any event specified in Section 5.01, notincluding periods of grace, if any, provided for therein); provided, that,except in the case of default in the payment of the principal of or premium, ifany, or interest on any of the Debt Securities, the Trustee shall be protectedin withholding such notice if and so long as a Responsible Officer of theTrustee in good faith determines that the withholding of such notice is in theinterests of the Securityholders.

 

## Section 5.09                                                        Undertakingto Pay Costs.

##  

All parties to this Indenture agree, and each holder of any DebtSecurity by such holder’s acceptance thereof shall be deemed to have agreed,that any court may in its discretion require, in any suit for the enforcementof any right or remedy under this Indenture, or in any suit against the Trusteefor any action taken or omitted by it as Trustee, the filing by any partylitigant in such suit of an undertaking to pay the costs of such suit, and thatsuch court may in its

 

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discretion assess reasonable costs, includingreasonable attorneys’ fees and expenses, against any party litigant in suchsuit, having due regard to the merits and good faith of the claims or defensesmade by such party litigant; but the provisions of this Section shall not applyto any suit instituted by the Trustee, to any suit instituted by anySecurityholder, or group of Securityholders, holding in the aggregate more than10% in principal amount of the outstanding Debt Securities (or, if such DebtSecurities are held by the Trust or a trustee of the Trust, more than 10% inliquidation amount of the outstanding Capital Securities),to any suitinstituted by any Securityholder for the enforcement of the payment of theprincipal of or premium, if any, or interest on any Debt Security against theCompany on or after the same shall have become due and payable or to any suitinstituted in accordance with Section 14.12.

 

# ARTICLE VICONCERNING THE TRUSTEE

#  

## Section 6.01                                                        Dutiesand Responsibilities of Trustee.

##  

With respect to the holders of Debt Securities issued hereunder, theTrustee, prior to the occurrence of an Event of Default with respect to theDebt Securities and after the curing or waiving of all Events of Default whichmay have occurred, with respect to the Debt Securities, undertakes to performsuch duties and only such duties as are specifically set forth in thisIndenture.  In case an Event of Defaultwith respect to the Debt Securities has occurred (which has not been cured orwaived), the Trustee shall exercise such of the rights and powers vested in itby this Indenture, and use the same degree of care and skill in their exercise,as a prudent person would exercise or use under the circumstances in theconduct of such person’s own affairs.

 

No provision of this Indenture shall be construed to relieve theTrustee from liability for its own negligent action, its own negligent failureto act or its own willful misconduct or bad faith, except that:

 

### (a)                                  priorto the occurrence of an Event of Default and after the curing or waiving of allEvents of Default which may have occurred:

###  

#### (i)                                     theduties and obligations of the Trustee with respect to the Debt Securities shallbe determined solely by the express provisions of this Indenture, and theTrustee shall not be liable except for the performance of such duties andobligations with respect to the Debt Securities as are specifically set forthin this Indenture, and no implied covenants or obligations shall be read intothis Indenture against the Trustee; and

####  

#### (ii)                                  inthe absence of bad faith on the part of the Trustee, the Trustee mayconclusively rely, as to the truth of the statements and the correctness of theopinions expressed therein, upon any certificates or opinions furnished to theTrustee and conforming to the requirements of this Indenture; but, in the caseof any such certificates or opinions which by any provision hereof arespecifically required to be furnished to the Trustee, the Trustee shall beunder a duty to examine the same to determine whether or not they conform ontheir face to the requirements of this Indenture;

 

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### (b)                                 theTrustee shall not be liable for any error of judgment made in good faith by aResponsible Officer or Officers of the Trustee, unless it shall be proved thatthe Trustee was negligent in ascertaining the pertinent facts;

###  

### (c)                                  theTrustee shall not be liable with respect to any action taken or omitted to betaken by it in good faith, in accordance with the direction of theSecurityholders pursuant to Section 5.07, relating to the time, method andplace of conducting any proceeding for any remedy available to the Trustee, orexercising any trust or power conferred upon the Trustee, under this Indenture;and

###  

### (d)                                 theTrustee shall not be charged with knowledge of any Default or Event of Defaultwith respect to the Debt Securities unless either (1) a Responsible Officershall have actual knowledge of such Default or Event of Default or (2) writtennotice of such Default or Event of Default shall have been given to the Trusteeby the Company or any other obligor on the Debt Securities or by any holder ofthe Debt Securities, except that the Trustee shall be deemed to have knowledgeof any Event of Default pursuant to Sections 5.01(a) or 5.01(b) hereof (otherthan an Event of Default resulting from the default in the payment ofAdditional Amounts if the Trustee does not have actual knowledge or written noticethat such payment is due and payable) .

###  

None of the provisions contained in this Indenture shall require theTrustee to expend or risk its own funds or otherwise incur personal financialliability in the performance of any of its duties or in the exercise of any ofits rights or powers.

 

## Section 6.02                                                        Relianceon Documents, Opinions, etc.

##  

Except as otherwise provided in Section 6.01:

 

### (a)                                  theTrustee may conclusively rely and shall be fully protected in acting orrefraining from acting upon any resolution, certificate, statement, instrument,opinion, report, notice, request, consent, order, bond, note, debenture orother paper or document believed by it in good faith to be genuine and to havebeen signed or presented by the proper party or parties;

###  

### (b)                                 anyrequest, direction, order or demand of the Company mentioned herein shall besufficiently evidenced by an Officers’ Certificate (unless other evidence inrespect thereof be herein specifically prescribed); and any Board Resolutionmay be evidenced to the Trustee by a copy thereof certified by the Secretary oran Assistant Secretary of the Company;

###  

### (c)                                  theTrustee may consult with counsel of its selection and any advice or Opinion ofCounsel shall be full and complete authorization and protection in respect ofany action taken, suffered or omitted by it hereunder in good faith and inaccordance with such advice or Opinion of Counsel;

###  

### (d)                                 theTrustee shall be under no obligation to exercise any of the rights or powersvested in it by this Indenture at the request, order or direction of any of theSecurityholders, pursuant to the provisions of this Indenture, unless suchSecurityholders shall have offered to the Trustee reasonable security orindemnity against the costs, expenses and liabilities which may be incurredtherein or thereby;

 

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### (e)                                  theTrustee shall not be liable for any action taken or omitted by it in good faithand reasonably believed by it to be authorized or within the discretion orrights or powers conferred upon it by this Indenture; nothing contained hereinshall, however, relieve the Trustee of the obligation, upon the occurrence ofan Event of Default with respect to the Debt Securities (which has not beencured or waived) to exercise with respect to the Debt Securities such of therights and powers vested in it by this Indenture, and to use the same degree ofcare and skill in their exercise, as a prudent person would exercise or useunder the circumstances in the conduct of such person’s own affairs;

###  

### (f)                                    theTrustee shall not be bound to make any investigation into the facts or mattersstated in any resolution, certificate, statement, instrument, opinion, report,notice, request, consent, order, approval, bond, debenture, coupon or otherpaper or document, unless requested in writing to do so by the holders of amajority in aggregate principal amount of the outstanding Debt Securitiesaffected thereby; provided, however, that if the payment within areasonable time to the Trustee of the costs, expenses or liabilities likely tobe incurred by it in the making of such investigation is, in the opinion of theTrustee, not reasonably assured to the Trustee by the security afforded to itby the terms of this Indenture, the Trustee may require reasonable indemnityagainst such expense or liability as a condition to so proceeding; and

###  

### (g)                                 theTrustee may execute any of the trusts or powers hereunder or perform any dutieshereunder either directly or by or through agents (including any AuthenticatingAgent) or attorneys, and the Trustee shall not be responsible for anymisconduct or negligence on the part of any such agent or attorney appointed byit with due care.

###  

## Section 6.03                                                        NoResponsibility for Recitals, etc.

##  

The recitals contained herein and in the Debt Securities (except in thecertificate of authentication of the Trustee or the Authenticating Agent) shallbe taken as the statements of the Company, and the Trustee and theAuthenticating Agent assume no responsibility for the correctness of thesame.  The Trustee and theAuthenticating Agent make no representations as to the validity or sufficiencyof this Indenture or of the Debt Securities. The Trustee and the Authenticating Agent shall not be accountable forthe use or application by the Company of any Debt Securities or the proceeds ofany Debt Securities authenticated and delivered by the Trustee or theAuthenticating Agent in conformity with the provisions of this Indenture.

 

## Section 6.04                                                        Trustee,Authenticating Agent, Paying Agents, Transfer Agents or Registrar May Own DebtSecurities.

##  

The Trustee, any Authenticating Agent, any Paying Agent, any transferagent or any Debt Security registrar, in its individual or any other capacity,may become the owner or pledgee of Debt Securities with the same rights itwould have if it were not Trustee, Authenticating Agent, Paying Agent, transferagent or Debt Security registrar.

 

## Section 6.05                                                        Moneysto be Held in Trust.

##  

Subject to the provisions of Section 12.04, all moneys received by theTrustee or any Paying Agent shall, until used or applied as herein provided, beheld in trust for the purpose for which they were received, but need not besegregated from other funds except to the extent

 

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required by law. The Trustee and any Paying Agent shall be under no liability forinterest on any money received by it hereunder except as otherwise agreed inwriting with the Company.  So long as noEvent of Default shall have occurred and be continuing, all interest allowed onany such moneys, if any, shall be paid from time to time to the Company uponthe written order of the Company, signed by the Chairman of the Board ofDirectors, the President, the Chief Operating Officer, a Vice President, theTreasurer or an Assistant Treasurer of the Company.

 

## Section 6.06                                                        Compensationand Expenses of Trustee.

##  

The Company covenants and agrees to pay to the Trustee from time totime, and the Trustee shall be entitled to, such compensation as shall beagreed to in writing between the Company and the Trustee (which shall not belimited by any provision of law in regard to the compensation of a trustee ofan express trust), and the Company will pay or reimburse the Trustee upon itswritten request for all documented reasonable expenses, disbursements andadvances incurred or made by the Trustee in accordance with any of theprovisions of this Indenture (including the reasonable compensation and thereasonable expenses and disbursements of its counsel and of all Persons notregularly in its employ) except any such expense, disbursement or advance thatarises from its negligence, willful misconduct or bad faith.  The Company also covenants to indemnify eachof the Trustee (including in its individual capacity) and any predecessorTrustee (and its officers, agents, directors and employees) for, and to hold itharmless against, any and all loss, damage, claim, liability or expenseincluding taxes (other than taxes based on the income of the Trustee), exceptto the extent such loss, damage, claim, liability or expense results from thenegligence, willful misconduct or bad faith of such indemnitee, arising out ofor in connection with the acceptance or administration of this trust, includingthe costs and expenses of defending itself against any claim or liability inthe premises.  The obligations of theCompany under this Section to compensate and indemnify the Trustee and to payor reimburse the Trustee for documented expenses, disbursements and advancesshall constitute additional indebtedness hereunder.  Such additional indebtedness shall be secured by a lien prior tothat of the Debt Securities upon all property and funds held or collected bythe Trustee as such, except funds held in trust for the benefit of the holdersof particular Debt Securities.

 

Without prejudice to any other rights available to the Trustee underapplicable law, when the Trustee incurs expenses or renders services inconnection with an Event of Default specified in clause (d), (e) or (f) ofSection 5.01, the expenses (including the reasonable charges and expenses ofits counsel) and the compensation for the services are intended to constituteexpenses of administration under any applicable federal or state bankruptcy,insolvency or other similar law.

 

The provisions of this Section shall survive the resignation or removalof the Trustee and the defeasance or other termination of this Indenture.

 

## Section 6.07                                                        Officers’Certificate as Evidence.

##  

Except as otherwise provided in Sections 6.01 and 6.02, whenever in theadministration of the provisions of this Indenture the Trustee shall deem itnecessary or desirable that a matter be proved or established prior to takingor omitting any action hereunder, such

 

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matter (unless other evidence in respect thereof beherein specifically prescribed) may, in the absence of negligence, willfulmisconduct or bad faith on the part of the Trustee, be deemed to beconclusively proved and established by an Officers’ Certificate delivered tothe Trustee, and such certificate, in the absence of negligence, willfulmisconduct or bad faith on the part of the Trustee, shall be full warrant tothe Trustee for any action taken or omitted by it under the provisions of thisIndenture upon the faith thereof.

 

## Section 6.08                                                        Eligibilityof Trustee.

##  

The Trustee hereunder shall at all times be a U.S. Person that is abanking corporation or national association organized and doing business underthe laws of the United States of America or any state thereof or of theDistrict of Columbia and authorized under such laws to exercise corporate trustpowers, having a combined capital and surplus of at least fifty million U.S.dollars ($50,000,000) and subject to supervision or examination by federal, state,or District of Columbia authority.  Ifsuch corporation or national association publishes reports of condition atleast annually, pursuant to law or to the requirements of the aforesaidsupervising or examining authority, then for the purposes of this Section thecombined capital and surplus of such corporation or national association shallbe deemed to be its combined capital and surplus as set forth in its mostrecent records of condition so published.

 

The Company may not, nor may any Person directly or indirectlycontrolling, controlled by, or under common control with the Company, serve asTrustee, notwithstanding that such corporation or national association shall beotherwise eligible and qualified under this Article.

 

In case at any time the Trustee shall cease to be eligible inaccordance with the provisions of this Section, the Trustee shall resignimmediately in the manner and with the effect specified in Section 6.09.

 

If the Trustee has or shall acquire any “conflicting interest” withinthe meaning of §310(b) of the Trust Indenture Act, the Trustee shall eithereliminate such interest or resign, to the extent and in the manner provided by,and subject to, this Indenture.

 

## Section 6.09                                                        Resignationor Removal of Trustee.

##  

### (a)                                  TheTrustee, or any trustee or trustees hereafter appointed, may at any time resignby giving written notice of such resignation to the Company and by mailingnotice thereof, at the Company’s expense, to the holders of the Debt Securitiesat their addresses as they shall appear on the Debt Security Register.  Upon receiving such notice of resignation,the Company shall promptly appoint a successor trustee or trustees by writteninstrument, in duplicate, executed by order of its Board of Directors, one copyof which instrument shall be delivered to the resigning Trustee and one copy tothe successor Trustee.  If no successorTrustee shall have been so appointed and have accepted appointment within 30days after the mailing of such notice of resignation to the affected Securityholders,the resigning Trustee may petition any court of competent jurisdiction for theappointment of a successor Trustee, or any Securityholder who has been a bonafide holder of a Debt Security or Debt Securities for at least six months may,subject to the provisions of Section 5.09, on behalf of himself or herself andall others

 

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### similarlysituated, petition any such court for the appointment of a successorTrustee.  Such court may thereupon,after such notice, if any, as it may deem proper and prescribe, appoint asuccessor Trustee.

###  

### (b)                                 Incase at any time any of the following shall occur:

###  

#### (i)                                     theTrustee shall fail to comply with the provisions of the last paragraph ofSection 6.08 after written request therefor by the Company or by anySecurityholder who has been a bona fide holder of a Debt Security or DebtSecurities for at least six months;

####  

#### (ii)                                  theTrustee shall cease to be eligible in accordance with the provisions of Section6.08 and shall fail to resign after written request therefor by the Company orby any such Securityholder; or

####  

#### (iii)                               theTrustee shall become incapable of acting, or shall be adjudged bankrupt orinsolvent, or a receiver of the Trustee or of its property shall be appointed,or any public officer shall take charge or control of the Trustee or of itsproperty or affairs for the purpose of rehabilitation, conservation orliquidation,

####  

then, in any such case, the Company may remove the Trustee and appointa successor Trustee by written instrument, in duplicate, executed by order ofthe Board of Directors, one copy of which instrument shall be delivered to theTrustee so removed and one copy to the successor Trustee, or, subject to theprovisions of Section 5.09, if no successor Trustee shall have been soappointed and have accepted appointment within 30 days of the occurrence of anyof (i), (ii) or (iii) above, any Securityholder who has been a bona fide holderof a Debt Security or Debt Securities for at least six months may, on behalf ofhimself or herself and all others similarly situated, petition any court ofcompetent jurisdiction for the removal of the Trustee and the appointment of asuccessor Trustee.  Such court maythereupon, after such notice, if any, as it may deem proper and prescribe,remove the Trustee and appoint a successor Trustee.

 

### (c)                                  Uponprior written notice to the Company and the Trustee, the holders of a majorityin aggregate principal amount of the Debt Securities at the time outstandingmay at any time remove the Trustee and nominate a successor Trustee, whichshall be deemed appointed as successor Trustee unless within ten Business Daysafter such nomination the Company objects thereto, in which case or in the caseof a failure by such holders to nominate a successor Trustee, the Trustee soremoved or any Securityholder, upon the terms and conditions and otherwise asin subsection (a) of this Section, may petition any court of competentjurisdiction for an appointment of a successor.

###  

### (d)                                 Anyresignation or removal of the Trustee and appointment of a successor Trusteepursuant to any of the provisions of this Section shall become effective uponacceptance of appointment by the successor Trustee as provided in Section 6.10.

###  

## Section 6.10                                                        Acceptanceby Successor Trustee.

##  

Any successor Trustee appointed as provided in Section 6.09 shallexecute, acknowledge and deliver to the Company and to its predecessor Trusteean indenture

 

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supplemental hereto which shall contain suchprovisions as shall be deemed necessary or desirable to confirm that all of therights, powers, trusts and duties of the retiring Trustee shall be vested inthe successor Trustee, and thereupon the resignation or removal of the retiringTrustee shall become effective and such successor Trustee, without any furtheract, deed or conveyance, shall become vested with all the rights, powers,duties and obligations with respect to the Debt Securities of its predecessorhereunder, with like effect as if originally named as Trustee herein; but,nevertheless, on the written request of the Company or of the successorTrustee, the Trustee ceasing to act shall, upon payment of the amounts then dueit pursuant to the provisions of Section 6.06, execute and deliver aninstrument transferring to such successor Trustee all the rights and powers ofthe Trustee so ceasing to act and shall duly assign, transfer and deliver tosuch successor Trustee all property and money held by such retiring Trusteehereunder.  Upon request of any suchsuccessor Trustee, the Company shall execute any and all instruments in writingfor more fully and certainly vesting in and confirming to such successorTrustee all such rights and powers.  AnyTrustee ceasing to act shall, nevertheless, retain a lien upon all property orfunds held or collected by such Trustee to secure any amounts then due itpursuant to the provisions of Section 6.06.

 

No successor Trustee shall accept appointment as provided in thisSection unless at the time of such acceptance such successor Trustee shall beeligible and qualified under the provisions of Section 6.08.

 

In no event shall a retiring Trustee be liable for the acts oromissions of any successor Trustee hereunder.

 

Upon acceptance of appointment by a successor Trustee as provided inthis Section, the Company shall mail notice of the succession of such Trusteehereunder to the holders of Debt Securities at their addresses as they shallappear on the Debt Security Register. If the Company fails to mail such notice within ten Business Days afterthe acceptance of appointment by the successor Trustee, the successor Trusteeshall cause such notice to be mailed at the expense of the Company.

 

## Section 6.11                                                        Successionby Merger, etc.

##  

Any corporation into which the Trustee may be merged or converted orwith which it may be consolidated, or any corporation resulting from anymerger, conversion or consolidation to which the Trustee shall be a party, orany corporation succeeding to all or substantially all of the corporate trustbusiness of the Trustee, shall be the successor of the Trustee hereunderwithout the execution or filing of any paper or any further act on the part ofany of the parties hereto, provided, that such corporation shall beotherwise eligible and qualified under this Article.

 

In case at the time such successor to the Trustee shall succeed to thetrusts created by this Indenture any of the Debt Securities shall have beenauthenticated but not delivered, any such successor to the Trustee may adoptthe certificate of authentication of any predecessor Trustee, and deliver suchDebt Securities so authenticated; and in case at that time any of the DebtSecurities shall not have been authenticated, any successor to the Trustee mayauthenticate such Debt Securities either in the name of any predecessorhereunder or in the name of the

 

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successor Trustee; and in all such cases suchcertificates shall have the full force which it is anywhere in the DebtSecurities or in this Indenture provided that the certificate of the Trusteeshall have; provided, however, that the right to adopt thecertificate of authentication of any predecessor Trustee or authenticate DebtSecurities in the name of any predecessor Trustee shall apply only to itssuccessor or successors by merger, conversion or consolidation.

 

## Section 6.12                                                        AuthenticatingAgents.

##  

There may be one or more Authenticating Agents appointed by the Trusteeupon the request of the Company with power to act on its behalf and subject toits direction in the authentication and delivery of Debt Securities issued uponexchange or registration of transfer thereof as fully to all intents andpurposes as though any such Authenticating Agent had been expressly authorizedto authenticate and deliver Debt Securities; provided, however,that the Trustee shall have no liability to the Company for any acts oromissions of the Authenticating Agent with respect to the authentication anddelivery of Debt Securities.  Any suchAuthenticating Agent shall at all times be a corporation organized and doingbusiness under the laws of the United States or of any state thereof or of theDistrict of Columbia authorized under such laws to act as Authenticating Agent,having a combined capital and surplus of at least $50,000,000 and being subjectto supervision or examination by federal, state or District of Columbiaauthority.  If such corporationpublishes reports of condition at least annually pursuant to law or therequirements of such authority, then for the purposes of this Section thecombined capital and surplus of such corporation shall be deemed to be itscombined capital and surplus as set forth in its most recent report ofcondition so published.  If at any timean Authenticating Agent shall cease to be eligible in accordance with theprovisions of this Section, it shall resign immediately in the manner and withthe effect herein specified in this Section.

 

Any corporation into which any Authenticating Agent may be merged orconverted or with which it may be consolidated, or any corporation resultingfrom any merger, consolidation or conversion to which any Authenticating Agentshall be a party, or any corporation succeeding to all or substantially all ofthe corporate trust business of any Authenticating Agent, shall be thesuccessor of such Authenticating Agent hereunder, if such successor corporationis otherwise eligible under this Section without the execution or filing of anypaper or any further act on the part of the parties hereto or suchAuthenticating Agent.

 

Any Authenticating Agent may at any time resign by giving writtennotice of resignation to the Trustee and to the Company.  The Trustee may at any time terminate theagency of any Authenticating Agent with respect to the Debt Securities bygiving written notice of termination to such Authenticating Agent and to theCompany.  Upon receiving such a noticeof resignation or upon such a termination, or in case at any time any AuthenticatingAgent shall cease to be eligible under this Section, the Trustee may, and uponthe request of the Company shall, promptly appoint a successor AuthenticatingAgent eligible under this Section, shall give written notice of suchappointment to the Company and shall mail notice of such appointment to allholders of Debt Securities as the names and addresses of such holders appear onthe Debt Security Register.  Anysuccessor Authenticating Agent, upon acceptance of its appointment hereunder,shall become vested with all rights, powers, duties and responsibilities of itspredecessor hereunder, with like effect as if originally named asAuthenticating Agent herein.

 

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The Company agrees to pay to any Authenticating Agent from time to timereasonable compensation for its services. Any Authenticating Agent shall have no responsibility or liability forany action taken by it as such in accordance with the directions of theTrustee.

 

# ARTICLE VIICONCERNING THE SECURITYHOLDERS

#  

## Section 7.01                                                        Actionby Securityholders.

##  

Whenever in this Indenture it is provided that the holders of aspecified percentage in aggregate principal amount of the Debt Securities maytake any action (including the making of any demand or request, the giving ofany notice, consent or waiver or the taking of any other action), the fact thatat the time of taking any such action the holders of such specified percentagehave joined therein may be evidenced (a) by any instrument or any number ofinstruments of similar tenor executed by such Securityholders in person or byagent or proxy appointed in writing, or (b) by the record of such holders ofDebt Securities voting in favor thereof at any meeting of such Securityholdersduly called and held in accordance with the provisions of Article VIII, or (c)by a combination of such instrument or instruments and any such record of sucha meeting of such Securityholders, or (d) by any other method the Trustee deemssatisfactory.

 

If the Company shall solicit from the Securityholders any request,demand, authorization, direction, notice, consent, waiver or other action orrevocation of the same, the Company may, at its option, as evidenced by anOfficers’ Certificate, fix in advance a record date for such Debt Securitiesfor the determination of Securityholders entitled to give such request, demand,authorization, direction, notice, consent, waiver or other action or revocationof the same, but the Company shall have no obligation to do so.  If such a record date is fixed, suchrequest, demand, authorization, direction, notice, consent, waiver or otheraction or revocation of the same may be given before or after the record date,but only the Securityholders of record at the close of business on the recorddate shall be deemed to be Securityholders for the purposes of determiningwhether Securityholders of the requisite proportion of outstanding DebtSecurities have authorized or agreed or consented to such request, demand,authorization, direction, notice, consent, waiver or other action or revocationof the same, and for that purpose the outstanding Debt Securities shall becomputed as of the record date; provided, however, that no suchauthorization, agreement or consent by such Securityholders on the record dateshall be deemed effective unless it shall become effective pursuant to theprovisions of this Indenture not later than six months after the record date.

 

## Section 7.02                                                        Proofof Execution by Securityholders.

##  

Subject to the provisions of Sections 6.01, 6.02 and 8.05, proof of theexecution of any instrument by a Securityholder or such Securityholder’s agentor proxy shall be sufficient if made in accordance with such reasonable rulesand regulations as may be prescribed by the Trustee or in such manner as shallbe satisfactory to the Trustee.  Theownership of Debt Securities shall be proved by the Debt Security Register orby a certificate of the Debt Security registrar.  The Trustee may require such additional proof of any matterreferred to in this Section as it shall deem necessary.

 

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The record of any Securityholders’ meeting shall be proved in themanner provided in Section 8.06.

 

## Section 7.03                                                        WhoAre Deemed Absolute Owners.

##  

Prior to due presentment for registration of transfer of any DebtSecurity, the Company, the Trustee, any Authenticating Agent, any Paying Agent,any transfer agent and any Debt Security registrar may deem the Person in whosename such Debt Security shall be registered upon the Debt Security Register tobe, and may treat such Person as, the absolute owner of such Debt Security(whether or not such Debt Security shall be overdue) for the purpose ofreceiving payment of or on account of the principal of and premium, if any, andinterest on such Debt Security and for all other purposes; and none of theCompany, the Trustee, any Authenticating Agent, any Paying Agent, any transferagent or any Debt Security registrar shall be affected by any notice to thecontrary.  All such payments so made toany holder for the time being or upon such holder’s order shall be valid, and,to the extent of the sum or sums so paid, effectual to satisfy and dischargethe liability for moneys payable upon any such Debt Security.

 

## Section 7.04                                                        DebtSecurities Owned by Company Deemed Not Outstanding.

##  

In determining whether the holders of the requisite aggregate principalamount of Debt Securities have concurred in any direction, consent or waiverunder this Indenture, Debt Securities which are owned by the Company or anyother obligor on the Debt Securities or by any Person directly or indirectlycontrolling or controlled by or under direct or indirect common control withthe Company (other than the Trust) or any other obligor on the Debt Securitiesshall be disregarded and deemed not to be outstanding for the purpose of anysuch determination, provided, that for the purposes of determiningwhether the Trustee shall be protected in relying on any such direction,consent or waiver, only Debt Securities which a Responsible Officer of the Trusteeactually knows are so owned shall be so disregarded.  Debt Securities so owned which have been pledged in good faithmay be regarded as outstanding for the purposes of this Section if the pledgeeshall establish to the satisfaction of the Trustee the pledgee’s right to votesuch Debt Securities and that the pledgee is not the Company or any such otherobligor or Person directly or indirectly controlling or controlled by or underdirect or indirect common control with the Company or any such other obligor.  In the case of a dispute as to such right,any decision by the Trustee taken upon the advice of counsel shall be fullprotection to the Trustee.

 

## Section 7.05                                                        Revocationof Consents; Future Holders Bound.

##  

At any time prior to (but not after) the evidencing to the Trustee, asprovided in Section 7.01, of the taking of any action by the holders of thepercentage in aggregate principal amount of the Debt Securities specified inthis Indenture in connection with such action, any holder (in cases where no recorddate has been set pursuant to Section 7.01) or any holder as of an applicablerecord date (in cases where a record date has been set pursuant to Section7.01) of a Debt Security (or any Debt Security issued in whole or in part inexchange or substitution therefor) the serial number of which is shown by theevidence to be included in the Debt Securities the holders of which haveconsented to such action may, by filing written notice with the Trustee at thePrincipal Office of the Trustee and upon proof of holding as provided in

 

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Section 7.02, revoke such action so far as concernssuch Debt Security (or so far as concerns the principal amount represented byany exchanged or substituted Debt Security).  Except as aforesaid any such action taken by the holder of anyDebt Security shall be conclusive and binding upon such holder and upon allfuture holders and owners of such Debt Security, and of any Debt Security issuedin exchange or substitution therefor or on registration of transfer thereof,irrespective of whether or not any notation in regard thereto is made upon suchDebt Security or any Debt Security issued in exchange or substitution therefor.

 

# ARTICLE VIIISECURITYHOLDERS’ MEETINGS

#  

## Section 8.01                                                        Purposesof Meetings.

##  

A meeting of Securityholders may be called at any time and from time totime pursuant to the provisions of this Article VIII for any of the followingpurposes:

 

### (a)                                  togive any notice to the Company or to the Trustee, or to give any directions tothe Trustee, or to consent to the waiving of any default hereunder and itsconsequences, or to take any other action authorized to be taken bySecurityholders pursuant to any of the provisions of Article V;

###  

### (b)                                 toremove the Trustee and nominate a successor trustee pursuant to the provisionsof Article VI;

###  

### (c)                                  toconsent to the execution of an indenture or indentures supplemental heretopursuant to the provisions of Section 9.02; or

###  

### (d)                                 totake any other action authorized to be taken by or on behalf of the holders ofany specified aggregate principal amount of such Debt Securities under anyother provision of this Indenture or under applicable law.

###  

## Section 8.02                                                        Callof Meetings by Trustee.

##  

The Trustee may at any time call a meeting of Securityholders to takeany action specified in Section 8.01, to be held at such time and at such placein The City of New York, the Borough of Manhattan, or Wilmington, Delaware, asthe Trustee shall determine.  Notice ofevery meeting of the Securityholders, setting forth the time and the place ofsuch meeting and in general terms the action proposed to be taken at suchmeeting, shall be mailed to holders of Debt Securities affected at theiraddresses as they shall appear on the Debt Securities Register.  Such notice shall be mailed not less than 20nor more than 180 days prior to the date fixed for the meeting.

 

## Section 8.03                                                        Callof Meetings by Company or Securityholders.

##  

In case at any time the Company pursuant to a Board Resolution, or theholders of at least 10% in aggregate principal amount of the Debt Securities,as the case may be, then outstanding, shall have requested the Trustee to calla meeting of Securityholders, by written request setting forth in reasonabledetail the action proposed to be taken at the meeting, and the

 

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Trustee shall not have mailed the notice of suchmeeting within 20 days after receipt of such request, then the Company or suchSecurityholders may determine the time and the place in Sioux Falls for suchmeeting and may call such meeting to take any action authorized in Section8.01, by mailing notice thereof as provided in Section 8.02.

 

## Section 8.04                                                        Qualificationsfor Voting.

##  

To be entitled to vote at any meeting of Securityholders, a Personshall be (a) a holder of one or more Debt Securities or (b) a Person appointedby an instrument in writing as proxy by a holder of one or more DebtSecurities.  The only Persons who shallbe entitled to be present or to speak at any meeting of Securityholders shallbe the Persons entitled to vote at such meeting and their counsel and anyrepresentatives of the Trustee and its counsel and any representatives of theCompany and its counsel.

 

## Section 8.05                                                        Regulations.

##  

Notwithstanding any other provisions of this Indenture, the Trustee maymake such reasonable regulations as it may deem advisable for any meeting ofSecurityholders, in regard to proof of the holding of Debt Securities and ofthe appointment of proxies, and in regard to the appointment and duties ofinspectors of votes, the submission and examination of proxies, certificatesand other evidence of the right to vote, and such other matters concerning theconduct of the meeting as it shall deem appropriate.

 

The Trustee shall, by an instrument in writing, appoint a temporarychairman of the meeting, unless the meeting shall have been called by theCompany or by Securityholders as provided in Section 8.03, in which case theCompany or the Securityholders calling the meeting, as the case may be, shallin like manner appoint a temporary chairman. A permanent chairman and apermanent secretary of the meeting shall be elected by majority vote at themeeting.

 

Subject to the provisions of Section 7.04, at any meeting each holderof Debt Securities with respect to which such meeting is being held or proxytherefor shall be entitled to one vote for each $1,000 principal amount of DebtSecurities held or represented by such holder; provided, however,that no vote shall be cast or counted at any meeting in respect of any DebtSecurity challenged as not outstanding and ruled by the chairman of the meetingto be not outstanding.  The chairman ofthe meeting shall have no right to vote other than by virtue of Debt Securitiesheld by such chairman or instruments in writing as aforesaid duly designatingsuch chairman as the Person to vote on behalf of other Securityholders.  Any meeting of Securityholders duly calledpursuant to the provisions of Section 8.02 or 8.03 may be adjourned from timeto time by a majority of those present, whether or not constituting a quorum,and the meeting may be held as so adjourned without further notice.

 

## Section 8.06                                                        Voting.

##  

The vote upon any resolution submitted to any meeting of holders ofDebt Securities with respect to which such meeting is being held shall be bywritten ballots on which shall be subscribed the signatures of such holders orof their representatives by proxy and the serial number or numbers of the DebtSecurities held or represented by them. The permanent chairman of the meeting shall appoint two inspectors ofvotes who shall count all votes cast at

 

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the meeting for or against any resolution and whoshall make and file with the secretary of the meeting their verified writtenreports in triplicate of all votes cast at the meeting. A record in duplicateof the proceedings of each meeting of Securityholders shall be prepared by thesecretary of the meeting and there shall be attached to said record the originalreports of the inspectors of votes on any vote by ballot taken thereat andaffidavits by one or more Persons having knowledge of the facts setting forth acopy of the notice of the meeting and showing that said notice was mailed asprovided in Section 8.02.  The recordshall show the serial numbers of the Debt Securities voting in favor of oragainst any resolution. The record shall be signed and verified by theaffidavits of the permanent chairman and secretary of the meeting and one ofthe duplicates shall be delivered to the Company and the other to the Trusteeto be preserved by the Trustee, the latter to have attached thereto the ballotsvoted at the meeting.

 

Any record so signed and verified shall be conclusive evidence of thematters therein stated.

 

## Section 8.07                                                        Quorum;Actions.

##  

The Persons entitled to vote a majority in aggregate principal amountof the Debt Securities then outstanding shall constitute a quorum for a meetingof Securityholders; provided, however, that if any action is to betaken at such meeting with respect to a consent, waiver, request, demand,notice, authorization, direction or other action which may be given by theholders of not less than a specified percentage in aggregate principal amountof the Debt Securities then outstanding, the Persons holding or representingsuch specified percentage in aggregate principal amount of the Debt Securitiesthen outstanding will constitute a quorum. In the absence of a quorum within 30 minutes of the time appointed forany such meeting, the meeting shall, if convened at the request ofSecurityholders, be dissolved.  In anyother case, the meeting may be adjourned for a period of not less than 10 daysas determined by the permanent chairman of the meeting prior to the adjournmentof such meeting.  In the absence of aquorum at any such adjourned meeting, such adjourned meeting may be furtheradjourned for a period of not less than 10 days as determined by the permanentchairman of the meeting prior to the adjournment of such adjournedmeeting.  Notice of the reconvening ofany adjourned meeting shall be given as provided in Section 8.02, except thatsuch notice need be given only once not less than five days prior to the dateon which the meeting is scheduled to be reconvened.  Notice of the reconvening of an adjourned meeting shall stateexpressly the percentage, as provided above, of the aggregate principal amountof the Debt Securities then outstanding which shall constitute a quorum.

 

Except as limited by the proviso in the first paragraph of Section9.02, any resolution presented to a meeting or adjourned meeting dulyreconvened at which a quorum is present as aforesaid may be adopted by theaffirmative vote of the holders of a majority in aggregate principal amount ofthe Debt Securities then outstanding; provided, however, that,except as limited by the proviso in the first paragraph of Section 9.02, anyresolution with respect to any consent, waiver, request, demand, notice,authorization, direction or other action that this Indenture expressly providesmay be given by the holders of not less than a specified percentage inoutstanding principal amount of the Debt Securities may be adopted at a meetingor an adjourned meeting duly reconvened and at which a quorum is present as aforesaidonly by the

 

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affirmative vote of the holders of not less than suchspecified percentage in aggregate principal amount of the Debt Securities thenoutstanding.

 

Any resolution passed or decision taken at any meeting of holders ofDebt Securities duly held in accordance with this Section shall be binding onall the Securityholders, whether or not present or represented at the meeting.

 

# ARTICLE IXSUPPLEMENTAL INDENTURES

#  

## Section 9.01                                                        SupplementalIndentures without Consent of Securityholders.

##  

The Company, when authorized by a Board Resolution, and the Trustee mayfrom time to time and at any time enter into an indenture or indenturessupplemental hereto, without the consent of the Securityholders, for one ormore of the following purposes:

 

### (a)                                  toevidence the succession of another corporation to the Company, or successivesuccessions, and the assumption by the successor corporation of the covenants,agreements and obligations of the Company, pursuant to Article XI hereof;

###  

### (b)                                 toadd to the covenants of the Company such further covenants, restrictions orconditions for the protection of the holders of Debt Securities as the Board ofDirectors shall consider to be for the protection of the holders of such DebtSecurities, and to make the occurrence, or the occurrence and continuance, of aDefault in any of such additional covenants, restrictions or conditions aDefault or an Event of Default permitting the enforcement of all or any of theseveral remedies provided in this Indenture as herein set forth; provided,however, that in respect of any such additional covenant, restriction orcondition such supplemental indenture may provide for a particular period ofgrace after Default (which period may be shorter or longer than that allowed inthe case of other Defaults) or may provide for an immediate enforcement uponsuch Default or may limit the remedies available to the Trustee upon suchdefault;

###  

### (c)                                  tocure any ambiguity or to correct or supplement any provision contained hereinor in any supplemental indenture which may be defective or inconsistent withany other provision contained herein or in any supplemental indenture, or tomake such other provisions in regard to matters or questions arising under thisIndenture, provided, that any such action shall not adversely affect theinterests of the holders of the Debt Securities then outstanding;

###  

### (d)                                 toadd to, delete from, or revise the terms of Debt Securities, including, withoutlimitation, any terms relating to the issuance, exchange, registration ortransfer of Debt Securities, including to provide for transfer procedures andrestrictions substantially similar to those applicable to the CapitalSecurities, as required by Section 2.05 (for purposes of assuring that noregistration of Debt Securities is required under the Securities Act), provided,that any such action shall not adversely affect the interests of the holders ofthe Debt Securities then outstanding (it being understood, for purposes of thisproviso, that transfer restrictions on Debt Securities substantially similar tothose applicable to Capital Securities shall not be deemed to adversely affectthe holders of the Debt Securities);

 

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###  

### (e)                                  toevidence and provide for the acceptance of appointment hereunder by a successorTrustee with respect to the Debt Securities and to add to or change any of theprovisions of this Indenture as shall be necessary to provide for or facilitatethe administration of the trusts hereunder by more than one Trustee, pursuantto the requirements of Section 6.10;

###  

### (f)                                    tomake any change (other than as elsewhere provided in this Section) that doesnot adversely affect the rights of any Securityholder in any material respect;or

###  

### (g)                                 toprovide for the issuance of and establish the form and terms and conditions ofthe Debt Securities, to establish the form of any certifications required to befurnished pursuant to the terms of this Indenture or the Debt Securities, or toadd to the rights of the holders of Debt Securities.

###  

The Trustee is hereby authorized to join with the Company in theexecution of any such supplemental indenture, to make any further appropriateagreements and stipulations which may be therein contained and to accept theconveyance, transfer and assignment of any property thereunder, but the Trusteeshall not be obligated to, but may in its discretion, enter into any suchsupplemental indenture which affects the Trustee’s own rights, duties orimmunities under this Indenture or otherwise.

 

Any supplemental indenture authorized by the provisions of this Sectionmay be executed by the Company and the Trustee without the consent of theholders of any of the Debt Securities at the time outstanding, notwithstandingany of the provisions of Section 9.02.

 

## Section 9.02                                                        SupplementalIndentures with Consent of Securityholders.

##  

With the consent (evidenced as provided in Section 7.01) of the holdersof a majority in aggregate principal amount of the Debt Securities at the timeoutstanding affected by such supplemental indenture (voting as a class), theCompany, when authorized by a Board Resolution, and the Trustee may from timeto time and at any time enter into an indenture or indentures supplementalhereto (which shall conform to the provisions of the Trust Indenture Act, thenin effect, applicable to indentures qualified thereunder) for the purpose ofadding any provisions to or changing in any manner or eliminating any of theprovisions of this Indenture or of any supplemental indenture or of modifyingin any manner the rights of the holders of the Debt Securities; provided,however, that no such supplemental indenture shall, without the consentof the holders of each Debt Security then outstanding and affected thereby, (i)change the Maturity Date of any Debt Security, or reduce the principal amountthereof or any premium thereon, or reduce the rate (or manner of calculation ofthe rate) or extend the time of payment of interest thereon, or reduce (otherthan as a result of the maturity or earlier redemption of any such DebtSecurity in accordance with the terms of this Indenture and such Debt Security)or increase the aggregate principal amount of Debt Securities then outstanding,or change any of the redemption provisions, or make the principal thereof orany interest or premium thereon payable in any coin or currency other thanUnited States Dollars, or impair or affect the right of any Securityholder toinstitute suit for payment thereof, or (ii) reduce the aforesaid percentage ofDebt Securities the holders of which are required to consent to any suchsupplemental indenture; and provided, further, that if the DebtSecurities are held by the Trust or the trustee of the Trust, such supplementalindenture shall not be effective until the holders of a majority in aggregate

 

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liquidation amount of the outstanding CapitalSecurities shall have consented to such supplemental indenture; provided,further, that if the consent of the Securityholder of each outstandingDebt Security is required, such supplemental indenture shall not be effectiveuntil each holder of the outstanding Capital Securities shall have consented tosuch supplemental indenture.

 

Upon the request of the Company accompanied by a Board Resolutionauthorizing the execution of any such supplemental indenture, and upon thefiling with the Trustee of evidence of the consent of Securityholders asaforesaid, the Trustee shall join with the Company in the execution of suchsupplemental indenture unless such supplemental indenture affects the Trustee’sown rights, duties or immunities under this Indenture or otherwise, in whichcase the Trustee may in its discretion, but shall not be obligated to, enterinto such supplemental indenture.

 

Promptly after the execution by the Company and the Trustee of anysupplemental indenture pursuant to the provisions of this Section, the Trusteeshall transmit by mail, first class postage prepaid, a notice, prepared by theCompany, setting forth in general terms the substance of such supplementalindenture, to the Securityholders as their names and addresses appear upon theDebt Security Register.  Any failure ofthe Trustee to mail such notice, or any defect therein, shall not, however, inany way impair or affect the validity of any such supplemental indenture.

 

It shall not be necessary for the consent of the Securityholders underthis Section to approve the particular form of any proposed supplementalindenture, but it shall be sufficient if such consent shall approve thesubstance thereof.

 

## Section 9.03                                                        Effectof Supplemental Indentures.

##  

Upon the execution of any supplemental indenture pursuant to theprovisions of this Article IX, this Indenture shall be and be deemed to be modifiedand amended in accordance therewith and the respective rights, limitations ofrights, obligations, duties and immunities under this Indenture of the Trustee,the Company and the holders of Debt Securities shall thereafter be determined,exercised and enforced hereunder subject in all respects to such modificationsand amendments and all the terms and conditions of any such supplementalindenture shall be and be deemed to be part of the terms and conditions of thisIndenture for any and all purposes.

 

## Section 9.04                                                        Notationon Debt Securities.

##  

Debt Securities authenticated and delivered after the execution of anysupplemental indenture pursuant to the provisions of this Article IX may bear anotation as to any matter provided for in such supplemental indenture.  If the Company or the Trustee shall sodetermine, new Debt Securities so modified as to conform, in the opinion of theBoard of Directors of the Company, to any modification of this Indenturecontained in any such supplemental indenture may be prepared and executed bythe Company, authenticated by the Trustee or the Authenticating Agent anddelivered in exchange for the Debt Securities then outstanding.

 

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## Section 9.05                                                        Evidenceof Compliance of Supplemental Indenture to be Furnished to Trustee.

##  

The Trustee, subject to the provisions of Sections 6.01 and 6.02,shall, in addition to the documents required by Section 14.06, receive anOfficers’ Certificate as conclusive evidence that any supplemental indentureexecuted pursuant hereto complies with the requirements of this ArticleIX.  The Trustee shall also receive anOpinion of Counsel as conclusive evidence that any supplemental indentureexecuted pursuant to this Article IX is authorized or permitted by, andconforms to, the terms of this Article IX and that it is proper for the Trusteeunder the provisions of this Article IX to join in the execution thereof.

 

# ARTICLE XREDEMPTION OF SECURITIES

#  

## Section 10.01                                                  OptionalRedemption.

##  

The Company shall have the right, subject to the receipt by the Companyof the prior approval from the OTS, if then required under applicable capitalguidelines or policies of the OTS, to redeem the Debt Securities, in whole or(provided that all accrued and unpaid interest has been paid on all DebtSecurities for all Interest Periods terminating on or prior to such date) fromtime to time in part, on any Interest Payment Date on or after October 8,2008 (each, an “Optional Redemption Date”), at the Optional Redemption Price.

 

## Section 10.02                                                  SpecialEvent Redemption.

##  

If a Special Event shall occur and be continuing, the Company shallhave the right, subject to the receipt by the Company of prior approval fromthe OTS, if then required under applicable capital guidelines or policies ofthe OTS, to redeem the Debt Securities, in whole but not in part, at any timewithin 90 days following the occurrence of such Special Event (the “SpecialRedemption Date”), at the Special Redemption Price.  In the event that the Special Redemption Date falls on a dayprior to the LIBOR Determination Date for any Interest Period, then the Companyshall be required to pay to Securityholders, on the Business Day following suchLIBOR Determination Date, any additional amount of interest that would havebeen payable on the Special Redemption Date had the amount of interestdetermined on such LIBOR Determination Date been known on the first day of suchInterest Period.

 

## Section 10.03                                                  Noticeof Redemption; Selection of Debt Securities.

##  

In case the Company shall desire to exercise the right to redeem all,or, as the case may be, any part of the Debt Securities, it shall fix a datefor redemption and shall mail, or cause the Trustee to mail (at the expense ofthe Company), a notice of such redemption at least 30 and not more than 60 daysprior to the date fixed for redemption to the holders of Debt Securities so tobe redeemed as a whole or in part at their last addresses as the same appear onthe Debt Security Register.  Suchmailing shall be by first class mail. The notice if mailed in the manner herein provided shall be conclusivelypresumed to have been duly given, whether or not the holder receives suchnotice.  In any case, failure to givesuch notice by mail or any defect in the notice to the holder of any DebtSecurity designated for redemption as a whole or in part shall not affect thevalidity of the proceedings for the redemption of any other Debt Security.

 

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Each such notice of redemption shall specify the CUSIP number, if any,of the Debt Securities to be redeemed, the date fixed for redemption, the priceat which Debt Securities are to be redeemed, the place or places of payment,that payment will be made upon presentation and surrender of such DebtSecurities, that interest accrued to the date fixed for redemption will be paidas specified in said notice, and that on and after said date interest thereonor on the portions thereof to be redeemed will cease to accrue. If less thanall the Debt Securities are to be redeemed, the notice of redemption shallspecify the numbers of the Debt Securities to be redeemed.  In case the Debt Securities are to beredeemed in part only, the notice of redemption shall state the portion of theprincipal amount thereof to be redeemed and shall state that on and after thedate fixed for redemption, upon surrender of such Debt Security, a new DebtSecurity or Debt Securities in principal amount equal to the unredeemed portionthereof will be issued.

 

Prior to 10:00 a.m., New York City time, on the Optional RedemptionDate or the Special Redemption Date specified in the notice of redemption givenas provided in this Section, the Company will deposit with the Trustee or withone or more Paying Agents an amount of money sufficient to redeem on such dateall the Debt Securities so called for redemption at the applicable pricetherefor, together with unpaid interest accrued to such date.

 

The Company will give the Trustee notice not less than 45 nor more than75 days prior to the date fixed for redemption as to the price at which theDebt Securities are to be redeemed and the aggregate principal amount of DebtSecurities to be redeemed and the Trustee shall select, in such manner as inits sole discretion it shall deem appropriate and fair, the Debt Securities orportions thereof (in integral multiples of $1,000) to be redeemed.

 

## Section 10.04                                                  Paymentof Debt Securities Called for Redemption.

##  

If notice of redemption has been given as provided in Section 10.03,the Debt Securities or portions of Debt Securities with respect to which suchnotice has been given shall become due and payable on the related OptionalRedemption Date or Special Redemption Date (as the case may be) and at theplace or places stated in such notice at the applicable price therefor,together with unpaid interest accrued thereon to said Optional Redemption Dateor the Special Redemption Date (as the case may be), and on and after saidOptional Redemption Date or the Special Redemption Date (as the case may be)(unless the Company shall default in the payment of such Debt Securities at theredemption price, together with unpaid interest accrued thereon to said date)interest on the Debt Securities or portions of Debt Securities so called forredemption shall cease to accrue.  Onpresentation and surrender of such Debt Securities at a place of paymentspecified in said notice, such Debt Securities or the specified portionsthereof shall be paid and redeemed by the Company at the applicable pricetherefor, together with unpaid interest accrued thereon to said OptionalRedemption Date or the Special Redemption Date (as the case may be).

 

Upon presentation of any Debt Security redeemed in part only, theCompany shall execute and the Trustee shall authenticate and make available fordelivery to the holder thereof, at the expense of the Company, a new DebtSecurity or Debt Securities of authorized denominations in principal amountequal to the unredeemed portion of the Debt Security so presented.

 

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# ARTICLE XICONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

#  

## Section 11.01                                                  CompanyMay Consolidate, etc., on Certain Terms.

##  

Nothing contained in this Indenture or in the Debt Securities shallprevent any consolidation or merger of the Company with or into any othercorporation or corporations (whether or not affiliated with the Company) orsuccessive consolidations or mergers in which the Company or its successor orsuccessors shall be a party or parties, or shall prevent any sale, conveyance,transfer or other disposition of all or substantially all of the property orcapital stock of the Company or its successor or successors to any othercorporation (whether or not affiliated with the Company, or its successor orsuccessors) authorized to acquire and operate the same; provided, however,that the Company hereby covenants and agrees that (i) upon any suchconsolidation, merger (where the Company is not the surviving corporation),sale, conveyance, transfer or other disposition, the successor entity shall bea corporation organized and existing under the laws of the United States or anystate thereof or the District of Columbia (unless such corporation has (1)agreed to make all payments due in respect of the Debt Securities or, ifoutstanding, the Trust Securities and the Capital Securities Guarantee withoutwithholding or deduction for, or on account of, any taxes, duties, assessmentsor other governmental charges under the laws or regulations of the jurisdictionof organization or residence (for tax purposes) of such corporation or anypolitical subdivision or taxing authority thereof or therein unless required byapplicable law, in which case such corporation shall have agreed to pay suchadditional amounts as shall be required so that the net amounts received andretained by the holders of such Debt Securities or Trust Securities, as thecase may be, after payment of all taxes (including withholding taxes), duties,assessments or other governmental charges, will be equal to the amounts thatsuch holders would have received and retained had no such taxes (includingwithholding taxes), duties, assessments or other governmental charges beenimposed, (2) irrevocably and unconditionally consented and submitted to thejurisdiction of any United States federal court or New York state court, ineach case located in the Borough of Manhattan, The City of New York, in respectof any action, suit or proceeding against it arising out of or in connectionwith this Indenture or the Debt Securities and irrevocably and unconditionallywaived, to the fullest extent permitted by law, any objection to the laying ofvenue in any such court or that any such action, suit or proceeding has beenbrought in an inconvenient forum and (3) irrevocably appointed an agent in TheCity of New York for service of process in any action, suit or proceedingreferred to in clause (2) above) and such corporation expressly assumes all ofthe obligations of the Company under the Debt Securities, this Indenture, the CapitalSecurities Guarantee and the Declaration and (ii) after giving effect toany such consolidation, merger, sale, conveyance, transfer or otherdisposition, no Default or Event of Default shall have occurred and becontinuing.

 

## Section 11.02                                                  SuccessorEntity to be Substituted.

##  

In case of any such consolidation, merger, sale, conveyance, transferor other disposition and upon the assumption by the successor corporation, bysupplemental indenture, executed and delivered to the Trustee and reasonablysatisfactory in form to the Trustee, of the due and punctual payment of theprincipal of and premium, if any, and interest on all of the Debt Securitiesand the due and punctual performance and observance of all of the covenants and

 

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conditions of this Indenture to be performed orobserved by the Company, such successor corporation shall succeed to and besubstituted for the Company, with the same effect as if it had been namedherein as the Company, and thereupon the predecessor entity shall be relievedof any further liability or obligation hereunder or upon the DebtSecurities.  Such successor corporationthereupon may cause to be signed, and may issue either in its own name or inthe name of the Company, any or all of the Debt Securities issuable hereunderwhich theretofore shall not have been signed by the Company and delivered tothe Trustee or the Authenticating Agent; and, upon the order of such successorcorporation instead of the Company and subject to all the terms, conditions andlimitations in this Indenture prescribed, the Trustee or the AuthenticatingAgent shall authenticate and deliver any Debt Securities which previously shallhave been signed and delivered by the officers of the Company to the Trustee orthe Authenticating Agent for authentication, and any Debt Securities which suchsuccessor corporation thereafter shall cause to be signed and delivered to theTrustee or the Authenticating Agent for that purpose.  All the Debt Securities so issued shall in all respects have thesame legal rank and benefit under this Indenture as the Debt Securitiestheretofore or thereafter issued in accordance with the terms of this Indentureas though all of such Debt Securities had been issued at the date of theexecution hereof.

 

## Section 11.03                                                  Opinionof Counsel to be Given to Trustee.

##  

The Trustee, subject to the provisions of Sections 6.01 and 6.02, shallreceive, in addition to the Opinion of Counsel required by Section 9.05, anOpinion of Counsel as conclusive evidence that any consolidation, merger, sale,conveyance, transfer or other disposition, and any assumption, permitted orrequired by the terms of this Article XI complies with the provisions of thisArticle XI.

 

# ARTICLE XIISATISFACTION AND DISCHARGE OF INDENTURE

#  

## Section 12.01                                                  Dischargeof Indenture.

##  

When (a) the Company shall deliver to the Trustee for cancellation allDebt Securities theretofore authenticated (other than any Debt Securities whichshall have been destroyed, lost or stolen and which shall have been replaced orpaid as provided in Section 2.06) and not theretofore canceled, or (b) all theDebt Securities not theretofore canceled or delivered to the Trustee forcancellation shall have become due and payable, or are by their terms to becomedue and payable within one year or are to be called for redemption within oneyear under arrangements satisfactory to the Trustee for the giving of notice ofredemption, and the Company shall deposit with the Trustee, in trust, funds,which shall be immediately due and payable, sufficient to pay at maturity orupon redemption all of the Debt Securities (other than any Debt Securitieswhich shall have been destroyed, lost or stolen and which shall have beenreplaced or paid as provided in Section 2.06) not theretofore canceled ordelivered to the Trustee for cancellation, including principal and premium, ifany, and interest due or to become due to the Maturity Date, any OptionalRedemption Date or the Special Redemption Date, as the case may be, but excluding,however, the amount of any moneys for the payment of principal of and premium,if any, or interest on the Debt Securities (1) theretofore repaid to theCompany in accordance with the provisions of Section 12.04, or (2) paid to anystate or to the District of

 

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Columbia pursuant to its unclaimed property or similarlaws, and if in the case of either clause (a) or (b) above the Company shallalso pay or cause to be paid all other sums payable hereunder by the Company,then this Indenture shall cease to be of further effect except for theprovisions of Sections 2.05, 2.06, 3.01, 3.02, 3.04, 6.06, 6.09 and 12.04hereof, which shall survive until such Debt Securities shall mature or areredeemed, as the case may be, and are paid in full.  Thereafter, Sections 6.06, 6.09 and 12.04 shall survive, and theTrustee, on demand of the Company accompanied by an Officers’ Certificate andan Opinion of Counsel, each stating that all conditions precedent herein providedfor relating to the satisfaction and discharge of this Indenture have beencomplied with, and at the cost and expense of the Company, shall execute properinstruments acknowledging satisfaction of and discharging this Indenture, theCompany, however, hereby agreeing to reimburse the Trustee for any costs orexpenses thereafter reasonably and properly incurred by the Trustee inconnection with this Indenture or the Debt Securities.

 

## Section 12.02                                                  DepositedMoneys to be Held in Trust by Trustee.

##  

Subject to the provisions of Section 12.04, all moneys deposited withthe Trustee pursuant to Section 12.01 shall be held in trust and applied by itto the payment, either directly or through any Paying Agent (including theCompany if acting as its own Paying Agent), to the holders of the particularDebt Securities for the payment of which such moneys have been deposited withthe Trustee, of all sums due and to become due thereon for principal, premium,if any, and interest.

 

## Section 12.03                                                  PayingAgent to Repay Moneys Held.

##  

Upon the satisfaction and discharge of this Indenture, all moneys thenheld by any Paying Agent of the Debt Securities (other than the Trustee) shall,upon demand of the Company, be repaid to the Company or paid to the Trustee,and thereupon such Paying Agent shall be released from all further liabilitywith respect to such moneys.

 

## Section 12.04                                                  Returnof Unclaimed Moneys.

##  

Any moneys deposited with or paid to the Trustee or any Paying Agentfor payment of the principal of and premium, if any, or interest on DebtSecurities and not applied but remaining unclaimed by the holders of DebtSecurities for two years after the date upon which the principal of andpremium, if any, or interest on such Debt Securities, as the case may be, shallhave become due and payable, shall be repaid to the Company by the Trustee orsuch Paying Agent on written demand; and the holder of any of the DebtSecurities shall thereafter look only to the Company for any payment which suchholder may be entitled to collect and all liability of the Trustee or suchPaying Agent with respect to such moneys shall thereupon cease.

 

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# ARTICLE XIIIIMMUNITY OF INCORPORATORS, STOCKHOLDERS,OFFICERS AND DIRECTORS

#  

## Section 13.01                                                  Indentureand Debt Securities Solely Corporate Obligations.

##  

No recourse for the payment of the principal of or premium, if any, orinterest on any Debt Security, or for any claim based thereon or otherwise inrespect thereof, and no recourse under or upon any obligation, covenant oragreement of the Company in this Indenture or in any supplemental indenture, orin any such Debt Security, or because of the creation of any indebtednessrepresented thereby, shall be had against any incorporator, stockholder, officer,director, employee or agent, as such, past, present or future, of the Companyor of any predecessor or successor corporation of the Company, either directlyor through the Company or any successor corporation of the Company, whether byvirtue of any constitution, statute or rule of law, or by the enforcement ofany assessment or penalty or otherwise; it being expressly understood that allsuch liability is hereby expressly waived and released as a condition of, andas a consideration for, the execution of this Indenture and the issue of theDebt Securities.

 

# ARTICLE XIVMISCELLANEOUS PROVISIONS

#  

## Section 14.01                                                  Successors.

##  

All the covenants, stipulations, promises and agreements of the Companycontained in this Indenture shall bind its successors and assigns, whether soexpressed or not.

 

## Section 14.02                                                  OfficialActs by Successor Entity.

##  

Any act or proceeding by any provision of this Indenture authorized orrequired to be done or performed by any board, committee or officer of theCompany shall and may be done and performed with like force and effect by thelike board, committee, officer or other authorized Person of any entity thatshall at the time be the lawful successor of the Company.

 

## Section 14.03                                                  Surrenderof Company Powers.

##  

The Company, by instrument in writing executed by authority of 2/3 (twothirds) of its Board of Directors and delivered to the Trustee, may surrenderany of the powers reserved to the Company and thereupon such power sosurrendered shall terminate both as to the Company and as to any permittedsuccessor.

 

## Section 14.04                                                  Addressesfor Notices, etc.

##  

Any notice or demand which by any provision of this Indenture isrequired or permitted to be given or served by the Trustee or by theSecurityholders on the Company may be given or served in writing by beingdeposited postage prepaid by registered or certified mail in a post officeletter box addressed (until another address is filed by the Company with theTrustee for such purpose) to the Company at HF Financial Corp., Attention: Pamela F.Russo.  Any notice, direction, requestor demand by any Securityholder or the Company to or upon the

 

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Trustee shall be deemed to have been sufficientlygiven or made, for all purposes, if given or made in writing at the office ofWilmington Trust Company at Rodney Square North, 1100 North Market Street,Wilmington, DE 19890-0001, Attention: Corporate Trust Administration.

 

## Section 14.05                                                  GoverningLaw.

##  

This Indenture and the Debt Securities shall each be governed by, andconstrued in accordance with, the laws of the State of New York, without regardto conflict of laws principles of said State other than Section 5-1401 of theNew York General Obligations Law.

 

## Section 14.06                                                  Evidenceof Compliance with Conditions Precedent.

##  

Upon any application or demand by the Company to the Trustee to takeany action under any of the provisions of this Indenture, the Company shallfurnish to the Trustee an Officers’ Certificate stating that in the opinion ofthe signers all conditions precedent, if any, provided for in this Indenturerelating to the proposed action have been complied with and an Opinion ofCounsel stating that, in the opinion of such counsel, all such conditionsprecedent have been complied with (except that no such Opinion of Counsel isrequired to be furnished to the Trustee in connection with the authenticationand issuance of Debt Securities).

 

Each certificate or opinion provided for in this Indenture anddelivered to the Trustee with respect to compliance with a condition orcovenant provided for in this Indenture (except certificates delivered pursuantto Section 3.05) shall include (a) a statement that the person making suchcertificate or opinion has read such covenant or condition; (b) a brief statementas to the nature and scope of the examination or investigation upon which thestatements or opinions contained in such certificate or opinion are based; (c)a statement that, in the opinion of such person, he or she has made suchexamination or investigation as is necessary to enable him or her to express aninformed opinion as to whether or not such covenant or condition has beencomplied with; and (d) a statement as to whether or not, in the opinion of suchperson, such condition or covenant has been complied with.

 

## Section 14.07                                                  BusinessDay Convention.

##  

Notwithstanding anything to the contrary contained herein, if anyInterest Payment Date, other than the Maturity Date, any Optional RedemptionDate or the Special Redemption Date, falls on a day that is not a Business Day,then any interest payable will be paid on, and such Interest Payment Date willbe moved to, the next succeeding Business Day, and additional interest willaccrue for each day that such payment is delayed as a result thereof.  If the Maturity Date, any OptionalRedemption Date or the Special Redemption Date falls on a day that is not aBusiness Day, then the principal, premium, if any, and/or interest payable onsuch date will be paid on the next succeeding Business Day, and no additionalinterest will accrue in respect of such payment made on such next succeedingBusiness Day.

 

## Section 14.08                                                  Tableof Contents, Headings, etc.

##  

The table of contents and the titles and headings of the Articles andSections of this Indenture have been inserted for convenience of referenceonly, are not to be considered a part hereof, and shall in no way modify orrestrict any of the terms or provisions hereof.

 

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## Section 14.09                                                  Executionin Counterparts.

##  

This Indenture may be executed in any number of counterparts, each ofwhich shall be an original, but such counterparts shall together constitute butone and the same instrument.

 

## Section 14.10                                                  Separability.

##  

In case any one or more of the provisions contained in this Indentureor in the Debt Securities shall for any reason be held to be invalid, illegalor unenforceable in any respect, such invalidity, illegality orunenforceability shall not affect any other provisions of this Indenture or ofsuch Debt Securities, but this Indenture and such Debt Securities shall beconstrued as if such invalid, illegal or unenforceable provision had never beencontained herein or therein.

 

## Section 14.11                                                  Assignment.

##  

Subject to Article XI, the Company will have the right at all times toassign any of its rights or obligations under this Indenture and the DebtSecurities to a direct or indirect wholly owned Subsidiary of the Company; provided,however, that, in the event of any such assignment, the Company willremain liable for all such obligations. Subject to the foregoing, thisIndenture is binding upon and inures to the benefit of the parties hereto andtheir respective successors and assigns. This Indenture may not otherwise beassigned by the parties thereto.

 

## Section 14.12                                                  Acknowledgmentof Rights.

##  

The Company acknowledges that, with respect to any Debt Securities heldby the Trust or a trustee of the Trust, if such trustee of the Trust fails toenforce its rights under this Indenture as the holder of Debt Securities heldas the assets of the Trust after the holders of a majority in aggregateliquidation amount of the outstanding Capital Securities of the Trust have sodirected in writing such trustee, a holder of record of such Capital Securitiesmay, to the fullest extent permitted by law, institute legal proceedingsdirectly against the Company to enforce such trustee’s rights under thisIndenture without first instituting any legal proceedings against such trusteeor any other Person.  Notwithstandingthe foregoing, if an Event of Default has occurred and is continuing and suchevent is attributable to the failure of the Company to pay interest or premium,if any, on or principal of the Debt Securities on the date such interest,premium, if any, or principal is otherwise due and payable (or, in the case ofredemption, on the related Optional Redemption Date or the Special RedemptionDate (as the case may be)), the Company acknowledges that a holder ofoutstanding Capital Securities of the Trust may directly institute a proceedingagainst the Company for enforcement of payment to such holder directly of theprincipal of or premium, if any, or interest on the Debt Securities having anaggregate principal amount equal to the aggregate liquidation amount of theCapital Securities of such holder on or after the respective due date (orOptional Redemption Date or Special Redemption Date (as the case may be))specified in the Debt Securities.

 

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# ARTICLE XVSUBORDINATION OF DEBT SECURITIES

#  

## Section 15.01                                                  Agreementto Subordinate.

##  

The Company covenants and agrees, and each holder of Debt Securitiesissued hereunder and under any supplemental indenture (the “AdditionalProvisions”) by such holder’s acceptance thereof likewise covenants and agrees,that all Debt Securities shall be issued subject to the provisions of thisArticle XV; and each holder of a Debt Security, whether upon original issue orupon transfer or assignment thereof, accepts and agrees to be bound by such provisions.

 

The payment by the Company of the payments due on all Debt Securitiesissued hereunder and under any Additional Provisions shall, to the extent andin the manner hereinafter set forth, be subordinated and junior in right ofpayment to the prior payment in full of all Senior Indebtedness of the Company,whether outstanding at the date of this Indenture or thereafter incurred.

 

No provision of this Article XV shall prevent the occurrence of anydefault or Event of Default hereunder.

 

## Section 15.02                                                  Defaulton Senior Indebtedness.

##  

In the event and during the continuation of any default by the Companyin the payment of principal, premium, interest or any other payment due on anySenior Indebtedness of the Company following any applicable grace period, or inthe event that the maturity of any Senior Indebtedness of the Company has beenaccelerated because of a default, and such acceleration has not been rescindedor canceled and such Senior Indebtedness has not been paid in full, then, ineither case, no payment shall be made by the Company with respect to thepayments due on the Debt Securities.

 

In the event that, notwithstanding the foregoing, any payment shall bereceived by the Trustee when such payment is prohibited by the precedingparagraph of this Section, such payment shall, subject to Section 15.06, beheld in trust for the benefit of, and shall be paid over or delivered to, theholders of Senior Indebtedness or their respective representatives, or to thetrustee or trustees under any indenture pursuant to which any of such SeniorIndebtedness may have been issued, as their respective interests may appear,but only to the extent that the holders of the Senior Indebtedness (or theirrepresentative or representatives or trustee) notify the Trustee in writingwithin 90 days of such payment of the amounts then due and owing on the SeniorIndebtedness and only the amounts specified in such notice to the Trustee shallbe paid to the holders of Senior Indebtedness.

 

## Section 15.03                                                  Liquidation;Dissolution; Bankruptcy.

##  

Upon any payment by the Company or distribution of assets of theCompany of any kind or character, whether in cash, property or securities, tocreditors upon any dissolution, winding-up, liquidation or reorganization ofthe Company, whether voluntary or involuntary or in bankruptcy, insolvency,receivership or other proceedings, all amounts due upon all Senior Indebtednessof the Company shall first be paid in full, or payment thereof provided for in

 

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money in accordance with its terms, before any paymentis made by the Company on the Debt Securities; and upon any such dissolution,winding-up, liquidation or reorganization, any payment by the Company, ordistribution of assets of the Company of any kind or character, whether incash, property or securities, to which the Securityholders or the Trustee wouldbe entitled to receive from the Company, except for the provisions of thisArticle XV, shall be paid by the Company, or by any receiver, trustee inbankruptcy, liquidating trustee, agent or other Person making such payment ordistribution, or by the Securityholders or by the Trustee under this Indentureif received by them or it, directly to the holders of Senior Indebtedness ofthe Company (pro rata to such holders on the basis of the respective amounts ofSenior Indebtedness held by such holders, as calculated by the Company) ortheir representative or representatives, or to the trustee or trustees underany indenture pursuant to which any instruments evidencing such SeniorIndebtedness may have been issued, as their respective interests may appear, tothe extent necessary to pay such Senior Indebtedness in full, in money ormoney’s worth, after giving effect to any concurrent payment or distribution toor for the holders of such Senior Indebtedness, before any payment ordistribution is made to the Securityholders.

 

In the event that, notwithstanding the foregoing, any payment ordistribution of assets of the Company of any kind or character, whether incash, property or securities, prohibited by the foregoing shall be received bythe Trustee before all Senior Indebtedness of the Company is paid in full, orprovision is made for such payment in money in accordance with its terms, suchpayment or distribution shall be held in trust for the benefit of, and shall bepaid over or delivered to, the holders of such Senior Indebtedness or theirrepresentative or representatives, or to the trustee or trustees under anyindenture pursuant to which any instruments evidencing such Senior Indebtednessmay have been issued, as their respective interests may appear, as calculatedby the Company, for application to the payment of all Senior Indebtedness ofthe Company remaining unpaid to the extent necessary to pay such SeniorIndebtedness in full in money in accordance with its terms, after giving effectto any concurrent payment or distribution to or for the benefit of the holdersof such Senior Indebtedness.

 

For purposes of this Article XV, the words “cash, property orsecurities” shall not be deemed to include shares of stock of the Company asreorganized or readjusted, or securities of the Company or any othercorporation provided for by a plan of reorganization or readjustment, thepayment of which is subordinated at least to the extent provided in thisArticle XV with respect to the Debt Securities to the payment of all SeniorIndebtedness of the Company, that may at the time be outstanding, provided,that (a) such Senior Indebtedness is assumed by the new corporation, if any,resulting from any such reorganization or readjustment, and (b) the rights ofthe holders of such Senior Indebtedness are not, without the consent of suchholders, altered by such reorganization or readjustment.  The consolidation of the Company with, orthe merger of the Company into, another corporation or the liquidation ordissolution of the Company following the conveyance, transfer or otherdisposition of its property as an entirety, or substantially as an entirety, toanother corporation upon the terms and conditions provided for in Article XI ofthis Indenture shall not be deemed a dissolution, winding-up, liquidation orreorganization for the purposes of this Section if such other corporationshall, as a part of such consolidation, merger, conveyance or transfer, complywith the conditions stated in Article XI of this Indenture.  Nothing in Section 15.02 or in this Sectionshall apply to claims of, or payments to, the Trustee under or pursuant toSection 6.06 of this Indenture.

 

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## Section 15.04                                                  Subrogation.

##  

Subject to the payment in full of all Senior Indebtedness of theCompany, the Securityholders shall be subrogated to the rights of the holdersof such Senior Indebtedness to receive payments or distributions of cash,property or securities of the Company applicable to such Senior Indebtednessuntil all payments due on the Debt Securities shall be paid in full; and, forthe purposes of such subrogation, no payments or distributions to the holdersof such Senior Indebtedness of any cash, property or securities to which theSecurityholders or the Trustee would be entitled except for the provisions ofthis Article XV, and no payment over pursuant to the provisions of this ArticleXV to or for the benefit of the holders of such Senior Indebtedness bySecurityholders or the Trustee, shall, as between the Company, its creditorsother than holders of Senior Indebtedness of the Company, and the holders ofthe Debt Securities be deemed to be a payment or distribution by the Company toor on account of such Senior Indebtedness. It is understood that the provisions of this Article XV are, and areintended, solely for the purposes of defining the relative rights of theholders of the Debt Securities, on the one hand, and the holders of such SeniorIndebtedness, on the other hand.

 

Nothing contained in this Article XV or elsewhere in this Indenture,any Additional Provisions or in the Debt Securities is intended to or shallimpair, as between the Company, its creditors other than the holders of SeniorIndebtedness of the Company, and the holders of the Debt Securities, theobligation of the Company, which is absolute and unconditional, to pay to theholders of the Debt Securities all payments on the Debt Securities as and whenthe same shall become due and payable in accordance with their terms, or isintended to or shall affect the relative rights of the holders of the DebtSecurities and creditors of the Company other than the holders of SeniorIndebtedness of the Company, nor shall anything herein or therein prevent theTrustee or the holder of any Debt Security from exercising all remediesotherwise permitted by applicable law upon default under this Indenture,subject to the rights, if any, under this Article XV of the holders of suchSenior Indebtedness in respect of cash, property or securities of the Companyreceived upon the exercise of any such remedy.

 

Upon any payment or distribution of assets of the Company referred toin this Article XV, the Trustee, subject to the provisions of Article VI ofthis Indenture, and the Securityholders shall be entitled to conclusively relyupon any order or decree made by any court of competent jurisdiction in whichsuch dissolution, winding-up, liquidation or reorganization proceedings arepending, or a certificate of the receiver, trustee in bankruptcy, liquidationtrustee, agent or other Person making such payment or distribution, deliveredto the Trustee or to the Securityholders, for the purposes of ascertaining thePersons entitled to participate in such distribution, the holders of SeniorIndebtedness and other indebtedness of the Company, the amount thereof orpayable thereon, the amount or amounts paid or distributed thereon and allother facts pertinent thereto or to this Article XV.

 

## Section 15.05                                                  Trusteeto Effectuate Subordination.

##  

Each Securityholder, by such Securityholder’s acceptance thereof,authorizes and directs the Trustee on such Securityholder’s behalf to take suchaction as may be necessary or appropriate to effectuate the subordinationprovided in this Article XV and appoints the Trustee such Securityholder’sattorney-in-fact for any and all such purposes.

 

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## Section 15.06                                                  Noticeby the Company.

##  

The Company shall give prompt written notice to a Responsible Officerof the Trustee at the Principal Office of the Trustee of any fact known to theCompany that would prohibit the making of any payment of moneys to or by theTrustee in respect of the Debt Securities pursuant to the provisions of thisArticle XV.  Notwithstanding theprovisions of this Article XV or any other provision of this Indenture or anyAdditional Provisions, the Trustee shall not be charged with knowledge of theexistence of any facts that would prohibit the making of any payment of moneysto or by the Trustee in respect of the Debt Securities pursuant to theprovisions of this Article XV unless and until a Responsible Officer of theTrustee at the Principal Office of the Trustee shall have received writtennotice thereof from the Company or a holder or holders of Senior Indebtednessor from any trustee therefor; and before the receipt of any such writtennotice, the Trustee, subject to the provisions of Article VI of this Indenture,shall be entitled in all respects to assume that no such facts exist; provided,however, that if the Trustee shall not have received the notice providedfor in this Section at least two Business Days prior to the date upon which bythe terms hereof any money may become payable for any purpose (including,without limitation, the payment of the principal of or premium, if any, orinterest on any Debt Security), then, anything herein contained to the contrarynotwithstanding, the Trustee shall have full power and authority to receivesuch money and to apply the same to the purposes for which they were received,and shall not be affected by any notice to the contrary that may be received byit within two Business Days prior to such date.

 

The Trustee, subject to the provisions of Article VI of this Indenture,shall be entitled to conclusively rely on the delivery to it of a writtennotice by a Person representing himself or herself to be a holder of SeniorIndebtedness of the Company (or a trustee or representative on behalf of suchholder) to establish that such notice has been given by a holder of such SeniorIndebtedness or a trustee or representative on behalf of any such holder orholders.  In the event that the Trusteedetermines in good faith that further evidence is required with respect to theright of any Person as a holder of such Senior Indebtedness to participate inany payment or distribution pursuant to this Article XV, the Trustee mayrequest such Person to furnish evidence to the reasonable satisfaction of theTrustee as to the amount of such Senior Indebtedness held by such Person, theextent to which such Person is entitled to participate in such payment ordistribution and any other facts pertinent to the rights of such Person underthis Article XV, and, if such evidence is not furnished, the Trustee may deferany payment to such Person pending judicial determination as to the right ofsuch Person to receive such payment.

 

## Section 15.07                                                  Rightsof the Trustee; Holders of Senior Indebtedness.

##  

The Trustee, in its individual capacity, shall be entitled to all therights set forth in this Article XV in respect of any Senior Indebtedness atany time held by it, to the same extent as any other holder of SeniorIndebtedness, and nothing in this Indenture or any Additional Provisions shalldeprive the Trustee of any of its rights as such holder.

 

With respect to the holders of Senior Indebtedness of the Company, theTrustee undertakes to perform or to observe only such of its covenants and obligationsas are specifically set forth in this Article XV, and no implied covenants orobligations with respect to the holders of such Senior Indebtedness shall beread into this Indenture or any Additional Provisions against

 

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the Trustee. The Trustee shall not owe or be deemed to owe any fiduciary duty to theholders of such Senior Indebtedness and, subject to the provisions of ArticleVI of this Indenture, the Trustee shall not be liable to any holder of suchSenior Indebtedness if it shall pay over or deliver to Securityholders, theCompany or any other Person money or assets to which any holder of such SeniorIndebtedness shall be entitled by virtue of this Article XV or otherwise.

 

Nothing in this Article XV shall apply to claims of, or payments to,the Trustee under or pursuant to Section 6.06.

 

## Section 15.08                                                  SubordinationMay Not Be Impaired.

##  

No right of any present or future holder of any Senior Indebtedness ofthe Company to enforce subordination as herein provided shall at any time inany way be prejudiced or impaired by any act or failure to act on the part ofthe Company, or by any act or failure to act, in good faith, by any suchholder, or by any noncompliance by the Company, with the terms, provisions andcovenants of this Indenture, regardless of any knowledge thereof that any suchholder may have or otherwise be charged with.

 

Without in any way limiting the generality of the foregoing paragraph,the holders of Senior Indebtedness of the Company may, at any time and fromtime to time, without the consent of or notice to the Trustee or theSecurityholders, without incurring responsibility to the Securityholders andwithout impairing or releasing the subordination provided in this Article XV orthe obligations hereunder of the holders of the Debt Securities to the holdersof such Senior Indebtedness, do any one or more of the following: (a) changethe manner, place or terms of payment or extend the time of payment of, orrenew or alter, such Senior Indebtedness, or otherwise amend or supplement inany manner such Senior Indebtedness or any instrument evidencing the same orany agreement under which such Senior Indebtedness is outstanding; (b) sell,exchange, release or otherwise deal with any property pledged, mortgaged orotherwise securing such Senior Indebtedness; (c) release any Person liable inany manner for the collection of such Senior Indebtedness; and (d) exercise orrefrain from exercising any rights against the Company or any other Person.

 

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Wilmington Trust Company, in its capacity as Trustee, hereby acceptsthe trusts in this Indenture declared and provided, upon the terms andconditions herein above set forth.

 

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to beduly executed by their respective officers thereunto duly authorized, as of theday and year first above written.

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

 

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EXHIBITA

 

FORM OF DEBT SECURITY

 

[FORM OF FACE OFSECURITY]

 

**THISSECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLESECURITIES LAWS.  NEITHER THIS SECURITYNOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OFSUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.  THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATIONHEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES TOOFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST ORPARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO YEARS (ORSUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) OF THE SECURITIES ACT)AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE LASTDATE ON WHICH THE COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THESECURITIES ACT) OF THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH INTERESTOR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE, IF ANY,AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO THECOMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO APERSON THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER”, ASDEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OFA QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER ISBEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION FROM THE REGISTRATIONREQUIREMENTS OF THE SECURITIES ACT TO AN “ACCREDITED INVESTOR” WITHIN THEMEANING OF SUBPARAGRAPH (a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’S RIGHT PRIOR TO ANY SUCH OFFER, SALE ORTRANSFER PURSUANT TO CLAUSE (C), (D) OR (E) ABOVE TO REQUIRE THE DELIVERY OF ANOPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO ITIN ACCORDANCE WITH THE**

 

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**INDENTURE,A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.  THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATIONHEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES THAT ITWILL COMPLY WITH THE FOREGOING RESTRICTIONS.**

 

**THEHOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITSACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, ALSO AGREES, REPRESENTS ANDWARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OROTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOMESECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNALREVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN ENTITYWHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’SINVESTMENT IN THE ENTITY AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAYACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, UNLESSSUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDERU.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60,91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE ANDHOLDING OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BYSECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASEOR HOLDING.  ANY PURCHASER OR HOLDER OFTHIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN WILL BE DEEMED TO HAVEREPRESENTED BY ITS PURCHASE AND HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE,THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OFSECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE ISAPPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFITPLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEEBENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE ANDHOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISAOR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY ORADMINISTRATIVE EXEMPTION.**

 

**INCONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER TO THEREGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BEREQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THEFOREGOING RESTRICTIONS.**

 

**THISSECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF$100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF.  ANY ATTEMPTED TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESSTHAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANYSUCH PURPORTED TRANSFEREE**

 

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**SHALLBE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY OR ANY INTEREST ORPARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPTOF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR PARTICIPATION, AND SUCHPURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THISSECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.**

 

**THISOBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES OR ANYAGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCECORPORATION (THE “FDIC”).  THISOBLIGATION IS SUBORDINATED TO THE CLAIMS OF THE DEPOSITORS AND THE CLAIMS OFGENERAL AND SECURED CREDITORS OF THE COMPANY, IS INELIGIBLE AS COLLATERAL FOR ALOAN BY THE COMPANY OR ANY OF ITS SUBSIDIARIES AND IS NOT SECURED.**

 

Floating Rate JuniorSubordinated Debt Security due 2033ofHF Financial Corp.

 

HF Financial Corp., a savings and loan holding company incorporated inDelaware (the “Company”, which term includes any successor permitted under theIndenture (as defined herein)), for value received, promises to pay toWilmington Trust Company, not in its individual capacity but solely asInstitutional Trustee for HF Financial Capital Trust IV, a Delawarestatutory trust, or registered assigns, the principal amount of Seven MillionTwo Hundred Seventeen Thousand Dollars ($7,217,000) on October 8, 2033(the “Maturity Date”) (or any Optional Redemption Date or the SpecialRedemption Date, each as defined herein, or any earlier date of acceleration ofthe maturity of this Debt Security), and to pay interest on the outstandingprincipal amount of this Debt Security from September 25, 2003, or fromthe most recent Interest Payment Date (as defined below) to which interest hasbeen paid or duly provided for, quarterly (subject to deferral as set forthherein) in arrears on January 8, April 8, July 8 andOctober 8 of each year, commencing on January 8, 2004 (each, an“Interest Payment Date”), at a floating rate per annum, which, with respect toany Interest Period (as defined in the Indenture), will be equal to LIBOR (asdefined in the Indenture), as determined on the LIBOR Determination Date (asdefined in the Indenture) for such Interest Period, plus 3.10% (the “InterestRate”) (provided that the Interest Rate for any Interest Period may notexceed the highest rate permitted by New York law, as the same may be modifiedby United States law of general application) until the principal hereof shallhave been paid or duly provided for, and on any overdue principal and (withoutduplication and to the extent that payment of such interest is enforceableunder applicable law) on any overdue installment of interest at an annual rate equalto the then applicable Interest Rate, compounded quarterly.  The amount of interest payable for anyInterest Period shall be computed on the basis of a 360-day year and the actualnumber of days elapsed in such Interest Period.

 

The interest installment so payable, and punctually paid or dulyprovided for, on any Interest Payment Date will, as provided in the Indenture,be paid to the Person in whose name this Debt Security (or one or morePredecessor Securities, as defined in the Indenture) is

 

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registered at the close of business on the “regularrecord date” for such interest installment, which shall be the fifteenth dayprior to such Interest Payment Date, whether or not such day is a Business Day(as defined herein).  Any such interestinstallment (other than Deferred Interest (as defined herein)) not punctuallypaid or duly provided for shall forthwith cease to be payable to the holders onsuch regular record date and may be paid to the Person in whose name this DebtSecurity (or one or more Predecessor Securities) is registered at the close ofbusiness on a special record date to be fixed by the Trustee for the payment ofsuch defaulted interest, notice whereof shall be given to the holders of theDebt Securities not less than 10 days prior to such special record date, all asmore fully provided in the Indenture.

 

Payment of the principal of and premium, if any, and interest on thisDebt Security due on the Maturity Date, any Optional Redemption Date or theSpecial Redemption Date, as the case may be, shall be made in immediatelyavailable funds against presentation and surrender of this Debt Security at theoffice or agency of the Trustee maintained for that purpose in Wilmington,Delaware, or at the office or agency of any other Paying Agent appointed by theCompany maintained for that purpose in Wilmington, Delaware or SiouxFalls.  Payment of interest on this DebtSecurity due on any Interest Payment Date other than the Maturity Date, anyOptional Redemption Date or the Special Redemption Date, as the case may be,shall be made at the option of the Company by check mailed to the holderthereof at such address as shall appear in the Debt Security Register or bywire transfer of immediately available funds to an account appropriatelydesignated by the holder hereof. Notwithstanding the foregoing, so long as the holder of this DebtSecurity is the Institutional Trustee, payment of the principal of and premium,if any, and interest on this Debt Security shall be made in immediatelyavailable funds when due at such place and to such account as may be designatedby the Institutional Trustee.  Allpayments in respect of this Debt Security shall be payable in any coin orcurrency of the United States of America that at the time of payment is legaltender for payment of public and private debts.

 

Notwithstanding anything to the contrary contained herein, if anyInterest Payment Date, other than the Maturity Date, any Optional RedemptionDate or the Special Redemption Date, falls on a day that is not a Business Day,then any interest payable will be paid on, and such Interest Payment Date willbe moved to, the next succeeding Business Day, and additional interest willaccrue for each day that such payment is delayed as a result thereof.  If the Maturity Date, any OptionalRedemption Date or the Special Redemption Date falls on a day that is not aBusiness Day, then the principal, premium, if any, and/or interest payable onsuch date will be paid on the next succeeding Business Day, and no additionalinterest will accrue in respect of such payment made on such next succeedingBusiness Day.

 

So long as no Event of Default has occurred and is continuing, theCompany shall have the right, from time to time and without causing an Event ofDefault, to defer payments of interest on the Debt Securities by extending theinterest payment period on the Debt Securities at any time and from time totime during the term of the Debt Securities, for up to 20 consecutive quarterlyperiods (each such extended interest payment period, together with all previousand further consecutive extensions thereof, is referred to herein as an“Extension Period”).  No ExtensionPeriod may end on a date other than an Interest Payment Date or extend beyondthe Maturity Date, any Optional Redemption Date or the Special Redemption Date,as the case may be.  During anyExtension Period, interest will continue to accrue on the Debt Securities, and

 

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interest on such accrued interest (such accruedinterest and interest thereon referred to herein as “Deferred Interest”) willaccrue at an annual rate equal to the Interest Rate applicable during suchExtension Period, compounded quarterly from the date such Deferred Interestwould have been payable were it not for the Extension Period, to the extentpermitted by applicable law.  Nointerest or Deferred Interest (except any Additional Amounts (as defined in theIndenture) that may be due and payable) shall be due and payable during anExtension Period, except at the end thereof. At the end of any Extension Period, the Company shall pay all DeferredInterest then accrued and unpaid on the Debt Securities; provided, however,that during any Extension Period, the Company may not (i) declare or pay anydividends or distributions on, or redeem, purchase, acquire, or make aliquidation payment with respect to, any of the Company’s capital stock or (ii)make any payment of principal of or premium, if any, or interest on or repay,repurchase or redeem any debt securities of the Company that rank *pari passu*in all respects with or junior in interest to the Debt Securities (other than(a) repurchases, redemptions or other acquisitions of shares of capital stockof the Company (A) in connection with any employment contract, benefit plan orother similar arrangement with or for the benefit of one or more employees,officers, directors or consultants, (B) in connection with a dividendreinvestment or stockholder stock purchase plan or (C) in connection with theissuance of capital stock of the Company (or securities convertible into orexercisable for such capital stock), as consideration in an acquisitiontransaction entered into prior to such Extension Period, (b) as a result of anyexchange or conversion of any class or series of the Company’s capital stock(or any capital stock of a subsidiary of the Company) for any class or seriesof the Company’s capital stock or of any class or series of the Company’sindebtedness for any class or series of the Company’s capital stock, (c) thepurchase of fractional interests in shares of the Company’s capital stockpursuant to the conversion or exchange provisions of such capital stock or thesecurity being converted or exchanged, (d) 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 (e) any dividend in the form of stock,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 tosuch stock).  Prior to the terminationof any Extension Period, the Company may further extend such Extension Period, provided,that no Extension Period (including all previous and further consecutiveextensions that are part of such Extension Period) shall exceed 20 consecutivequarterly periods.  Upon the terminationof any Extension Period and upon the payment of all Deferred Interest, theCompany may commence a new Extension Period, subject to the foregoing requirements.  The Company must give the Trustee notice ofits election to begin or extend an Extension Period at least one Business Dayprior to the earlier of (i) the next succeeding date on which interest on theDebt Securities would have been payable except for the election to begin orextend such Extension Period or (ii) the date such interest is payable, but in any event not later than therelated regular record date.

 

The indebtedness evidenced by this Debt Security is, to the extentprovided in the Indenture, subordinate and junior in right of payment to theprior payment in full of all Senior Indebtedness (as defined in the Indenture),and this Debt Security is issued subject to the provisions of the Indenturewith respect thereto.  Each holder ofthis Debt Security, by accepting the same, (a) agrees to and shall be bound bysuch provisions, (b) authorizes and directs the Trustee on such holder’s behalfto take such action as may be necessary or appropriate to acknowledge oreffectuate the subordination so provided and (c) appoints the Trustee such

 

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holder’s attorney-in-fact for any and all suchpurposes.  Each holder hereof, by suchholder’s acceptance hereof, hereby waives all notice of the acceptance of thesubordination provisions contained herein and in the Indenture by each holderof Senior Indebtedness, whether now outstanding or hereafter incurred, andwaives reliance by each such holder upon said provisions.

 

The Company waives diligence, presentment, demand for payment, noticeof nonpayment, notice of protest, and all other demands and notices.

 

This Debt Security shall not be entitled to any benefit under theIndenture hereinafter referred to and shall not be valid or become obligatoryfor any purpose until the certificate of authentication hereon shall have beensigned by or on behalf of the Trustee.

 

The provisions of this Debt Security are continued on the reverse sidehereof and such continued provisions shall for all purposes have the sameeffect as though fully set forth at this place.

 

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IN WITNESS WHEREOF, the Company has duly executed thiscertificate.

 
|   | HF FINANCIAL CORP. |
|--------|--------------------|
|   |               |
|   | By:                |   |   |
|   | Name:              |
|   | Title:             |
|   |               |
| Dated: |               | , |   |   |   |
|        |                    |  |  |  |  |  |  |

 

CERTIFICATE OFAUTHENTICATION

 

This is one of the Debt Securities referred to in the within-mentionedIndenture.

 
|   | WILMINGTON TRUST COMPANY,                     |
|--------|-----------------------------------------------|
|   | not in its individual  capacity but solely as |
|   | the Trustee                                   |
|   |                                          |
|   | By:                                           |   |   |
|   | Authorized  Officer                           |
|   |                                          |
|   | Dated:                                        |   | , |   |   |   |   |
|        |                                               |  |  |  |  |  |  |  |  |  |

 

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[FORM OF REVERSE OFSECURITY]

 

This Debt Security is one of a duly authorized series of debtsecurities of the Company (collectively, the “Debt Securities”), all issued orto be issued pursuant to an Indenture (the “Indenture”), dated as ofSeptember 25, 2003, duly executed and delivered between the Company andWilmington Trust Company, as Trustee (the “Trustee”), to which Indenture andall indentures supplemental thereto reference is hereby made for a descriptionof the rights, limitations of rights, obligations, duties and immunitiesthereunder of the Trustee, the Company and the holders of the Debt Securitiesof which this Debt Security is a part.

 

Upon the occurrence and continuation of a Tax Event, an InvestmentCompany Event or a Capital Treatment Event (each, a “Special Event”), theCompany shall have the right to redeem this Debt Security, at its option, inwhole with all other Debt Securities but not in part, at any time, within 90days following the occurrence of such Special Event (the “Special RedemptionDate”), at the Special Redemption Price (as defined herein).  In the event that the Special RedemptionDate falls on a day prior to the LIBOR Determination Date for any InterestPeriod, then the Company shall be required to pay to Securityholders, on theBusiness Day following such LIBOR Determination Date, any additional amount ofinterest that would have been payable on the Special Redemption Date had theamount of interest determined on such LIBOR Determination Date been known onthe first day of such Interest Period.

 

The Company shall also have the right to redeem this Debt Security atits option, in whole or (provided that all accrued and unpaid interest has beenpaid on all Debt Securities for all Interest Periods terminating on or prior tosuch date) from time to time in part, on any Interest Payment Date on or afterOctober 8, 2008 (each, an “Optional Redemption Date”), at the OptionalRedemption Price (as defined herein).

 

Any redemption pursuant to the preceding two paragraphs will be made,subject to receipt by the Company of prior approval from the Office of ThriftSupervision (the “OTS”) if then required under applicable capital guidelines orpolicies of the OTS, upon not less than 30 days’ nor more than 60 days’ priorwritten notice.  If the Debt Securitiesare only partially redeemed by the Company, the Debt Securities will beredeemed pro rata or by any other method utilized by the Trustee.  In the event of redemption of this DebtSecurity in part only, a new Debt Security or Debt Securities for theunredeemed portion hereof will be issued in the name of the holder hereof uponthe cancellation hereof.

 

“Optional Redemption Price” means an amount in cash equal to 100% ofthe principal amount of this Debt Security being redeemed plus unpaid interestaccrued thereon to the Optional Redemption Date or, in the case of a redemptiondue to the occurrence of a Special Event, to the Special Redemption Date if theSpecial Redemption Date is on or after October 8, 2008.

 

“Special Redemption Price” means an amount in cash equal to thepercentage for the principal amount of this Debt Security that is specifiedbelow for the Special Redemption Date plus unpaid interest accrued thereon tothe Special Redemption Date:

 

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| **Special Redemption During the 12-Month  Period Beginning October  8,** |   | **Percentage of Principal Amount** |   |
|-------------------------------------------------------------------------------|--------|------------------------------------|--------|
| 2003                                                                          |   | 104.40                             | %      |
| 2004                                                                          |   | 103.52                             | %      |
| 2005                                                                          |   | 102.64                             | %      |
| 2006                                                                          |   | 101.76                             | %      |
| 2007                                                                          |   | 100.88                             | %      |
| 2008 and thereafter                                                           |   | 100.00                             | %      |

 

In case an Event of Default, as defined in the Indenture, shall haveoccurred and be continuing, the principal of all of the Debt Securities may bedeclared, and, in certain cases, shall ipsofacto become, due andpayable, and upon any such declaration of acceleration shall become due andpayable, in each case, in the manner, with the effect and subject to theconditions provided in the Indenture.

 

The Indenture contains provisions permitting the Company and theTrustee, with the consent of the holders of a majority in aggregate principalamount of the Debt Securities at the time outstanding affected thereby, asspecified in the Indenture, to execute supplemental indentures for the purposeof adding any provisions to or changing in any manner or eliminating any of theprovisions of the Indenture or of any supplemental indenture or of modifying inany manner the rights of the holders of the Debt Securities; provided, however,that no such supplemental indenture shall, among other things, without theconsent of the holders of each Debt Security then outstanding and affectedthereby (i) change the Maturity Date of any Debt Security, or reduce theprincipal amount thereof or any premium thereon, or reduce the rate (or mannerof calculation of the rate) or extend the time of payment of interest thereon,or reduce (other than as a result of the maturity or earlier redemption of anysuch Debt Security in accordance with the terms of the Indenture and such DebtSecurity) or increase the aggregate principal amount of Debt Securities thenoutstanding, or change any of the redemption provisions, or make the principalthereof or any interest or premium thereon payable in any coin or currencyother than United States Dollars, or impair or affect the right of any holderto institute suit for payment thereof, or (ii) reduce the aforesaidpercentage of Debt Securities the holders of which are required to consent toany such supplemental indenture.  TheIndenture also contains provisions permitting the holders of a majority inaggregate principal amount of the Debt Securities at the time outstanding, onbehalf of the holders of all the Debt Securities, to waive any past default inthe performance of any of the covenants contained in the Indenture, orestablished pursuant to the Indenture, and its consequences, except (a) adefault in payments due in respect of any of the Debt Securities, (b) inrespect of covenants or provisions of the Indenture which cannot be modified oramended without the consent of the holder of each Debt Security affected, or (c) inrespect of the covenants of the Company relating to its ownership of CommonSecurities of the Trust.  Any suchconsent or waiver by the holder of this Debt Security (unless revoked asprovided in the Indenture) shall be conclusive and binding upon such holder andupon

 

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all future holders and owners of this Debt Securityand of any Debt Security issued in exchange herefor or in place hereof (whetherby registration of transfer or otherwise), irrespective of whether or not anynotation of such consent or waiver is made upon this Debt Security.

 

No reference herein to the Indenture and no provision of this DebtSecurity or of the Indenture shall alter or impair the obligation of theCompany, which is absolute and unconditional, to make all payments due on thisDebt Security at the time and place and at the rate and in the money hereinprescribed.

 

As provided in the Indenture and subject to certain limitations hereinand therein set forth, this Debt Security is transferable by the holder hereofon the Debt Security Register (as defined in the Indenture) of the Company,upon surrender of this Debt Security for registration of transfer at the officeor agency of the Trustee in Wilmington, Delaware, or at any other office oragency of the Company in Wilmington, Delaware or Sioux Falls, accompanied by awritten instrument or instruments of transfer in form satisfactory to theCompany or the Trustee duly executed by the holder hereof or such holder’sattorney duly authorized in writing, and thereupon one or more new DebtSecurities of authorized denominations and for the same aggregate principalamount will be issued to the designated transferee or transferees.  No service charge will be made for any suchregistration of transfer, but the Company or the Trustee may require payment ofa sum sufficient to cover any tax, fee or other governmental charge payable inrelation thereto as specified in the Indenture.

 

Prior to due presentment for registration of transfer of this DebtSecurity, the Company, the Trustee, any Authenticating Agent, any Paying Agent,any transfer agent and the Debt Security registrar may deem and treat theholder hereof as the absolute owner hereof (whether or not this Debt Securityshall be overdue and notwithstanding any notice of ownership or writing hereon)for the purpose of receiving payment of the principal of and premium, if any,and interest on this Debt Security and for all other purposes, and none of theCompany, the Trustee, any Authenticating Agent, any Paying Agent, any transferagent or any Debt Security registrar shall be affected by any notice to thecontrary.

 

As provided in the Indenture and subject to certain limitations hereinand therein set forth, Debt Securities are exchangeable for a like aggregateprincipal amount of Debt Securities of different authorized denominations, asrequested by the holder surrendering the same.

 

The Debt Securities are issuable only in registered certificated formwithout coupons.

 

No recourse shall be had for the payment of the principal of orpremium, if any, or interest on this Debt Security, or for any claim basedhereon, or otherwise in respect hereof, or based on or in respect of theIndenture, against any incorporator, stockholder, officer, director, employeeor agent, past, present or future, as such, of the Company or of anypredecessor or successor corporation of the Company, whether by virtue of anyconstitution, statute or rule of law, or by the enforcement of any assessmentor penalty or otherwise, all such liability being, by the acceptance hereof andas part of the consideration for the issuance hereof, expressly waived andreleased.

 

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All terms used but not defined in this Debt Security shall have themeanings assigned to them in the Indenture.

 

THIS DEBT SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCEWITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWSPRINCIPLES OF SAID STATE OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERALOBLIGATIONS LAW.

 

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