**Exhibit10.1**

GUARANTEEAGREEMENT

HF FINANCIAL CORP.

Dated as ofDecember 7, 2006

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**TABLE OFCONTENTS**
|                                                    | **Page** |
|----------------------------------------------------|----------|
|                                               |     |
| ARTICLE I                                          |     |
|                                               |     |
| DEFINITIONS AND INTERPRETATION                     |     |
|                                               |     |
| SECTION 1.1                                        |     | Definitions and  Interpretation | 1 |
|                                               |     |   |   |
| ARTICLE II                                         |     |
|                                               |     |
| POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE |     |
|                                               |     |
| SECTION 2.1                                        |     | Powers and Duties of  the Guarantee Trustee | 4 |
| SECTION 2.2                                        |     | Certain Rights of the  Guarantee Trustee | 5 |
| SECTION 2.3                                        |     | Not Responsible for  Recitals or Issuance of Guarantee | 7 |
| SECTION 2.4                                        |     | Events of Default;  Waiver | 7 |
| SECTION 2.5                                        |     | Events of Default;  Notice | 8 |
|                                               |     |
| ARTICLE III                                        |     |
|                                               |     |
| THE GUARANTEE TRUSTEE                              |     |
|                                               |     |
| SECTION 3.1                                        |     | The Guarantee Trustee;  Eligibility | 8 |
| SECTION 3.2                                        |     | Appointment, Removal  and Resignation of the Guarantee Trustee | 9 |
|                                               |     |
| ARTICLE IV                                         |     |
|                                               |     |
| GUARANTEE                                          |     |
|                                               |     |
| SECTION 4.1                                        |     | Guarantee | 9 |
| SECTION 4.2                                        |     | Waiver of Notice and  Demand | 10 |
| SECTION 4.3                                        |     | Obligations Not  Affected | 10 |
| SECTION 4.4                                        |     | Rights of Holders | 11 |
| SECTION 4.5                                        |     | Guarantee of Payment | 11 |
| SECTION 4.6                                        |     | Subrogation | 11 |
| SECTION 4.7                                        |     | Independent Obligations | 12 |
| SECTION 4.8                                        |     | Enforcement | 12 |
|                                               |     |
| ARTICLE V                                          |     |
|                                               |     |
| LIMITATION OF TRANSACTIONS; SUBORDINATION          |     |
|                                               |     |
| SECTION 5.1                                        |     | Limitation of  Transactions | 12 |
| SECTION 5.2                                        |     | Ranking | 13 |
|                                                    |          |  |  |  |  |

 

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|                 | **Page** |
|-----------------|----------|
|            |     |
| ARTICLE VI      |     |
|            |     |
| TERMINATION     |     |
|            |     |
| SECTION 6.1     |     | Termination | 13 |
|            |     |
| ARTICLE VII     |     |
|            |     |
| INDEMNIFICATION |     |
|            |     |
| SECTION 7.1     |     | Exculpation | 13 |
| SECTION 7.2     |     | Indemnification | 14 |
| SECTION 7.3     |     | Compensation;  Reimbursement of Expenses | 15 |
|            |     |   |   |
| ARTICLE VIII    |     |
|            |     |
| MISCELLANEOUS   |     |
|            |     |   |   |
| SECTION 8.1     |     | Successors and Assigns | 15 |
| SECTION 8.2     |     | Amendments | 16 |
| SECTION 8.3     |     | Notices | 16 |
| SECTION 8.4     |     | Benefit | 16 |
| SECTION 8.5     |     | Governing Law | 16 |
| SECTION 8.6     |     | Counterparts | 17 |
|                 |          |  |  |  |

 

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GUARANTEE AGREEMENT

This GUARANTEE AGREEMENT(the “Guarantee”), dated as of December 7, 2006, is executed and delivered byHF Financial Corp., a savings and loan holding company incorporated in theState of Delaware (the “Guarantor”), and Wilmington Trust Company, a Delawarebanking corporation, as trustee (the “Guarantee Trustee”), for the benefit ofthe Holders (as defined herein) from time to time of the Capital Securities (asdefined herein) of HF Financial Capital Trust V, a Delaware statutory trust (the“Issuer”).

WHEREAS, pursuant to anAmended and Restated Declaration of Trust (the “Declaration”), dated as ofDecember 7, 2006, among the trustees named therein of the Issuer, HF FinancialCorp., as sponsor, and the Holders from time to time of undivided beneficialinterests in the assets of the Issuer, the Issuer is issuing on the date hereofsecurities, having an aggregate liquidation amount of $10,000,000, designatedin the Declaration as MMCapSSM (the “CapitalSecurities”); and

WHEREAS, as incentive forthe Holders to purchase the Capital Securities, the Guarantor desiresirrevocably and unconditionally to agree, to the extent set forth in thisGuarantee, to pay to the Holders of Capital Securities the Guarantee Payments(as defined herein) and to make certain other payments on the terms andconditions set forth herein.

NOW, THEREFORE, inconsideration of the purchase by each Holder of the Capital Securities, whichpurchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantorexecutes and delivers this Guarantee for the benefit of the Holders.

ARTICLE I

DEFINITIONS ANDINTERPRETATION 

SECTION 1.1 Definitionsand Interpretation.

In this Guarantee,unless the context otherwise requires:

(a)           capitalized terms used in thisGuarantee but not defined in the preamble above have the respective meaningsassigned to them in this Section 1.1;

(b)           a term defined anywhere in thisGuarantee has the same meaning throughout;

(c)           all references to “the Guarantee” or“this Guarantee” are to this Guarantee as modified, supplemented or amendedfrom time to time;

(d)           all references in this Guarantee toArticles and Sections are to Articles and Sections of this Guarantee, unlessotherwise specified;

(e)           terms defined in the Declaration asof the date of execution of this Guarantee have the same meanings when used inthis Guarantee, unless otherwise defined in this Guarantee or unless thecontext otherwise requires; and

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(f)            a reference to the singular includesthe plural and vice versa.

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

“CommonSecurities” has the meaning specified in the Declaration.

“Corporate TrustOffice”  means the office of theGuarantee Trustee at which at any particular time its corporate trust businessshall be principally administered, which at all times shall be located withinthe United States and at the time of the execution of this Guarantee shall beRodney Square North, 1100 North Market Street, Wilmington, DE 19890-0001.

“Covered Person”means any Holder of Capital Securities.

“Debenture Issuer” meansHF Financial Corp. or any successor entity resulting from any consolidation,amalgamation, merger or other business combination, in its capacity as issuerof the Debentures.

“Debentures” means thejunior subordinated debentures of the Debenture Issuer that are designated inthe Indenture as the “Fixed/Floating Rate Junior Subordinated Debt Securitiesdue 2037” and held by the Institutional Trustee (as defined in the Declaration)of the Issuer.

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

“Guarantee Payments”means the following payments or distributions, without duplication, withrespect to the Capital Securities, to the extent not paid or made by theIssuer: (i) any accrued and unpaid Distributions (as defined in theDeclaration) which are required to be paid on such Capital Securities to theextent the Issuer has funds available in the Property Account (as defined inthe Declaration) therefor at such time, (ii) the price payable upon theredemption of any Capital Securities to the extent the Issuer has fundsavailable in the Property Account therefor at such time, with respect to anyCapital Securities that are (1) called for redemption by the Issuer or (2)mandatorily redeemed by the Issuer, in each case, in accordance with the termsof such Capital Securities, and (iii) upon a voluntary or involuntaryliquidation, dissolution, winding-up or termination of the Issuer (other thanin connection with the distribution of Debentures to the Holders of the CapitalSecurities in exchange therefor as provided in the Declaration), the lesser of(a) the aggregate of the liquidation amount of the Capital Securities and allaccrued and unpaid Distributions on the Capital Securities to the date ofpayment, to the extent the Issuer has funds available in the Property Accounttherefor at such time, and (b) the amount of assets of the Issuer remainingavailable for distribution to Holders in liquidation of the Issuer aftersatisfaction of liabilities to creditors of the Issuer as required byapplicable law (in either case, the “Liquidation Distribution”).

“Guarantee Trustee” meansWilmington Trust Company, until a Successor Guarantee Trustee has beenappointed and has accepted such appointment pursuant to the terms of thisGuarantee and thereafter means each such Successor Guarantee Trustee.

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“Holder” means any Personin whose name any Capital Securities are registered on the books and records ofthe Issuer; provided,however, that, in determining whether theholders of the requisite percentage of Capital Securities have given anyrequest, notice, consent or waiver hereunder, “Holder” shall not include theGuarantor or any Affiliate of the Guarantor.

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

“Indenture” means theIndenture, dated as of December 7, 2006, between the Debenture Issuer andWilmington Trust Company, not in its individual capacity but solely as trustee,and any indenture supplemental thereto pursuant to which the Debentures are tobe issued to the Institutional Trustee of the Issuer.

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

“Majority in liquidationamount of the Capital Securities” means Holder(s) of outstanding CapitalSecurities, voting together as a class, but separately from the holders ofCommon Securities, of more than 50% of the aggregate liquidation amount(including the amount that would be paid upon the redemption, liquidation orotherwise on the date upon which the voting percentages are determined, plusunpaid Distributions accrued thereon to such date) of all Capital Securitiesthen outstanding.

“Obligations” means anycosts, expenses or liabilities (but not including liabilities related to taxes)of the Issuer, other than obligations of the Issuer to pay to holders of anyTrust Securities the amounts due such holders pursuant to the terms of theTrust Securities.

“Officer’s Certificate”means, with respect to any Person, a certificate signed by one AuthorizedOfficer of such Person.  Any Officer’sCertificate delivered with respect to compliance with a condition or covenantprovided for in this Guarantee shall include:

(a)           a statement that such officer signingthe Officer’s Certificate has read the covenant or condition and thedefinitions relating thereto;

(b)           a brief statement of the nature andscope of the examination or investigation undertaken by such officer inrendering the Officer’s Certificate;

(c)           a statement that such officer hasmade such examination or investigation as, in such officer’s opinion, isnecessary to enable such officer to express an informed opinion as to whetheror not such covenant or condition has been complied with; and

(d)           a statement as to whether, in theopinion of such officer, such condition or covenant has been complied with.

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“Person” means a legalperson, including any individual, corporation, estate, partnership, jointventure, association, joint stock company, limited liability company, trust,unincorporated association, or government or any agency or politicalsubdivision thereof, or any other entity of whatever nature.

“Responsible Officer”means, with respect to the Guarantee Trustee, any officer within the CorporateTrust Office of the Guarantee Trustee with direct responsibility for theadministration of any matters relating to this Guarantee, including any vicepresident, any assistant vice president, any secretary, any assistantsecretary, the treasurer, any assistant treasurer, any trust officer or otherofficer of the Corporate Trust Office of the Guarantee Trustee customarilyperforming functions similar to those performed by any of the above designatedofficers and also means, with respect to a particular corporate trust matter,any other officer to whom such matter is referred because of that officer’sknowledge of and familiarity with the particular subject.

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

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

ARTICLE II

POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

SECTION 2.1 Powers and Duties of the GuaranteeTrustee.

(a)           This Guarantee shall be held by theGuarantee Trustee for the benefit of the Holders of the Capital Securities, andthe Guarantee Trustee shall not transfer this Guarantee to any Person except aHolder of Capital Securities exercising his or her rights pursuant to Section4.4 (b) or to a Successor Guarantee Trustee on acceptance by such SuccessorGuarantee Trustee of its appointment to act as Successor GuaranteeTrustee.  The right, title and interestof the Guarantee Trustee shall automatically vest in any Successor GuaranteeTrustee, and such vesting and cessation of title shall be effective whether ornot conveyancing documents have been executed and delivered pursuant to theappointment of such Successor Guarantee Trustee.

(b)           If an Event of Default actually knownto a Responsible Officer of the Guarantee Trustee has occurred and iscontinuing, the Guarantee Trustee shall enforce this Guarantee for the benefitof the Holders of the Capital Securities.

(c)           The Guarantee Trustee, before theoccurrence of any Event of Default and after the curing or waiving of allEvents of Default that may have occurred, shall undertake to perform only suchduties as are specifically set forth in this Guarantee, and no impliedcovenants shall be read into this Guarantee against the Guarantee Trustee.  In case an Event of Default has occurred(that has not been cured or waived pursuant to Section 2.4(b)) and is actuallyknown to a Responsible Officer of the Guarantee Trustee, the Guarantee Trusteeshall exercise such of the rights and powers vested in it by this Guarantee,and use the same degree of care and skill in its exercise thereof, as a prudentperson would exercise or use under the circumstances in the conduct of his orher own affairs.

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(d)           No provision of this Guarantee shallbe construed to relieve the Guarantee Trustee from liability for its ownnegligent action, its own negligent failure to act, or its own willfulmisconduct or bad faith, except that:

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

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

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

(ii)           the Guarantee Trustee shall not beliable for any error of judgment made in good faith by a Responsible Officer ofthe Guarantee Trustee, unless it shall be proved that such Responsible Officerof the Guarantee Trustee or the Guarantee Trustee was negligent in ascertainingthe pertinent facts upon which such judgment was made;

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

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

SECTION 2.2 CertainRights of the Guarantee Trustee.

(a)           Subject to the provisions of Section2.1:

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(i)            The Guarantee Trustee mayconclusively rely, and shall be fully protected in acting or refraining fromacting upon, any resolution, certificate, statement, instrument, opinion,report, notice, request, direction, consent, order, bond, debenture, note,other evidence of indebtedness or other paper or document believed by it to begenuine and to have been signed, sent or presented by the proper party orparties.

(ii)           Any direction or act of the Guarantorcontemplated by this Guarantee shall be sufficiently evidenced by an Officer’sCertificate.

(iii)          Whenever, in the administration ofthis Guarantee, the Guarantee Trustee shall deem it desirable that a matter beproved or established before taking, suffering or omitting any actionhereunder, the Guarantee Trustee (unless other evidence is herein specificallyprescribed) may, in the absence of bad faith on its part, request andconclusively rely upon an Officer’s Certificate of the Guarantor which, uponreceipt of such request, shall be promptly delivered by the Guarantor.

(iv)          The Guarantee Trustee shall have noduty to see to any recording, filing or registration of any instrument or otherwriting (or any rerecording, refiling or reregistration thereof).

(v)           The Guarantee Trustee may consultwith counsel of its selection, and the advice or opinion of such counsel withrespect to legal matters shall be full and complete authorization andprotection in respect of any action taken, suffered or omitted by it hereunderin good faith and in accordance with such advice or opinion.  Such counsel may be counsel to the Guarantoror any of its Affiliates and may include any of its employees.  The Guarantee Trustee shall have the right atany time to seek instructions concerning the administration of this Guaranteefrom any court of competent jurisdiction.

(vi)          The Guarantee Trustee shall be underno obligation to exercise any of the rights or powers vested in it by thisGuarantee at the request or direction of any Holder, unless such Holder shallhave provided to the Guarantee Trustee such security and indemnity, reasonablysatisfactory to the Guarantee Trustee, against the costs, expenses (includingattorneys’ fees and expenses and the expenses of the Guarantee Trustee’sagents, nominees or custodians) and liabilities that might be incurred by it incomplying with such request or direction, including such reasonable advances asmay be requested by the Guarantee Trustee; provided, however, that nothing containedin this Section 2.2(a)(vi) shall be taken to relieve the Guarantee Trustee,upon the occurrence of an Event of Default, of its obligation to exercise therights and powers vested in it by this Guarantee.

(vii)          The Guarantee Trustee shall not be boundto make any investigation into the facts or matters stated in any resolution,certificate, statement, instrument, opinion, report, notice, request,direction, consent, order, bond, debenture, note, other evidence ofindebtedness or other paper or document, but the Guarantee Trustee, in itsdiscretion, may make such further inquiry or investigation into such facts ormatters as it may see fit.

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

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

(x)            Whenever in the administration ofthis Guarantee the Guarantee Trustee shall deem it desirable to receiveinstructions with respect to enforcing any remedy or right or taking any otheraction hereunder, the Guarantee Trustee (A) may request instructions from theHolders of a Majority in liquidation amount of the Capital Securities, (B) mayrefrain from enforcing such remedy or right or taking such other action untilsuch instructions are received and (C) shall be protected in conclusivelyrelying on or acting in accordance with such instructions.

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

(b)           No provision of this Guarantee shallbe deemed to impose any duty or obligation on the Guarantee Trustee to performany act or acts or exercise any right, power, duty or obligation conferred orimposed on it, in any jurisdiction in which it shall be illegal or in which theGuarantee Trustee shall be unqualified or incompetent in accordance withapplicable law to perform any such act or acts or to exercise any such right,power, duty or obligation.  No permissivepower or authority available to the Guarantee Trustee shall be construed to bea duty.

SECTION 2.3 NotResponsible for Recitals or Issuance of Guarantee.

The recitals contained inthis Guarantee shall be taken as the statements of the Guarantor, and the GuaranteeTrustee does not assume any responsibility for their correctness.  The Guarantee Trustee makes no representationas to the validity or sufficiency of this Guarantee.

SECTION 2.4 Eventsof Default; Waiver.

(a)           An “Event of Default” under this Guaranteewill occur upon the failure of the Guarantor to perform any of its payment orother obligations hereunder.

(b)           The Holders of a Majority inliquidation amount of the Capital Securities may, voting or consenting as aclass, on behalf of the Holders of all of the Capital Securities,

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waive any past Event of Default and itsconsequences.  Upon such waiver, any suchEvent of Default shall cease to exist, and shall be deemed to have been cured,for every purpose of this Guarantee, but no such waiver shall extend to anysubsequent or other default or Event of Default or impair any right consequentthereon.

SECTION 2.5 Eventsof Default; Notice.

(a)           The Guarantee Trustee shall, within90 days after the occurrence of an Event of Default, transmit by mail, firstclass postage prepaid, to the Holders of the Capital Securities, notices of allEvents of Default actually known to a Responsible Officer of the GuaranteeTrustee, unless such defaults have been cured before the giving of such notice,provided, however, that the Guarantee Trustee shall be protected in withholdingsuch notice if and so long as a Responsible Officer of the Guarantee Trustee ingood faith determines that the withholding of such notice is in the interestsof the Holders of the Capital Securities.

(b)           The Guarantee Trustee shall not becharged with knowledge of any Event of Default unless the Guarantee Trusteeshall have received written notice thereof from the Guarantor or a Holder ofthe Capital Securities, or a Responsible Officer of the Guarantee Trusteecharged with the administration of this Guarantee shall have actual knowledgethereof.

ARTICLE III

THE GUARANTEE TRUSTEE

SECTION 3.1 TheGuarantee Trustee; Eligibility.

(a)           There shall at all times be aGuarantee Trustee which shall:

(i)            not be an Affiliate of theGuarantor; and

(ii)           be a corporation or nationalassociation organized and doing business under the laws of the United States ofAmerica or any state thereof or of the District of Columbia, or Personauthorized under such laws to exercise corporate trust powers, having acombined capital and surplus of at least 50 million U.S. dollars ($50,000,000),and subject to supervision or examination by federal, state or District ofColumbia authority.  If such corporationor national association publishes reports of condition at least annually,pursuant to law or to the requirements of the supervising or examiningauthority referred to above, then, for the purposes of this Section 3.1(a)(ii),the combined capital and surplus of such corporation or national associationshall be deemed to be its combined capital and surplus as set forth in its mostrecent report of condition so published.

(b)           If at any time the Guarantee Trusteeshall cease to be eligible to so act under Section 3.1(a), the GuaranteeTrustee shall immediately resign in the manner and with the effect set forth inSection 3.2(c).

(c)           If the Guarantee Trustee has or shallacquire any “conflicting interest” within the meaning of Section 310(b) of theTrust Indenture Act, the Guarantee Trustee shall

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either eliminate such interest or resign to the extentand in the manner provided by, and subject to, this Guarantee.

SECTION 3.2 Appointment,Removal and Resignation of the Guarantee Trustee.

(a)           Subject to Section 3.2(b), theGuarantee Trustee may be appointed or removed without cause at any time by theGuarantor except during an Event of Default.

(b)           The Guarantee Trustee shall not beremoved in accordance with Section 3.2(a) until a Successor Guarantee Trusteehas been appointed and has accepted such appointment by written instrumentexecuted by such Successor Guarantee Trustee and delivered to the Guarantor.

(c)           The Guarantee Trustee appointed tooffice shall hold office until a Successor Guarantee Trustee shall have beenappointed or until its removal or resignation. The Guarantee Trustee may resign from office (without need for prior orsubsequent accounting) by an instrument in writing executed by the GuaranteeTrustee and delivered to the Guarantor, which resignation shall not take effectuntil a Successor Guarantee Trustee has been appointed and has accepted suchappointment by an instrument in writing executed by such Successor GuaranteeTrustee and delivered to the Guarantor and the resigning Guarantee Trustee.

(d)           If no Successor Guarantee Trusteeshall have been appointed and accepted appointment as provided in this Section3.2 within 60 days after delivery of an instrument of removal or resignation,the Guarantee Trustee resigning or being removed may petition any court of competentjurisdiction for appointment of a Successor Guarantee Trustee.  Such court may thereupon, after prescribingsuch notice, if any, as it may deem proper, appoint a Successor GuaranteeTrustee.

(e)           No Guarantee Trustee shall be liablefor the acts or omissions to act of any Successor Guarantee Trustee.

(f)            Upon termination of this Guaranteeor removal or resignation of the Guarantee Trustee pursuant to this Section3.2, the Guarantor shall pay to the Guarantee Trustee all amounts owing to theGuarantee Trustee under Sections 7.2 and 7.3 accrued to the date of suchtermination, removal or resignation.

ARTICLE IV

GUARANTEE

SECTION 4.1 Guarantee.

(a)           The Guarantor irrevocably andunconditionally agrees to pay in full to the Holders the Guarantee Payments(without duplication of amounts theretofore paid by the Issuer), as and whendue, regardless of any defense (except defense of payment by the Issuer), rightof set-off or counterclaim that the Issuer may have or assert.  The Guarantor’s obligation to make a GuaranteePayment may be satisfied by direct payment of the required amounts by theGuarantor to the Holders or by causing the Issuer to pay such amounts to theHolders.

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(b)           The Guarantor hereby also agrees toassume any and all Obligations of the Issuer and in the event any suchObligation is not so assumed, subject to the terms and conditions hereof, theGuarantor hereby irrevocably and unconditionally guarantees to each Beneficiarythe full payment, when and as due, of any and all Obligations to such Beneficiaries.  This Guarantee is intended to be for theBeneficiaries who have received notice hereof.

SECTION 4.2 Waiverof Notice and Demand.

The Guarantor herebywaives notice of acceptance of this Guarantee and of any liability to which itapplies or may apply, presentment, demand for payment, any right to require aproceeding first against the Issuer or any other Person before proceedingagainst the Guarantor, protest, notice of nonpayment, notice of dishonor,notice of redemption and all other notices and demands.

SECTION 4.3 ObligationsNot Affected.

The obligations,covenants, agreements and duties of the Guarantor under this Guarantee shall inno way be affected or impaired by reason of the happening from time to time ofany of the following:

(a)           the release or waiver, by operationof law or otherwise, of the performance or observance by the Issuer of anyexpress or implied agreement, covenant, term or condition relating to theCapital Securities to be performed or observed by the Issuer;

(b)           the extension of time for the paymentby the Issuer of all or any portion of the Distributions, the price payableupon the redemption of the Capital Securities, the Liquidation Distribution orany other sums payable under the terms of the Capital Securities or the extensionof time for the performance of any other obligation under, arising out of, orin connection with, the Capital Securities (other than an extension of time forthe payment of the Distributions, the price payable upon the redemption of theCapital Securities, the Liquidation Distribution or other sums payable thatresults from the extension of any interest payment period on the Debentures);

(c)           any failure, omission, delay or lackof diligence on the part of the Holders to enforce, assert or exercise anyright, privilege, power or remedy conferred on the Holders pursuant to theterms of the Capital Securities, or any action on the part of the Issuergranting indulgence or extension of any kind;

(d)           the voluntary or involuntaryliquidation, dissolution, sale of any collateral, receivership, insolvency,bankruptcy, assignment for the benefit of creditors, reorganization,arrangement, composition or readjustment of debt of, or other similarproceedings affecting, the Issuer or any of the assets of the Issuer;

(e)           any invalidity of, or defect ordeficiency in, the Capital Securities;

(f)            the settlement or compromise of anyobligation guaranteed hereby or hereby incurred; or

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(g)           any other circumstance whatsoeverthat might otherwise constitute a legal or equitable discharge or defense of aguarantor, it being the intent of this Section 4.3 that the obligations of theGuarantor hereunder shall be absolute and unconditional under any and allcircumstances.

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

SECTION 4.4 Rightsof Holders.

(a)           The Holders of a Majority inliquidation amount of the Capital Securities have the right to direct the time,method and place of conducting any proceeding for any remedy available to theGuarantee Trustee in respect of this Guarantee or to direct the exercise of anytrust or power conferred upon the Guarantee Trustee under this Guarantee;provided, however, that (subject to Sections 2.1 and 2.2) the Guarantee Trusteeshall have the right to decline to follow any such direction if the GuaranteeTrustee shall determine that the actions so directed would be unjustlyprejudicial to the Holders not taking part in such direction or if theGuarantee Trustee being advised by legal counsel determines that the action orproceeding so directed may not lawfully be taken or if the Guarantee Trustee ingood faith by its board of directors or trustees, executive committee or atrust committee of directors or trustees and/or Responsible Officers shalldetermine that the action or proceeding so directed would involve the GuaranteeTrustee in personal liability.

(b)           Any Holder of Capital Securities mayinstitute a legal proceeding directly against the Guarantor to enforce theGuarantee Trustee’s rights under this Guarantee, without first instituting alegal proceeding against the Issuer, the Guarantee Trustee or any otherPerson.  The Guarantor waives any rightor remedy to require that any such action be brought first against the Issuer,the Guarantee Trustee or any other Person before so proceeding directly againstthe Guarantor.

SECTION 4.5 Guaranteeof Payment.

This Guaranteecreates a guarantee of payment and not of collection.

SECTION 4.6 Subrogation.

The Guarantor shall besubrogated to all (if any) rights of the Holders of Capital Securities againstthe Issuer in respect of any amounts paid to such Holders by the Guarantorunder this Guarantee; provided, however, that the Guarantor shall not (exceptto the extent required by applicable provisions of law) be entitled to enforceor exercise any right that it may acquire by way of subrogation or anyindemnity, reimbursement or other agreement, in all cases as a result ofpayment under this Guarantee, if, after giving effect to any such payment, anyamounts are due and unpaid under this Guarantee.  If any amount shall be paid to the Guarantorin violation of the preceding sentence, the Guarantor agrees to hold suchamount in trust for the Holders and to pay over such amount to the Holders.

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SECTION 4.7 IndependentObligations.

The Guarantoracknowledges that its obligations hereunder are independent of the obligationsof the Issuer with respect to the Capital Securities and that the Guarantorshall be liable as principal and as debtor hereunder to make Guarantee Paymentspursuant to the terms of this Guarantee notwithstanding the occurrence of anyevent referred to in subsections (a) through (g), inclusive, of Section 4.3hereof.

SECTION 4.8 Enforcement.

A Beneficiary may enforcethe Obligations of the Guarantor contained in Section 4.1(b) directly againstthe Guarantor, and the Guarantor waives any right or remedy to require that anyaction be brought against the Issuer or any other person or entity beforeproceeding against the Guarantor.

The Guarantor shall besubrogated to all rights (if any) of any Beneficiary against the Issuer inrespect of any amounts paid to the Beneficiaries by the Guarantor under thisGuarantee; provided, however, that the Guarantor shall not (except to theextent required by applicable provisions of law) be entitled to enforce orexercise any rights that it may acquire by way of subrogation or any indemnity,reimbursement or other agreement, in all cases as a result of payment underthis Guarantee, if, after giving effect to such payment, any amounts are dueand unpaid under this Guarantee.  If anyamount shall be paid to the Guarantor in violation of the preceding sentence,the Guarantor agrees to hold such amount in trust for the Beneficiaries and topay over such amount to the Beneficiaries.

ARTICLE V

LIMITATION OFTRANSACTIONS; SUBORDINATION

SECTION 5.1 Limitationof Transactions.

So long as any CapitalSecurities remain outstanding, if (a) there shall have occurred and becontinuing an Event of Default or (b) Debenture Issuer shall have selected anExtension Period as provided in the Indenture and such period, or any extensionthereof, shall have commenced and be continuing, then the Guarantor may not (x)declare or pay any dividends or distributions on, or redeem, purchase, acquire,or make a liquidation payment with respect to, any of the Guarantor’s capitalstock, (y) make any payment of principal of or interest or premium, if any, onor repay, repurchase or redeem any debt securities of the Guarantor that rankin all respects *pari passu* withor junior in interest to the Debentures or (z) make any payment under anyguarantees of the Guarantor that rank in all respects *pari passu* with or junior in interest tothis Guarantee (other than (i) repurchases, redemptions or other acquisitionsof shares of capital stock of the Guarantor (A) in connection with anyemployment contract, benefit plan or other similar arrangement with or for thebenefit of one or more employees, officers, directors, or consultants, (B) inconnection with a dividend reinvestment or stockholder stock purchase plan or(C) in connection with the issuance of capital stock of the Guarantor (orsecurities convertible into or exercisable for such capital stock), asconsideration in an acquisition transaction entered into prior to theoccurrence of the Event of Default or the

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

SECTION 5.2 Ranking.

This Guarantee willconstitute an unsecured obligation of the Guarantor and will rank subordinateand junior in right of payment to all present and future Senior Indebtedness(as defined in the Indenture) of the Guarantor. By their acceptance thereof, each Holder of Capital Securities agrees tothe foregoing provisions of this Guarantee and the other terms set forthherein.

ARTICLE VI 

TERMINATION

SECTION 6.1 Termination.

This Guarantee shallterminate as to the Capital Securities (i) upon full payment of the pricepayable upon redemption of all Capital Securities then outstanding, (ii) uponthe distribution of all of the Debentures to the Holders of all of the CapitalSecurities or (iii) upon full payment of the amounts payable in accordance withthe Declaration upon dissolution of the Issuer. This Guarantee will continue to be effective or will be reinstated, asthe case may be, if at any time any Holder of Capital Securities must restorepayment of any sums paid under the Capital Securities or under this Guarantee.

ARTICLE VII 

INDEMNIFICATION 

SECTION 7.1 Exculpation.

(a)           No Indemnified Person shall beliable, responsible or accountable in damages or otherwise to the Guarantor orany Covered Person for any loss, damage or claim incurred by reason of any actor omission of such Indemnified Person in good faith in accordance with thisGuarantee and in a manner that such Indemnified Person reasonably believed tobe within the scope of the authority conferred on such Indemnified Person bythis Guarantee or by law, except that an Indemnified Person shall be liable forany such loss, damage or claim

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incurred by reason of such Indemnified Person’snegligence, willful misconduct or bad faith with respect to such acts oromissions.

(b)           An Indemnified Person shall be fullyprotected in relying in good faith upon the records of the Issuer or theGuarantor and upon such information, opinions, reports or statements presentedto the Issuer or the Guarantor by any Person as to matters the IndemnifiedPerson reasonably believes are within such other Person’s professional orexpert competence and who, if selected by such Indemnified Person, has beenselected with reasonable care by such Indemnified Person, includinginformation, opinions, reports or statements as to the value and amount of theassets, liabilities, profits, losses, or any other facts pertinent to theexistence and amount of assets from which Distributions to Holders of CapitalSecurities might properly be paid.

SECTION 7.2 Indemnification.

(a)           The Guarantor agrees to indemnifyeach Indemnified Person for, and to hold each Indemnified Person harmlessagainst, any and all loss, liability, damage, claim or expense incurred withoutnegligence, willful misconduct or bad faith on the part of the IndemnifiedPerson, arising out of or in connection with the acceptance or administrationof the trust or trusts hereunder, including but not limited to the costs andexpenses (including reasonable legal fees and expenses) of the IndemnifiedPerson defending itself against, or investigating, any claim or liability inconnection with the exercise or performance of any of the Indemnified Person’spowers or duties hereunder.  Theobligation to indemnify as set forth in this Section 7.2 shall survive theresignation or removal of the Guarantee Trustee and the termination of thisGuarantee.

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

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which are different from or additional to thoseavailable to the Guarantor, (iii) the Guarantor shall not have employed counselsatisfactory to the Indemnified Person to represent the Indemnified Personwithin a reasonable time after notice of the institution of such action or (iv)the Guarantor shall authorize the Indemnified Person to employ separate counselat the expense of the Guarantor.  TheGuarantor will not, without the prior written consent of the IndemnifiedPersons, settle or compromise or consent to the entry of any judgment withrespect to any pending or threatened claim, action, suit or proceeding inrespect of which indemnification or contribution may be sought hereunder(whether or not the Indemnified Persons are actual or potential parties to suchclaim or action) unless such settlement, compromise or consent includes anunconditional release of each Indemnified Person from all liability arising outof such claim, action, suit or proceeding.

SECTION 7.3 Compensation;Reimbursement of Expenses.

The Guarantoragrees:

(a)           to pay to the Guarantee Trustee fromtime to time such compensation for all services rendered by it hereunder as theparties shall agree to from time to time (which compensation shall not belimited by any provision of law in regard to the compensation of a trustee ofan express trust); and

(b)           except as otherwise expresslyprovided herein, to reimburse the Guarantee Trustee upon request for allreasonable expenses, disbursements and advances incurred or made by it inaccordance with any provision of this Guarantee (including the reasonable compensationand the expenses and disbursements of its agents and counsel), except any suchexpense, disbursement or advance as may be attributable to the negligence,willful misconduct or bad faith of the Guarantee Trustee.

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

ARTICLE VIII

MISCELLANEOUS 

SECTION 8.1 Successors and Assigns.

All guarantees andagreements contained in this Guarantee shall bind the successors, assigns,receivers, trustees and representatives of the Guarantor and shall inure to thebenefit of the Holders of the Capital Securities then outstanding.  Except in connection with any merger orconsolidation of the Guarantor with or into another entity or any sale,transfer or lease of the Guarantor’s assets to another entity, in each case tothe extent permitted under the Indenture, the Guarantor may not assign itsrights or delegate its obligations under this Guarantee without the priorapproval of the Holders of a Majority in liquidation amount of the CapitalSecurities.

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SECTION 8.2 Amendments.

Except with respect toany changes that do not adversely affect the powers, preferences, rights orinterests of Holders of the Capital Securities in any material respect (inwhich case no approval of Holders will be required), this Guarantee may beamended only with the prior approval of the Holders of a Majority inliquidation amount of the Capital Securities. The provisions of the Declaration with respect to amendments thereofshall apply equally with respect to amendments of the Guarantee.

SECTION 8.3 Notices.

All notices provided forin this Guarantee shall be in writing, duly signed by the party giving suchnotice, and shall be delivered, telecopied or mailed by first class mail, asfollows:

(a)           if given to the Guarantee Trustee, atthe Guarantee Trustee’s mailing address set forth below (or such other addressas the Guarantee Trustee may give notice of to the Holders of the CapitalSecurities): Wilmington Trust Company, Rodney Square North, 1100 North MarketStreet, Wilmington, Delaware 19890-0001, Attention: Corporate Capital Markets,Telecopy: 302-636-4140, Telephone: 302-651-1000;

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

(c)           if given to any Holder of the CapitalSecurities, at the address set forth on the books and records of the Issuer.

All such notices shall bedeemed to have been given when received in person, telecopied with receiptconfirmed, or mailed by first class mail, postage prepaid, except that if anotice or other document is refused delivery or cannot be delivered because ofa changed address of which no notice was given, such notice or other documentshall be deemed to have been delivered on the date of such refusal or inabilityto deliver.

SECTION 8.4 Benefit.

This Guarantee is solely for the benefit of theHolders of the Capital Securities and, subject to Section 2.1(a), is notseparately transferable from the Capital Securities.

SECTION 8.5 GoverningLaw.

THIS GUARANTEE SHALL BEGOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEWYORK, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES OF SAID STATE OTHER THANSECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

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SECTION 8.6 Counterparts.

This Guarantee maycontain more than one counterpart of the signature page and this Guarantee maybe executed by the affixing of the signature of the Guarantor and the GuaranteeTrustee to any of such counterpart signature pages.  All of such counterpart signature pages shallbe read as though one, and they shall have the same force and effect as thoughall of the signers had signed a single signature page.

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THIS GUARANTEE is executed as of the day and year first above written.
|        | HF FINANCIAL CORP.,       |
|--------|---------------------------|
|   | as Guarantor              |
|   |                      |
|   |                      |
|   | By:                       | /s/ Darrel L. Posegate |
|   |                      | Narne: | Darrel L. Posegate |
|   |                      | Title: | Executive Vice President,  Chief Financial Officer and  Treasurer |
|   |                      |
|   |                      |
|   |                      |
|        | WILMINGTON TRUST COMPANY, |
|   | as Guarantee Trustee      |
|   |                      |
|   |                      |
|   | By:                       | /s/ Geoffrey J. Lewis |
|   |                      | Narne: | Geoffrey J. Lewis |
|   |                      | Title: | Financial Services Officer |

 

Guarantee

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