Document:

ARTICLE I

 

 

 

 

 

 

 

 

 

 

 

 

 

GUARANTEE

AGREEMENT

 

 

HF

FINANCIAL CORP.

 

 

Dated

as of November 28, 2001

 

 

 

 

	

  ARTICLE I

  DEFINITIONS AND INTERPRETATION

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 1.01

  	

  Definitions and Interpretation

  	

   

  
	

   

  	

   

  	

   

  
	

  ARTICLE II

  POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 2.01

  	

  Powers and Duties of the Guarantee Trustee

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 2.02

  	

  Certain Rights of Guarantee Trustee

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 2.03

  	

  Not Responsible for Recitals or Issuance of Guarantee

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 2.04

  	

  Events of Default; Waiver

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 2.05

  	

  Events of Default; Notice

  	

   

  
	

   

  	

   

  	

   

  
	

  ARTICLE III

  GUARANTEE TRUSTEE

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 3.01

  	

  Guarantee Trustee; Eligibility

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 3.02

  	

  Appointment, Removal and Resignation of Guarantee Trustee

  	

   

  
	

   

  	

   

  	

   

  
	

  ARTICLE IV

  GUARANTEE

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 4.01

  	

  Guarantee

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 4.02

  	

  Waiver of Notice and Demand

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 4.03

  	

  Obligations Not Affected

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 4.04

  	

  Rights of Holders

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 4.05

  	

  Guarantee of Payment

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 4.06

  	

  Subrogation

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 4.07

  	

  Independent Obligations

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 4.08

  	

  Enforcement

  	

   

  
	

   

  	

   

  	

   

  
	

  ARTICLE V

  LIMITATION OF TRANSACTIONS; SUBORDINATION

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 5.01

  	

  Limitation of Transactions

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 5.02

  	

  Ranking

  	

   

  
	

   

  	

   

  	

   

  
	

  ARTICLE VI

  TERMINATION

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 6.0 1

  	

  Termination

  	

   

  

 

 

i

 

 

 

	

   

  	

   

  	

   

  
	

  ARTICLE VII

  INDEMNIFICATION

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 7.01

  	

  Exculpation

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 7.02

  	

  Indemnification

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 7.03

  	

  Compensation; Reimbursement of Expenses

  	

   

  
	

   

  	

   

  	

   

  
	

  ARTICLE VIII

  MISCELLANEOUS

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 8.0 1

  	

  Successors and Assigns

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 8.02

  	

  Amendments

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 8.03

  	

  Notices

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 8.04

  	

  Benefit

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 8.05

  	

  Governing Law

  	

   

  
	

   

  	

   

  	

   

  
	

  Section 8.06

  	

  Counterparts

  	

   

  
	

   

  	

   

  	

   

  

 

 

ii

 

 

 

GUARANTEE AGREEMENT

 

This GUARANTEE AGREEMENT

(the “Guarantee”), dated as of November 28, 2001, is executed and delivered by

HF Financial Corp., a savings and loan holding company incorporated in Delaware

(the “Guarantor”), and Wilmington Trust Company, a Delaware banking

corporation, as trustee (the “Guarantee Trustee”), for the benefit of the Holders (as

defined herein) from time to time of the Capital Securities (as defined herein)

of HF Financial Capital Trust I, a Delaware statutory business trust (the

“Issuer”).

WHEREAS, pursuant to an

Amended and Restated Declaration of Trust (the “Declaration”), dated as of

November 28, 2001, among the trustees named therein of the Issuer, HF Financial

Corp., as sponsor, and the Holders from time to time of undivided beneficial

interests in the assets of the Issuer, the Issuer is issuing on the date hereof

securities, having an aggregate liquidation amount of up to $10,000,000

designated the Floating Rate MMCapSSM (the “Capital Securities”);

 

WHEREAS, as incentive for

the Holders to purchase the Capital Securities, the Guarantor desires irrevocably

and unconditionally to agree, to the extent set forth in this Guarantee, to pay

to the Holders of Capital Securities the Guarantee Payments (as defined herein)

and to make certain other payments on the terms and conditions set forth

herein; and

NOW, THEREFORE, in

consideration of the purchase by each Holder of the Capital Securities, which

purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor

executes and delivers this Guarantee for the benefit of the Holders.

ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1 .01 Definitions and Interpretation.

In this Guarantee, unless

the context otherwise requires:

(a)           capitalized terms used in this Guarantee but not defined

in the preamble above have the respective meanings assigned to them in this

Section 1.1;

(b)           a term defined anywhere in

this Guarantee has the same meaning throughout;

(c)           all references to “the

Guarantee” or “this Guarantee” are to this Guarantee as modified, supplemented

or amended from time to time;

(d)           all references in this

Guarantee to Articles and Sections are to Articles and Sections of this

Guarantee, unless otherwise specified;

(e)           terms defined in the

Declaration as at the date of execution of this Guarantee have the same

meanings when used in this Guarantee, unless otherwise defined in this

Guarantee or unless the context otherwise requires; and

(f)            a reference to the singular

includes the plural and vice versa.

 

 

 

 

 

“Beneficiaries” means any Person to whom the Issuer

is or hereafter becomes indebted or liable.

“Corporate Trust Office” means the office of the

Guarantee Trustee at which the corporate trust business of the Guarantee

Trustee shall, at any particular time, be principally administered, which

office at the date of execution of this Guarantee Agreement is located at

Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001.

“Covered Person” means any Holder of Capital Securities.

“Debentures” means the junior subordinated

debentures of HF Financial Corp., designated the Floating Rate Junior

Subordinated Debt Securities due 2031, 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, with respect to

the Capital Securities, to the extent not paid or made by the Issuer: (i) any

accrued and unpaid Distributions (as defined in the

Declaration) which are required to be paid on such Capital

Securities to the extent the Issuer shall have funds available in the Property

Account (as defined in the Declaration) therefor at such time, (ii) the

Redemption Price (as defined in the Indenture) to the extent the Issuer

has funds available in the Property Account therefor at such time, with

respect to any Capital Securities called for redemption by the Issuer, (iii)

the Special Redemption Price (as defined in the Indenture) to the extent the

Issuer has funds available in the Property Account therefor at such time, with

respect to Capital Securities called for redemption upon the occurrence of a

Special Event (as defined in the Indenture), and (iv) upon a voluntary or

involuntary liquidation, dissolution, winding-up or termination of the Issuer

(other than in connection with the distribution of Debentures to the Holders of

the Capital Securities in exchange therefor as provided in the Declaration),

the lesser of (a) the aggregate of the liquidation amount and all accrued and

unpaid Distributions on the Capital Securities to the date of payment, to the

extent the Issuer shall have funds available in the Property Account therefor at

such time, and (b) the amount of assets of the Issuer remaining available for distribution to

Holders in liquidation of the Issuer after satisfaction of liabilities to

creditors of the Issuer as required by applicable law (in either case, the

“Liquidation Distribution”).

“Guarantee Trustee” means Wilmington Trust Company,

until a Successor Guarantee Trustee has been appointed and has accepted such

appointment pursuant to the terms of this Guarantee and

thereafter means each such Successor Guarantee Trustee.

“Holder” means any holder, as registered on the

books and records of the Issuer, of any Capital Securities; provided,

however, that, in determining whether the holders of the requisite

percentage of Capital Securities have given any request, notice, consent or

waiver hereunder, “Holder” shall not include the Guarantor or any Affiliate of

the Guarantor.

“Indemnified Person” means the Guarantee Trustee,

any Affiliate of the Guarantee Trustee (including in its individual capacity),

or any officers, directors, shareholders, members, partners, employees,

representatives, nominees, custodians or agents of the Guarantee Trustee.

 

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“Indenture” means the Indenture dated as of November

28, 2001, between the Guarantor and Wilmington Trust Company, not in its

individual capacity but solely as trustee, and any indenture

supplemental thereto pursuant to which the Debentures are to be issued to the Institutional

Trustee of the Issuer.

“Liquidation

Distribution” has the meaning set forth in the definition of “Guarantee

Payments” herein.

“Majority in liquidation

amount of the Capital Securities” means Holder(s) of outstanding Capital

Securities, voting together as a class, but separately from the holders of

Common Securities, of more than 50% of the aggregate liquidation amount

(including the stated amount that would be paid on redemption, liquidation or

otherwise, plus accrued and unpaid Distributions to, but excluding, the date

upon which the voting percentages are determined) of all Capital Securities

then outstanding.

“Obligations” means any

costs, expenses or liabilities (but not including liabilities related to taxes)

of the Issuer, other than obligations of the Issuer to pay to holders of any

Trust Securities the amounts due such holders pursuant to the terms of the

Trust Securities.

“Officer’s Certificate” means, with respect to any

Person, a certificate signed by one Authorized Officer of such Person. Any

Officer’s Certificate delivered with respect to compliance with a condition or

covenant provided for in this Guarantee shall include:

(a)           a statement that each

officer signing the Officer’s Certificate has read the covenant or condition

and the definitions relating thereto;

(b)           a brief statement of the

nature and scope of the examination or investigation undertaken by each officer

in rendering the Officer’s Certificate;

(c)           a statement that each such

officer has made such examination or investigation as, in such officer’s

opinion, is necessary to enable such officer to express an informed opinion as

to whether or not such covenant or condition has been complied with; and

(d)           a statement as to whether,

in the opinion of each such officer, such condition or covenant has

been complied with.

“Person” means a legal person, including any

individual, corporation, estate, partnership, joint venture, association, joint

stock company, limited liability company, trust, unincorporated association, or

government or any agency or political subdivision thereof, or any other entity

of whatever nature.

“Responsible Officer” means, with respect to the

Guarantee Trustee, any officer within the Corporate Trust Office of the

Guarantee Trustee with direct responsibility for the administration of any

matters relating to this Guarantee, including any Vice President, Assistant

Vice President, Secretary, Assistant Secretary or any other officer of the

Guarantee Trustee customarily performing functions similar to those performed

by any of the above designated officers and also, with respect to a particular

corporate trust matter, any other officer to whom such matter is referred

because of that officer’s knowledge of and familiarity with the particular

subject.

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“Successor Guarantee

Trustee” means a successor Guarantee Trustee possessing the qualifications to

act as Guarantee Trustee under Section 3.1.

“Trust Securities” means the Common Securities and the Capital

Securities.

ARTICLE

II

POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE

 

Section 2.01          Powers

and Duties of the Guarantee Trustee.

(a)           This Guarantee shall be held

by the Guarantee Trustee for the benefit of the Holders of the Capital

Securities, and the Guarantee Trustee shall not transfer this Guarantee to any

Person except a Holder of Capital Securities exercising his or her rights

pursuant to Section 4.4(b) or to a Successor Guarantee Trustee on acceptance by

such Successor Guarantee Trustee of its appointment to act as Successor

Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall

automatically vest in any Successor Guarantee Trustee, and such vesting and

cessation of title shall be effective whether or not conveyancing documents

have been executed and delivered pursuant to the appointment of such Successor

Guarantee Trustee.

(b)           If an Event of Default

actually known to a Responsible Officer of the Guarantee Trustee has occurred

and is continuing, the Guarantee Trustee shall enforce this Guarantee for the

benefit of the Holders of the Capital Securities.

(c)           The Guarantee Trustee,

before the occurrence of any Event of Default and after curing all Events of

Default that may have occurred, shall undertake to perform only such duties as

are specifically set forth in this Guarantee, and no implied covenants 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) and is actually known to a Responsible Officer of the Guarantee Trustee,

the Guarantee Trustee shall 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 prudent person would exercise or use under the circumstances in

the conduct of his or her own affairs.

(d)           No provision of this

Guarantee shall be construed to relieve the Guarantee Trustee from liability

for its own negligent action, its own negligent failure to act, or its own

willful misconduct, except that:

(i)            prior to the occurrence of

any Event of Default and after the curing or waiving of all such Events of

Default that may have occurred:

(A)          the duties and obligations of the Guarantee Trustee shall

be determined solely by the express provisions of this Guarantee, and the

Guarantee Trustee shall not be liable except for the performance of such duties

and obligations as are specifically set forth in this Guarantee, and no implied

covenants or obligations shall be read into this Guarantee against the

Guarantee Trustee; and

 

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(B)          in the absence of bad faith

on the part of the Guarantee Trustee, the Guarantee Trustee may conclusively

rely, as to the truth of the statements and the correctness of the opinions

expressed therein, upon any certificates or opinions furnished to the Guarantee

Trustee and conforming to the requirements of this Guarantee; but in the case

of any such certificates or opinions furnished to the Guarantee Trustee, the

Guarantee Trustee shall be under a duty to examine the same to determine

whether or not on their face they conform to the requirements of this

Guarantee;

(ii)           the Guarantee Trustee shall not be liable for any error of

judgment made in good faith by a Responsible Officer of the Guarantee Trustee,

unless it shall be proved that such Responsible Officer of the Guarantee

Trustee or the Guarantee Trustee was negligent in ascertaining the pertinent

facts upon which such judgment was made;

(iii)          the Guarantee Trustee shall not be liable with respect to

any action taken or omitted to be taken by it in good faith in accordance with

the written direction of the Holders of not less than a Majority in liquidation

amount of the Capital Securities relating to the time, method and place of

conducting any proceeding for any remedy available to the Guarantee Trustee, or

exercising any trust or power conferred upon the Guarantee Trustee under this

Guarantee; and

(iv)          no provision of this

Guarantee shall require the Guarantee Trustee to expend or risk its own funds

or otherwise incur personal financial liability in the performance of any of

its duties or in the exercise of any of its rights or powers, if the Guarantee

Trustee shall have reasonable grounds for believing that the repayment of such

funds is not reasonably assured to it under the terms of this Guarantee, or

security and indemnity, reasonably satisfactory to the Guarantee Trustee,

against such risk or liability is not reasonably assured to it.

Section

2.02 Certain Rights of Guarantee Trustee.

(a)                                  Subject to the

provisions of Section 2.1:

(i)            The Guarantee Trustee may

conclusively rely, and shall be fully protected in acting or refraining from

acting upon, any resolution, certificate, statement, instrument, opinion,

report, notice, request, direction, consent, order, bond, debenture, note,

other evidence of indebtedness or other paper or document believed by it to be

genuine and to have been signed, sent or presented by the proper party or

parties.

(ii)           Any direction or act of the Guarantor

contemplated by this Guarantee shall be sufficiently evidenced by an Officer’s

Certificate.

 

 

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(iii)          Whenever, in the administration of this Guarantee, the

Guarantee Trustee shall deem it desirable that a matter be proved or

established before taking, suffering or omitting any action hereunder, the

Guarantee Trustee (unless other evidence is herein specifically prescribed)

may, in the absence of bad faith on its part, request and conclusively rely

upon an Officer’s Certificate of the Guarantor which, upon receipt of such

request, shall be promptly delivered by the Guarantor.

(iv)          The Guarantee Trustee shall have no duty to see to any

recording, filing or registration of any instrument or other writing (or any

rerecording, refiling or registration thereof).

(v)           The Guarantee Trustee may

consult with counsel of its selection, and the advice or opinion of such

counsel with respect to legal matters shall be full and complete authorization

and protection in respect of any action taken, suffered or omitted by it

hereunder in good faith and in accordance with such advice or opinion. Such

counsel may be counsel to the Guarantor or any of its Affiliates and may

include any of its employees. The Guarantee Trustee shall have the right at any

time to seek instructions concerning the administration of this Guarantee from

any court of competent jurisdiction.

(vi)          The Guarantee Trustee shall be under no obligation to

exercise any of the rights or powers vested in it by this Guarantee at the

request or direction of any Holder, unless such Holder shall have provided to

the Guarantee Trustee such security and indemnity, reasonably satisfactory to

the Guarantee Trustee, against the costs, expenses (including attorneys’ fees

and expenses and the expenses of the Guarantee Trustee’s agents, nominees or

custodians) and liabilities that might be incurred by it in complying with such

request or direction, including such reasonable advances as may be requested by

the Guarantee Trustee; provided, however, that nothing contained in 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 the rights and

powers vested in it by this Guarantee.

(vii) The Guarantee Trustee

shall not be bound to 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 of

indebtedness or other paper or document, but the Guarantee Trustee, in its

discretion, may make such further inquiry or investigation into such facts or

matters as it may see fit.

(viii) The Guarantee Trustee

may execute any of the trusts or powers hereunder or perform any duties

hereunder either directly or by or through agents, nominees, custodians or

attorneys, and the Guarantee Trustee shall not be responsible for any

misconduct or negligence on the part of any agent or attorney appointed with

due care by it hereunder.

 

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(ix)           Any action taken by the Guarantee Trustee or its agents

hereunder shall bind the Holders of the Capital Securities, and the signature

of the Guarantee Trustee or its agents alone shall be sufficient and effective

to perform any such action. No third party shall be required to inquire as to

the authority of the Guarantee Trustee to so act or as to its compliance with

any of the terms and provisions of this Guarantee, both of which shall be

conclusively evidenced by the Guarantee Trustee’s or its agent’s taking such

action.

(x)            Whenever in the administration of this Guarantee the

Guarantee Trustee shall deem it desirable to receive instructions with respect

to enforcing any remedy or right or taking any other action hereunder, the

Guarantee Trustee (A) may request instructions from the Holders of a Majority

in liquidation amount of the Capital Securities, (B) may refrain from enforcing

such remedy or right or taking such other action until such instructions are

received and (C) shall be protected in conclusively relying on or acting in

accordance with such instructions.

(xi)           The Guarantee Trustee shall not be liable for any action

taken, suffered, or omitted to be taken by it in good faith and reasonably

believed by it to be authorized or within the discretion or rights or powers

conferred upon it by this Guarantee.

(xii)         No provision of this Guarantee shall be deemed to impose any

duty or obligation on the Guarantee Trustee to perform any act or acts or

exercise any right, power, duty or obligation conferred or imposed on it, in

any jurisdiction in which it shall be illegal or in which the Guarantee Trustee

shall be unqualified or incompetent in accordance with applicable law to

perform any such act or acts or to exercise any such right, power, duty or

obligation. No permissive power or authority available to the Guarantee Trustee

shall be construed to be a duty.

Section 2.03 Not

Responsible for Recitals or Issuance of Guarantee.

The recitals contained in

this Guarantee shall be taken as the statements of the Guarantor, and the

Guarantee Trustee does not assume any responsibility for their correctness. The

Guarantee Trustee makes no representation as to the validity or sufficiency of

this Guarantee.

Section 2.04 Events of

Default; Waiver.

(a)           An

Event of Default under this Guarantee will occur upon the failure of the

Guarantor to perform any of its payment or other obligations hereunder.

(b)          The

Holders of a Majority in liquidation amount of Capital Securities may, voting

or consenting as a class, on behalf of the Holders of all of the Capital

Securities, waive any past Event of Default and its consequences. Upon such

waiver, any such Event 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 any subsequent or other default or Event of Default or impair any

right consequent thereon.

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Section 2.05 Events of

Default: Notice.

(a)           The

Guarantee Trustee shall, within 90 days after the occurrence of an Event of

Default, transmit by mail, first class postage prepaid, to the Holders of the

Capital Securities, notices of all Events of Default actually known to a

Responsible Officer of the Guarantee Trustee, unless such defaults have been

cured before the giving of such notice, provided, however, that

the Guarantee Trustee shall be protected in withholding such notice if and so

long as a Responsible Officer of the Guarantee Trustee in good faith determines

that the withholding of such notice is in the interests of the Holders of the

Capital Securities.

(b)          The

Guarantee Trustee shall not be charged with knowledge of any Event of Default

unless the Guarantee Trustee shall have received written notice thereof from

the Guarantor or a Holder of the Capital Securities, or a Responsible Officer

of the Guarantee Trustee charged with the administration of this Guarantee

shall have actual knowledge thereof.

ARTICLE III 

GUARANTEE TRUSTEE

Section 3.01 Guarantee

Trustee; Eligibility

(a)           There

shall at all times be a Guarantee Trustee which shall:

(i)            not be an Affiliate of the Guarantor; and

(ii)           be a corporation organized and doing business under the

laws of the United States of America or any State or Territory thereof or of

the District of Columbia, or Person authorized under such laws to exercise

corporate trust powers, having a combined capital and surplus of at least 50

million U.S. dollars ($50,000,000), and subject to supervision or examination

by Federal, State, Territorial or District of Columbia authority. If such

corporation publishes reports of condition at least annually, pursuant to law

or to the requirements of the supervising or examining authority referred to

above, then, for the purposes of this Section 3.1(a)(ii), the combined capital

and surplus of such corporation shall be deemed to be its combined capital and

surplus as set forth in its most recent report of condition so published.

(b)           If

at any time the Guarantee Trustee shall cease to be eligible to so act under

Section 3.1(a), the Guarantee Trustee shall immediately resign in the manner

and with the effect set out in Section 3.2(c).

(c)           If

the Guarantee Trustee has or shall acquire any “conflicting interest” within

the meaning of Section 3.10(b) of the Trust Indenture Act, the Guarantee

Trustee shall either eliminate such interest or resign to the extent and in the

manner provided by, and subject to this Guarantee.

 

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Section 3.02 Appointment,

Removal and Resignation of Guarantee Trustee.

(a)           Subject

to Section 3.2(b), the Guarantee Trustee may be appointed or removed without

cause at any time by the Guarantor except during an Event of Default.

(b)          The

Guarantee Trustee shall not be removed in accordance with Section 3.2(a) until

a Successor Guarantee Trustee has been appointed and has accepted such

appointment by written instrument executed by such Successor Guarantee Trustee

and delivered to the Guarantor.

(c)           The

Guarantee Trustee appointed to office shall hold office until a Successor

Guarantee Trustee shall have been appointed or until its removal or

resignation. The Guarantee Trustee may resign from office (without need for

prior or subsequent accounting) by an instrument in writing executed by the

Guarantee Trustee and delivered to the Guarantor, which resignation shall not

take effect until a Successor Guarantee Trustee has been appointed and has

accepted such appointment by an instrument in writing executed by such

Successor Guarantee Trustee and delivered to the Guarantor and the resigning

Guarantee Trustee.

(d)           If

no Successor Guarantee Trustee shall have been appointed and accepted

appointment as provided in this Section 3.2 within 60 days after delivery of an

instrument of removal or resignation, the Guarantee Trustee resigning or being

removed may petition any court of competent jurisdiction for appointment of a

Successor Guarantee Trustee. Such court may thereupon, after prescribing such

notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee.

(e)           No

Guarantee Trustee shall be liable for the acts or omissions to act of any

Successor Guarantee Trustee.

(f)            Upon

termination of this Guarantee or removal or resignation of the Guarantee

Trustee pursuant to this Section 3.2, the Guarantor shall pay to the Guarantee

Trustee all amounts owing to the Guarantee Trustee under Sections 7.2 and 7.3

accrued to the date of such termination, removal or resignation.

ARTICLE

IV

GUARANTEE

Section 4.01 Guarantee.

(a)           The

Guarantor irrevocably and unconditionally agrees to pay in full to the Holders

the Guarantee Payments (without duplication of amounts theretofore paid by the

Issuer), as and when due, regardless of any defense (except as defense of

payment by the Issuer), right of set-off or counterclaim that the Issuer may

have or assert. The Guarantor’s obligation to make a Guarantee Payment may be

satisfied by direct payment of the required amounts by the Guarantor to the

Holders or by causing the Issuer to pay such amounts to the Holders.

 

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(b)           The

Guarantor hereby also agrees to assume any and all Obligations of the Issuer

and in the event any such Obligation is not so assumed, subject to the terms

and conditions hereof, the Guarantor hereby irrevocably and unconditionally

guarantees to each Beneficiary the full payment, when and as due, of any and

all obligations to such Beneficiaries. This Agreement is intended to be for the

Beneficiaries who have received notice hereof.

Section 4.02 Waiver of

Notice and Demand.

                The

Guarantor hereby waives notice of acceptance of this Guarantee and of any

liability to which it applies or may apply, presentment, demand for payment,

any right to require a proceeding first against the Issuer or any other Person

before proceeding against the Guarantor, protest, notice of nonpayment, notice

of dishonor, notice of redemption and all other notices and demands.

Section 4.03 Obligations

Not Affected.

                The

obligations, covenants, agreements and duties of the Guarantor under this

Guarantee shall in no way be affected or impaired by reason of the happening

from time to time of any of the following:

(a)           the

release or waiver, by operation of law or otherwise, of the performance or

observance by the Issuer of any express or implied agreement, covenant, term or

condition relating to the Capital Securities to be performed or observed by the

Issuer;

(b)          the

extension of time for the payment by the Issuer of all or any portion of the

Distributions, Redemption Price, Special Redemption Price, Liquidation

Distribution or any other sums payable under the terms of the Capital

Securities or the extension of time for the performance of any other obligation

under, arising out of, or in connection with, the Capital Securities (other

than an extension of time for payment of Distributions, Redemption Price,

Special Redemption Price, Liquidation Distribution or other sum payable that

results from the extension of any interest payment period on the Debentures or

any extension of the maturity date of the Debentures permitted by the

Indenture);

(c)           any

failure, omission, delay or lack of diligence on the part of the Holders to

enforce, assert or exercise any right, privilege, power or remedy conferred on

the Holders pursuant to the terms of the Capital Securities, or any action on

the part of the Issuer granting indulgence or extension of any kind;

(d)          the

voluntary or involuntary liquidation, dissolution, sale of any collateral,

receivership, insolvency, bankruptcy, assignment for the benefit of creditors,

reorganization, arrangement, composition or readjustment of debt of, or other

similar proceedings affecting, the Issuer or any of the assets of the Issuer;

(e)           any

invalidity of, or defect or deficiency in, the Capital Securities;

(f)           the

settlement or compromise of any obligation guaranteed hereby or hereby

incurred; or

 

10

 

(g)           any

other circumstance whatsoever that might otherwise constitute a legal or

equitable discharge or defense of a guarantor, it being the intent of this

Section 4.3 that the obligations of the Guarantor hereunder shall be absolute

and unconditional under any and all circumstances.

                There

shall be no obligation of the Holders to give notice to, or obtain consent of,

the Guarantor with respect to the happening of any of the foregoing.

Section 4.04 Rights of

Holders.

(a)           The

Holders of a Majority in liquidation amount of the Capital Securities have the

right to direct the time, method and place of conducting any proceeding for any

remedy available to the Guarantee Trustee in respect of this Guarantee or to

direct the exercise of any trust or power conferred upon the Guarantee Trustee

under this Guarantee; provided, however, that (subject to

Sections 2.1 and 2.2) the Guarantee Trustee shall have the right to decline to

follow any such direction if the Guarantee Trustee shall determine that the

actions so directed would be unjustly prejudicial to the Holders not taking

part in such direction or if the Guarantee Trustee being advised by counsel

determines that the action or proceeding so directed may not lawfully be taken

or if the Guarantor Trustee in good faith by its board of directors or

trustees, executive committees or a trust committee of directors or trustees

and/or Responsible Officers shall determine that the action or proceedings so

directed would involve the Guarantee Trustee in personal liability.

(b)          Any

Holder of Capital Securities may institute a legal proceeding directly against

the Guarantor to enforce the Guarantee Trustee’s rights under this Guarantee,

without first instituting a legal proceeding against the Issuer, the Guarantee

Trustee or any other Person. The Guarantor waives any right or remedy to

require that any such action be brought first against the Issuer, the Guarantee

Trustee or any other Person before so proceeding directly against the

Guarantor.

Section 4.05 Guarantee of

Payment.

This Guarantee creates a

guarantee of payment and not of collection.

Section 4.06 Subrogation.

                The

Guarantor shall be subrogated to all (if any) rights of the Holders of Capital

Securities against the Issuer in respect of any amounts paid to such Holders by

the Guarantor under this Guarantee; provided, however, that the Guarantor shall not (except to the extent

required by applicable provisions of law) be entitled to enforce or exercise

any right that it may acquire by way of subrogation or any indemnity,

reimbursement or other agreement, in all cases as a result of payment under

this Guarantee, if, after giving effect to any such payment, any amounts are

due and unpaid under this Guarantee. If any amount shall be paid to the

Guarantor in violation of the preceding sentence, the Guarantor agrees to hold

such amount in trust for the Holders and to pay over such amount to the

Holders.

 

11

 

Section 4.07 Independent

Obligations.

                The

Guarantor acknowledges that its obligations hereunder are independent of the

obligations of the Issuer with respect to the Capital Securities and that the

Guarantor shall be liable as principal and as debtor hereunder to make

Guarantee Payments pursuant to the terms of this Guarantee notwithstanding the

occurrence of any event referred to in subsections (a) through (g), inclusive,

of Section 4.3 hereof.

Section 4.08 Enforcement.

                A

Beneficiary may enforce the obligations of the Guarantor contained in Section

4.1(b) directly against the Guarantor, and the Guarantor waives any right or

remedy to require that any action be brought against the Issuer or any other

person or entity before proceeding against the Guarantor.

                The

Guarantor shall be subrogated to all rights (if any) of any Beneficiary against

the Issuer in respect of any amounts paid to the Beneficiaries by the Guarantor

under this Guarantee; provided, however, that the Guarantor shall

not (except to the extent required by applicable provisions of law) be entitled

to enforce or exercise 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 under this Guarantee, if, after giving effect to such payment, any

amounts are due and unpaid under this Guarantee.

ARTICLE V

LIMITATION OF TRANSACTIONS; SUBORDINATION

Section 5.01 Limitation

of Transactions.

                So

long as any Capital Securities remain outstanding, if (a) there shall have

occurred and be continuing an Event of Default or (b) the Guarantor shall have

selected an Extension Period as provided in the Declaration and such period, or

any extension thereof, 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 capital stock or (y) make any payment of principal of or

interest or premium, if any, on or repay, repurchase or redeem any debt

securities of the Guarantor that rank pari

passu in all respects with or junior in interest to the Debentures

(other than (i) payments under this Guarantee, (ii) repurchases, redemptions or

other acquisitions of shares of capital stock of the Guarantor (A) in

connection with any employment contract, benefit plan or other similar

arrangement with or for the benefit of one or more employees, officers,

directors, or consultants, (B) in connection with a dividend reinvestment or

stockholder stock purchase plan or (C) in connection with the issuance of

capital stock of the Guarantor (or securities convertible into or exercisable

for such capital stock), as consideration in an acquisition transaction entered

into prior to occurrence of the Event of Default or the applicable Extension

Period, (iii) as a result of any exchange of 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 series of the Guarantor’s capital stock or of any

class or series of the Guarantor’s indebtedness for any class or series of the

Guarantor’s capital stock, (iv) the purchase of fractional interests in shares

of the Guarantor’s capital stock pursuant to the conversion or exchange

provisions of such capital stock or the security being converted or exchanged,

(v) any declaration of a dividend in connection with any stockholder’s rights

plan, or the issuance of rights, stock or other property under any

stockholder’s rights plan, or the redemption or repurchase of rights pursuant

thereto, or (vi) any dividend in the form of stock, warrants, options or other

rights where the dividend stock or the stock issuable upon exercise of such

warrants, options or other rights is the same stock as that on which the

dividend is being paid or ranks pari passu with

or junior to such stock).

 

12

 

Section 5.02 Ranking.

This Guarantee will

constitute an unsecured obligation of the Guarantor and will rank subordinate

and 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 to the foregoing provisions of this

Guarantee and the other terms set forth herein.

The right of the Guarantor

to participate in any distribution of assets of any of its subsidiaries upon

any such subsidiary’s liquidation or reorganization or otherwise is subject to

the prior claims of creditors of that subsidiary, except to the extent the

Guarantor may itself be recognized as a creditor of that subsidiary.

Accordingly, the Guarantor’s obligations under this Guarantee will be

effectively subordinated to all existing and future liabilities of the

Guarantor’s subsidiaries, and claimants should look only to the assets of the

Guarantor for payments thereunder. This Guarantee does not limit the incurrence

or issuance of other secured or unsecured debt of the Guarantor, including

Senior Indebtedness of the Guarantor, under any indenture or agreement that the

Guarantor may enter into in the future or otherwise.

ARTICLE

VI

TERMINATION

Section 6.01 Termination.

This Guarantee shall

terminate as to the Capital Securities (i) upon full payment of the Redemption

Price or the Special Redemption Price, as the case may be, of all Capital

Securities then outstanding, (ii) upon the distribution of all of the

Debentures to the Holders of all of the Capital Securities or (iii) upon full

payment of the amounts payable in accordance with the Declaration upon

dissolution of the Issuer. This Guarantee will continue to be effective or will

be reinstated, as the case may be, if at any time any Holder of Capital

Securities must restore payment of any sums paid under the Capital Securities

or under this Guarantee.

ARTICLE VII

INDEMNIFICATION

Section 7.01 Exculpation.

(a)           No Indemnified Person shall

be liable, responsible or accountable in damages or otherwise to the

Guarantor or any Covered Person for any loss, damage or claim incurred

by reason of any act or omission performed or omitted by such Indemnified

Person in good faith in accordance with this Guarantee and in a manner that

such Indemnified Person reasonably believed to be within the scope of the

authority conferred on such Indemnified Person by this Guarantee or by law,

except that an Indemnified Person shall be liable for any such loss, damage or

claim incurred by reason of such Indemnified Person’s negligence or willful

misconduct with respect to such acts or omissions.

 

13

 

(b)           An Indemnified Person shall

be fully protected in relying in good faith upon the records of the Issuer or

the Guarantor and upon such information, opinions, reports or statements

presented to the Issuer or the Guarantor by any Person as to matters the

Indemnified Person reasonably believes are within such other Person’s

professional or expert competence and who, if selected by such Indemnified

Person, has been selected with reasonable care by such Indemnified Person,

including information, opinions, reports or statements as to the value and

amount of the assets, liabilities, profits, losses, or any other facts

pertinent to the existence and amount of assets from which Distributions to

Holders of Capital Securities might properly be paid.

Section

7.02 Indemnification.

(a)           The Guarantor agrees to

indemnify each Indemnified Person for, and to hold each Indemnified Person

harmless against, any and all loss, liability, damage, claim or expense

incurred without negligence or willful misconduct on the part of the

Indemnified Person, arising out of or in connection with the acceptance or administration

of the trust or trusts hereunder, including but not limited to the costs and

expenses (including reasonable legal fees and expenses) of the Indemnified

Person defending itself against, or investigating, any claim or liability in

connection with the exercise or performance of any of the Indemnified Person’s

powers or duties hereunder. The obligation to indemnify as set forth in this

Section 7.2 shall survive the resignation or removal of the Guarantee Trustee

and the termination of this Guarantee.

(b)           Promptly after receipt by an

Indemnified Person under this Section 7.2 of notice of the commencement of any

action, such Indemnified Person will, if a claim in respect thereof is to be

made against the Guarantor under this Section 7.2, notify the Guarantor in

writing of the commencement thereof; but the failure so to notify the Guarantor

(i) will not relieve the Guarantor from liability under paragraph (a) above

unless and to the extent that the Guarantor did not otherwise learn of such

action and such failure results in the forfeiture by the Guarantor of

substantial rights and defenses and (ii) will not, in any event, relieve the

Guarantor from any obligations to any Indemnified Person other than the

indemnification obligation provided in paragraph (a) above. The Guarantor shall

be entitled to appoint counsel of the Guarantor’s choice at the Guarantor’s

expense to represent the Indemnified Person in any action for which

indemnification is sought (in which case the Guarantor shall not thereafter be

responsible for the fees and expenses of any separate counsel

retained by the Indemnified Person or Persons except as set forth

below); provided, however, that such counsel shall be

satisfactory to the Indemnified Person. Notwithstanding the Guarantor’s

election to appoint counsel to represent the Guarantor in an action, the

Indemnified Person shall have the right to employ separate counsel (including

local counsel), and the Guarantor shall bear the reasonable fees, costs and

expenses of such separate counsel if (i) the use of counsel chosen by the

Guarantor to represent the Indemnified Person would present such counsel with a

conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action

include both the Indemnified Person and the Guarantor and the Indemnified

Person shall have reasonably concluded that there may be legal defenses

available to it and/or other Indemnified Persons which are different from or

additional to those available to the Guarantor, (iii) the Guarantor shall not

have employed counsel satisfactory to the Indemnified Person to represent the

Indemnified Person within a reasonable time after notice of the institution of

such action or (iv) the Guarantor shall authorize the Indemnified Person to

employ separate counsel at the expense of the Guarantor. The Guarantor will

not, without the prior written consent of the Indemnified Persons, settle or

compromise or consent to the entry of any judgment with respect to any pending

or threatened claim, action, suit or proceeding in respect of which

indemnification or contribution may be sought hereunder (whether or not the

Indemnified Persons are actual or potential parties to such claim or action)

unless such settlement, compromise or consent includes an unconditional release

of each Indemnified Person from all liability arising out of such claim,

action, suit or proceeding.

 

14

 

Section 7.03 Compensation; Reimbursement of Expenses

The Guarantor agrees:

(a)           to pay to the Guarantee

Trustee from time to time such compensation for all services rendered by it

hereunder as the parties shall agree to from time to time (which compensation

shall not be limited by any provision of law in regard to the compensation of a

trustee of an express trust); and

(b)           except as otherwise

expressly provided herein, to reimburse the Guarantee Trustee upon request for

all reasonable expenses, disbursements and advances incurred or made by it in

accordance with any provision of this Guarantee (including the reasonable

compensation and the expenses and disbursements of its agents and counsel),

except any such expense, disbursement or advance as may be attributable to its

negligence or willful misconduct.

The provisions of this

Section 7.3 shall survive the resignation or removal of the Guarantee Trustee

and the termination of this Guarantee.

ARTICLE VIII

MISCELLANEOUS

Section 8.01 Successors and Assigns.

All guarantees and

agreements contained in this Guarantee shall bind the successors, assigns,

receivers, trustees and representatives of the Guarantor and shall inure to the

benefit of the Holders of the Capital Securities then outstanding. Except in

connection with any merger or consolidation 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, to the extent permitted under the Indenture, the

Guarantor may not assign its rights or delegate its obligations under this

Guarantee without the prior approval of the Holders of not less than a Majority

in liquidation amount of the Capital Securities.

 

15

 

Section 8.02 Amendments.

Except with respect to any

changes that do not adversely affect the rights of Holders of the Capital

Securities in any material respect (in which case no consent of Holders will be

required), this Guarantee may be amended only with the prior approval of the

Holders of not less than a Majority in liquidation amount of the Capital

Securities. The provisions of the Declaration with respect to amendments

thereof shall apply equally with respect to amendments of the Guarantee.

Section 8.03 Notices.

All notices provided for in

this Guarantee shall be in writing, duly signed by the party giving such

notice, and shall be delivered, telecopied or mailed by first class mail, as

follows:

(a)           If given to the Guarantee

Trustee, at the Guarantee Trustee’s mailing address set forth below (or such

other address as the Guarantee Trustee may give notice of to the Holders of the

Capital Securities):

Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-000 1

Attention: Corporate Trust Administration

Telecopy: 302-65 l-8882

Telephone: 302-65 1- 1000

 

(b)           If given to the Guarantor,

at the Guarantor’s mailing address set forth below (or such other address as

the Guarantor may give notice of to the Holders of the Capital Securities and

to the Guarantee Trustee):

HF Financial Corp. 225 South

Main Avenue

Sioux Falls, South Dakota 57104

Attention: Curtis L. Hage

Telecopy: 605-333-7621

Telephone: 605-333-7556

 

(c)            If given to any Holder of

the Capital Securities, at the address set forth on the books and records of

the Issuer.

All such notices shall be deemed to have been given

when received in person, telecopied with receipt confirmed, or mailed by first

class mail, postage prepaid except that if a notice or other document is

refused delivery or cannot be delivered because of a changed address of which

no notice was given, such notice or other document shall be deemed to have been

delivered on the date of such refusal or inability to deliver.

16

 

Section 8.04 Benefit.

This Guarantee is solely for the benefit of the

Holders of the Capital Securities and, subject to Section 2.1(a), is not

separately transferable from the Capital Securities.

Section 8.05 Governing Law.

THIS GUARANTEE SHALL BE

GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW

YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

Section

8.06 Counterparts.

This Guarantee may contain more than one counterpart

of the signature page and this Guarantee may be executed by the affixing of the

signature of the Guarantor and the Guarantee Trustee to any of such counterpart

signature pages. All of such counterpart signature pages shall be read as

though one, and they shall have the same force and effect as though all of the

signers had signed a single signature page.

 

17

 

THIS GUARANTEE is

executed as of the day and year first above written.

	

   

  	

  HF FINANCIAL CORP.,

  
	

   

  	

  as Guarantor

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Curtis L. Hage

  
	

   

  	

   

  	

  Name:

  	

  Curtis L. Hage

  
	

   

  	

   

  	

  Title:

  	

  Chairman, President and Chief Executive Officer

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  WILMINGTON TRUST COMPANY,

  
	

   

  	

  as Guarantee

  Trustee

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

  Name:

  	

  Anita Dallago

  
	

   

  	

   

  	

  Title:

  	

  Financial Services Officer

  

 

Guarantee

 

 

18

 

THIS

GUARANTEE is executed as of the day and year first above written.

 

	

   

  	

  HF FINANCIAL CORP.,

  
	

   

  	

  as Guarantor

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

  Name:

  	

  Curtis L. Hage

  
	

   

  	

   

  	

  Title:

  	

  Chairman, President and Chief Executive Officer

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  WILMINGTON TRUST COMPANY,

  
	

   

  	

  as Guarantee

  Trustee

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   /s/

  Anita Dallago

  
	

   

  	

   

  	

  Name:

  	

  Anita Dallago

  
	

   

  	

   

  	

  Title:

  	

  Financial Services Officer

  

 

 

Guarantee

 

 

19ARTICLE I DEFINITIONS

 

 

HF FINANCIAL CORP.

 

an Issuer

 

 

INDENTURE

 

Dated as of November 28,

2001

 

 

 

WILMINGTON TRUST COMPANY

 

as Trustee

 

 

FLOATING RATE JUNIOR

SUBORDINATED DEBT SECURITIES DUE 2031

 

 

 

 

	

  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

  Interest 

  	

   

  	

   

  
	

  Section

  3.07

  	

   

  	

  Compliance

  with Consolidation Provisions

  	

   

  	

   

  
	

  Section

  3.08

  	

   

  	

  Limitation

  on Dividends 

  	

   

  	

   

  
	

  Section

  3.09

  	

   

  	

  Covenants

  as to the Trust

  	

   

  	

   

  
	

  ARTICLE IV

  
	

  LISTS AND REPORTS BY THE COMPANY AND THE

  TRUSTEE

  
	

  Section

  4.01

  	

   

  	

  Securityholders’

  Lists .

  	

   

  	

   

  
	

  Section

  4.02

  	

   

  	

  Preservation

  and Disclosure of Lists.

  	

   

  	

   

  

 

 

i

 

	

  ARTICLE V

  
	

  REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS

  UPON AN EVENT OF DEFAULT

  
	

  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 

  	

   

  	

   

  
	

  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 

  	

   

  	

   

  

 

 

ii

 

	

  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

  	

   

  	

   

  
	

  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

  	

   

  	

   

  

 

 

iii

 

	

  ARTICLE XI

  
	

  CONSOLIDATION, MERGER, SALE, CONVEYANCE AND

  LEASE

  
	

  Section

  11.0l

  	

   

  	

  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

  	

   

  	

  Non-Business

  Days

  	

   

  	

   

  
	

  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

  	

   

  	

   

  

 

 

iv

 

	

  ARTICLE XV

  
	

  SUBORDINATION OF DEBT SECURITIES

  
	

  Section

  15.01

  	

   

  	

  Agreement

  to Subordinate

  	

   

  	

   

  
	

  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

  	

   

  	

   

  

 

 

v

 

THIS INDENTURE, dated as of

November 28, 2001, between HF FINANCIAL CORP., a savings and loan holding

company incorporated in Delaware (hereinafter sometimes called the “Company”),

and Wilmington Trust Company, a Delaware banking corporation, as trustee

(hereinafter sometimes called the “Trustee”),

W

I T N E S S E T H :

WHEREAS, for its lawful

corporate purposes, the Company has duly authorized the issuance of its

Floating Rate Junior Subordinated Debt Securities due 2031 (the “Debt

Securities”) under this Indenture and to provide, among other things, for the

execution and authentication, delivery and administration thereof, the Company

has duly authorized the execution of this Indenture,

NOW,

THEREFORE, This Indenture Witnesseth:

In consideration of the

premises, and the purchase of the Debt Securities by the holders thereof, the

Company covenants and agrees with the Trustee for the equal and proportionate

benefit of the respective holders from time to time of the Debt Securities as

follows:

ARTICLE I

DEFINITIONS

SECTION 1.01  Definitions.

The terms defined in this Section 1.01 (except as

herein otherwise expressly provided or unless the context otherwise requires)

for all purposes of this Indenture and of any indenture supplemental hereto

shall have the respective meanings specified in this Section 1.0l. All

accounting terms used herein and not expressly defined shall have the meanings

assigned to such terms in accordance with generally accepted accounting

principles and the term “generally accepted accounting principles” means such

accounting principles as are generally accepted 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 to any particular Article, Section

or other subdivision.

“Additional Interest” shall have the meaning set forth in Section 3.06.

“Additional Provisions” shall have the meaning set forth in Section

15.01.

“Authenticating Agent” means any agent or agents of

the Trustee which at the time shall be appointed and acting pursuant to Section

6.12.

“Bankruptcy Law” means Title 11, U.S. Code, or any

similar federal or state law for the relief of debtors.

“Board of Directors” means

the board of directors or the executive committee or any other duly authorized

designated officers of the Company.

 

 

1

 

“Board Resolution” means a copy of a resolution

certified by the Secretary or an Assistant Secretary of the Company to have

been duly adopted by the Board of Directors and to be in full force and effect

on the date of such certification and delivered to the Trustee.

“Business Day” means any day other than a Saturday,

Sunday or any other day on which banking institutions in Wilmington, Delaware,

New York City or Sioux Falls, South Dakota are permitted or required by any

applicable law or executive order to close.

“Calculation Agent” means the Person identified as

“Trustee” in the first paragraph hereof with respect to the Debt Securities and

the Institutional Trustee with respect to the Trust Securities.

“Capital Securities” means undivided beneficial

interests in the assets of 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 is

continuing, the rights of holders of such Common Securities to payment in

respect of distributions and payments upon liquidation, redemption and

otherwise are subordinated to the rights of holders of such Capital Securities.

“Capital Securities Guarantee” means the guarantee

agreement that the Company will enter into with Wilmington Trust Company or

other Persons that operates directly or indirectly for the benefit of holders

of Capital Securities of the Trust.

“Capital Treatment Event”

means the receipt by the Company and the Trust of an opinion of counsel

experienced in such matters to the effect that, as a result of (a) any

amendment to, or change in, the laws, rules or regulations of the United States

or any political subdivision thereof or therein, or any rules, guidelines or

policies of an applicable regulatory authority for the Company or (b) any

official or administrative pronouncement or action or decision interpreting or

applying such laws, rules or regulations, which amendment or change is

effective or which pronouncement, action or decision is announced on or after

the date of original issuance of the Debt Securities, there is more than an

insubstantial risk that the Company will not, within 90 days of the date of

such opinion, be entitled to treat an amount equal to the aggregate Liquidation

Amount of the Capital Securities as “Tier 1 Capital” (or its then equivalent if

the Company were subject to such capital requirement) applied as if the Company

(or its successors) were a bank holding company for purposes of the capital

adequacy guidelines of the Federal Reserve (or any successor regulatory

authority with jurisdiction over bank holding companies), or any capital

adequacy guidelines as then in effect and applicable to the Company, provided, however,

that the distribution of the Debt Securities in connection with the liquidation

of the Trust by the Company shall not in and of itself constitute a Capital

Treatment Event unless such liquidation shall have occurred in connection with

a Tax Event or an Investment Company Event.

“Certificate” means a certificate signed by any one

of the principal executive officer, the principal

financial officer or the principal accounting officer of the Company.

“Common Securities” means

undivided beneficial interests in the assets of 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 is continuing, the

rights of holders of such Common Securities to payment in respect of

distributions and payments upon liquidation, redemption and otherwise are

subordinated to the rights of holders of such Capital Securities.

 

2

 

“Company” means HF Financial Corp., a savings and

loan holding company incorporated in Delaware, and, subject to the provisions

of Article XI, shall include its successors and assigns.

“Comparable Treasury Issue” means with respect to

any Special Redemption Date, the United States Treasury security selected by

the Quotation Agent as having a maturity comparable to the Remaining Life that

would be utilized, at the time of selection and in accordance with customary

financial practice, in pricing new issues of corporate debt securities of

comparable maturity to the Remaining Life. If no United States Treasury

security has a maturity which is within a period from three months before to

three months after December 8, 2006, the two most closely corresponding United

States Treasury securities shall be used as the Comparable Treasury Issue, and

the Treasury Rate shall be interpolated or extrapolated on a straight-line

basis, rounding to the nearest month using such securities.

“Comparable Treasury Price” means (a) the average of

five Reference Treasury Dealer Quotations for such Special Redemption Date,

after excluding the highest and lowest such Reference Treasury Dealer

Quotations, or (b) if the Trustee receives fewer than five such Reference

Treasury Dealer Quotations, the average of all such Quotations.

“Debt Security” or “Debt

Securities” has the meaning stated in the first recital of this Indenture.

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

“Declaration” means the Amended and Restated

Declaration of Trust of the Trust, as amended or supplemented from time to

time.

“Default” means any event,

act or condition that with notice or lapse of time, 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 has continued for the period of time, if any, and after the

giving of the notice, if any, therein designated.

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

“Federal Reserve” means the

Board of Governors of the Federal Reserve System.

 

 

3

 

“Indenture” means this instrument as originally

executed or, if amended or 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 June 8th and December

8th of each year, commencing on June 8, 2002, during the term of this

Indenture.

“Interest Rate” means a per

annum rate of interest, reset semi-annually, equal to LIBOR, as determined on

the LIBOR Determination Date immediately preceding each Interest Payment Date,

plus 3.75%; provided, that the

applicable Interest Rate may not exceed 11.0% through the Interest Payment Date

in December, 2006.

“Investment Company Event”

means the receipt by the Company and the Trust 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 in interpretation or application of law or

regulation by any legislative body, court, governmental agency or regulatory

authority, there is more than an insubstantial risk that the Trust is or,

within 90 days of the date of such opinion will be, considered an “investment

company” that is required to be registered under the Investment Company Act of

1940, as amended, which change or prospective change becomes effective or would

become effective, as the case may be, on or after the date of the original issuance

of the Debt Securities.

“LIBOR” means the London

Interbank Offered Rate for six-month Eurodollar deposits in Europe as

determined by the Calculation Agent according to Section 2.10(b).

“LIBOR Banking Day” has the

meaning set forth in Section 2.10(b)(1). 

“LIBOR Business Day” has the

meaning set forth in Section 2.10(b)(1). 

“LIBOR Determination Date”

has the meaning set forth in Section 2.10(b). 

“Liquidation Amount” means

the stated amount of $1,000 per Trust Security. 

“Maturity Date” means

December 8,2031.

“Officers’ Certificate”

means a certificate signed by the Chairman of the Board, the Vice Chairman, the

President or any Vice President, and by the Chief Financial Officer, the

Treasurer, an Assistant Treasurer, the Comptroller, an Assistant Comptroller,

Secretary or an Assistant Secretary of the Company, and delivered to the

Trustee. Each such certificate shall include the statements provided for in

Section 14.06 if and to the extent required by the provisions of such Section.

“Opinion of Counsel” means

an opinion in writing signed by legal counsel, who may be an employee of or

counsel to the Company, or may be other counsel reasonably satisfactory to the

Trustee. Each such opinion shall include the statements provided for in Section

14.06 if and to the extent required by the provisions of such Section.

 

 

4

 

“OTS” means the Office of Thrift Supervision.

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 the Authenticating Agent under this Indenture, except

(a)           Debt Securities theretofore

canceled by the Trustee or the Authenticating Agent or delivered to the Trustee

for cancellation;

(b)           Debt Securities, or portions

thereof, for the payment or redemption of which moneys in the necessary amount

shall have been deposited in trust with the Trustee or with any paying agent

(other than the Company) or shall have been set aside and segregated in trust

by the Company (if the Company shall act as its own paying agent); provided, that, if such Debt Securities,

or portions thereof, are to be redeemed prior to maturity thereof, notice of

such redemption shall have been given as provided in Articles Ten and Fourteen

or provision satisfactory to the Trustee shall have been made for giving such

notice; and

(c)           Debt Securities paid

pursuant to Section 2.06 or in lieu of or in substitution for which other Debt

Securities shall have been authenticated and delivered pursuant to the terms of

Section 2.06 unless proof satisfactory to the Company and the Trustee is

presented that any such Debt Securities are held by bona fide holders in due

course.

“Person” means any individual,

corporation, limited liability company, partnership, joint venture,

association, joint-stock company, trust, unincorporated organization or

government or any agency or political subdivision thereof.

“Predecessor Security” of any particular Debt Security

means every previous Debt Security evidencing all or a portion of the same debt

as that evidenced by such particular Debt Security; and, for the purposes of

this definition, any Debt Security authenticated and delivered under Section

2.06 in lieu of a lost, destroyed or stolen Debt Security shall be deemed to

evidence the same debt as the lost, destroyed or stolen Debt Security.

“Primary Treasury Dealer” means a primary United

States Government securities dealer in New York City.

“Principal Office of the Trustee,” or other similar

term, means the office of the Trustee, at which at any particular time its

corporate trust business shall be principally administered, which at all times

shall be located within the United States and at the time of the execution of

this Indenture shall be Rodney Square North, 1100 North Market Street,

Wilmington, Delaware 19890-0001.

“Quotation Agent” means Salomon Smith Barney Inc.

and its successors; provided, however, that if the foregoing shall cease

to be a Primary Treasury Dealer, the Company shall substitute therefor another

Primary Treasury Dealer.

“Redemption Date” has the

meaning set forth in Section 10.01.

 

 

5

 

“Redemption Price” means

100% of the principal amount of the Debt Securities being redeemed plus accrued

and unpaid interest on such Debt Securities to the Redemption Date or, in the

case of a redemption due to the occurrence of a Special Event, to the Special

Redemption Date if such Special Redemption Date is on or after December 8,

2006.

“Reference Treasury Dealer”

means (i) the Quotation Agent and (ii) any other Primary Treasury Dealer

selected by the Trustee after consultation with the Company.

“Reference Treasury Dealer

Quotations” means, with respect to each Reference Treasury Dealer and any

Special Redemption Date, the average, as determined by the Quotation Agent, of

the bid and asked prices for the Comparable Treasury Issue (expressed in each

case as a percentage of its principal amount) quoted in writing to the Trustee

by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the

third Business Day preceding such Special Redemption Date.

“Remaining Life” means, with respect to any Debt

Security, the period from the Special Redemption Date for such Debt Security to

December 8, 2006.

“Responsible Officer” means,

with respect to the Trustee, any officer within the Principal Office of the

Trustee with direct responsibility for the administration of the Indenture,

including any vice-president, any assistant vice-president, any secretary, any

assistant secretary, the treasurer, any assistant treasurer, any trust officer

or other officer of the Principal Trust Office of the Trustee customarily

performing functions similar to those performed by any of the above designated

officers and also means, with respect to a particular corporate trust matter,

any other officer to whom such matter is referred because of that officer’s

knowledge of and familiarity with the particular subject.

“Securityholder, “ “holder

of Debt Securities” or other similar terms, means any Person in whose name at

the time a particular Debt Security is registered on the Debt Security

Register.

“Senior Indebtedness” means,

with respect to the Company, (i) the principal, premium, if any, and interest

in respect of (A) indebtedness of the Company 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 the Company issued or assumed as the deferred

purchase price of property, all conditional sale obligations of the Company and

all obligations of the Company under any title retention agreement (but

excluding trade accounts payable arising in the ordinary course of business);

(iv) all obligations of the Company for the reimbursement of any letter of

credit, any banker’s acceptance, any security purchase facility, any repurchase

agreement or similar arrangement, any interest rate swap, any other hedging

arrangement, any obligation under options or any similar credit or other

transaction; (v) all obligations of the type referred to in clauses (i) through

(iv) above of other Persons for the payment of which the Company is responsible

or liable as obligor, guarantor or otherwise; and (vi) all obligations of the

type referred to in clauses (i) through (v) above of other Persons secured by

any lien on any property or asset of the Company (whether or not such

obligation is assumed by the Company), whether incurred on or prior to the date

of this Indenture or thereafter incurred, unless, with the prior approval of

the OTS if not otherwise generally approved, in the instrument creating or

evidencing the same or pursuant to which the same is outstanding, it is

provided that such obligations are not superior or are pair passu in right of

payment to the Debt Securities.

 

 

6

 

“Special Event” means any of a Tax Event, an

Investment Company Event or a Capital Treatment Event.

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

“Special Redemption Price” means (1) if the Special

Redemption Date is before December 8, 2006, the greater of (a) 100% of the

principal amount of the Debt Securities being redeemed pursuant to Section

10.02 or (b) as determined by a Quotation Agent, the sum of the present values

of the principal amount payable as part of the Redemption Price with respect to

a redemption as of December 8, 2006, together with the present value of

interest payments calculated at a fixed per annum rate of interest equal to

9.95% over the Remaining Life of such Debt Securities, discounted to the

Special Redemption Date on a semi-annual basis (assuming a 360-day year

consisting of twelve 30-day months) at the Treasury Rate plus 0.50%, plus, in

the case of either (a) or (b), accrued and unpaid interest on such Debt

Securities to the Special Redemption Date and (2) if the Special Redemption

Date is on or after December 8, 2006, the Redemption Price for such Special

Redemption Date.

“Subsidiary” means, with respect to any Person, (i)

any corporation at least a majority of the outstanding voting stock of which is

owned, directly or indirectly, by such Person or by one or more of its

Subsidiaries, or by such Person and one or more of its Subsidiaries, (ii) any

general partnership, joint venture or similar entity, at least a majority of

the outstanding partnership or similar interests of which shall at the time be

owned by such Person, or by one or more of its Subsidiaries, or by such Person

and one or more of its Subsidiaries, and (iii) any limited partnership of which

such Person or any of its Subsidiaries is a general partner. For the purposes

of this definition, “voting stock” means shares, interests, participations or

other equivalents in the equity interest (however designated) in such Person

having ordinary voting power for the election of a majority of the directors

(or the equivalent) of such Person, other than shares, interests,

participations or other equivalents having such power only by reason of the

occurrence of a contingency.

“Tax Event” means the

receipt by the Company and the Trust of an opinion of counsel experienced in

such matters to the effect that, as a result of any amendment to or change

(including any announced prospective change) in the laws or any regulations

thereunder of the United States or any political subdivision or taxing

authority thereof or therein, or as a result of any official administrative

pronouncement (including any private letter ruling, technical advice

memorandum, regulatory procedure, notice or announcement (an “Administrative

Action”)) or judicial decision interpreting or applying such laws or

regulations, regardless of whether such Administrative Action or judicial

decision is issued to or in connection with a proceeding involving the Company

or the Trust and whether or not subject to review or appeal, which amendment,

clarification, change, Administrative Action or decision is enacted,

promulgated or announced, in each case on or after the date of original

issuance 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 opinion,

subject to United States federal income tax with respect to income received or

accrued on the Debt Securities; (ii) interest payable by the Company on the

Debt Securities is not, or within 90 days of the date of such opinion, will not

be, deductible by the Company, in whole or in part, for United States federal income

tax purposes; or (iii) the Trust is, or will be within 90 days of the date of

such opinion, subject to more than a de minimis amount of other taxes, duties,

assessments or other governmental charges.

 

7

 

“Treasury Rate” means (i)

the yield, under the heading which represents the average for the week

immediately prior to the date of calculation, appearing in the most recently

published statistical release designated H.15 (519) or any successor

publication which is published weekly by the Federal Reserve and which

establishes yields on actively traded United States Treasury securities

adjusted to constant maturity under the caption “Treasury Constant Maturities,”

for the maturity corresponding to the Remaining Life (if no maturity is within

three months before or after the Remaining Life, yields for the two published

maturities most closely corresponding to the Remaining Life shall be determined

and the Treasury Rate shall be interpolated or extrapolated from such yields on

a straight-line basis, rounding to the nearest month) or (ii) if such release

(or any successor release) is not published during the week preceding the

calculation date or does not contain such yields, the rate per annum equal to

the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,

calculated using a price for the Comparable Treasury Issue (expressed as a

percentage of its principal amount) equal to the Comparable Treasury Price for

such Special Redemption Date. The Treasury Rate shall be calculated on the

third Business Day preceding the Special Redemption Date.

“Trust” means HF Financial

Capital Trust I, the Delaware business trust, or any other similar trust

created for the purpose of issuing Capital Securities in connection with the

issuance of Debt Securities under this Indenture, of which the Company is the

sponsor.

“Trust

Indenture Act” means the Trust Indenture Act of 1939, as amended.

“Trust Securities” means

Common Securities and Capital Securities of HF Financial Capital Trust I.

“Trustee” means the Person

identified as “Trustee” in the first paragraph hereof, and, subject to the

provisions of Article VI hereof, shall also include its successors and assigns

as Trustee hereunder.

“United

States” means the United States of America and the District of Columbia.

“U.S. Person” has the meaning given to United States

Person as set forth in Section 770l(a)(30) of the Internal Revenue Code of

1986, as amended.

ARTICLE II

DEBT

SECURITIES

SECTION 2.01  Authentication and Dating.

8

 

Upon the execution and

delivery of this Indenture, or from time to time thereafter, Debt Securities in

an aggregate principal amount not in excess of $10,310,000 may be executed and

delivered by the Company to the Trustee for authentication, and the Trustee

shall thereupon authenticate and make available for 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 or Chief Financial Officer

or one of its Vice Presidents without any further action by the Company

hereunder. In authenticating such Debt Securities, and accepting the additional

responsibilities under this Indenture in relation to such Debt Securities, the

Trustee shall be entitled to receive, and (subject to Section 6.01) shall be

fully protected in relying upon a copy of any Board Resolution or Board

Resolutions relating thereto and, if applicable, an appropriate record of any

action taken pursuant to such resolution, in each case certified by the

Secretary or an Assistant Secretary of the Company as the case may be.

 

The Trustee shall have the

right to decline to authenticate and deliver any Debt Securities under this

Section if the Trustee, being advised by counsel, determines that such action

may not lawfully be taken or if a Responsible Officer of the Trustee in good

faith shall determine that such action would expose the Trustee to personal

liability to existing holders.

The definitive Debt Securities

shall be typed, printed, lithographed or engraved on steel engraved borders or

may be produced in any other manner, all as determined by the officers

executing such Debt Securities, as evidenced by their execution of such Debt

Securities.

SECTION 2.02  Form of Trustee’s Certificate of

Authentication.

The Trustee’s certificate of authentication on all

Debt Securities shall be in substantially the following form:

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

Indenture.

Wilmington Trust Company, not in its individual capacity but solely as

trustee

	

  By

  	

   

  
	

  Authorized Officer

  

 

SECTION 2.03  Form and Denomination of Debt Securities.

The Debt Securities shall be substantially in the

form of Exhibit A hereto. The Debt Securities shall be in registered,

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 such plans as the officers executing the same may determine with the

approval of the Trustee as evidenced by the execution and authentication

thereof.

SECTION 2.04  Execution of Debt Securities.

The Debt Securities shall be

signed in the name and on behalf of the Company by the manual or facsimile

signature of its Chairman of the Board of Directors, Vice Chairman, President

or Chief Financial Officer or one of its Executive Vice Presidents, Senior Vice

Presidents or Vice Presidents under its corporate seal which may be affixed

thereto or printed, engraved or otherwise reproduced thereon, by facsimile or

otherwise, and which need not be attested. Only such Debt Securities as shall

bear thereon a certificate of authentication substantially in the form herein before

recited, executed by the Trustee or the Authenticating Agent by the manual

signature of an authorized officer, shall be entitled to the benefits of this

Indenture or be valid or obligatory for any purpose. Such certificate by the

Trustee or the Authenticating Agent upon any Debt Security executed by the

Company shall be conclusive evidence that the Debt Security so authenticated

has been duly authenticated and delivered hereunder and that the holder is

entitled to the benefits of this Indenture.

 

 

9

 

In case any officer of the Company who shall have

signed any of the Debt Securities shall cease to be such officer before the

Debt Securities so signed shall have been authenticated and delivered by the Trustee or

the Authenticating Agent, or disposed of by the Company, such Debt Securities

nevertheless may be authenticated and delivered or disposed of as though the

Person who signed such Debt Securities had not ceased to be such officer of the

Company; and any Debt Security may be signed on behalf of the Company by such

Persons as, at the actual date of the execution of such Debt Security, shall be

the proper officers of the Company, although at the date of the execution of

this Indenture any such person was not such an officer.

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

SECTION 2.05  Exchange and Registration of Transfer of

Debt Securities.

The Company shall cause to

be kept, at the office or agency maintained for the purpose of registration of

transfer and for exchange as provided in Section 3.02, a register (the “Debt

Security Register”) for the Debt Securities issued hereunder in which, subject

to such reasonable regulations as it may prescribe, the Company shall provide

for the registration and transfer of all Debt Securities as in this Article Two

provided. Such register shall be in written form or in any other form capable

of being converted into written form within a reasonable time.

Debt Securities to be

exchanged may be surrendered at the Principal Office of the Trustee or at any

office or agency to be maintained by the Company for such purpose as provided

in Section 3.02, and the Company shall execute, the Company or the Trustee

shall register and the Trustee or the Authenticating Agent shall authenticate

and make available for delivery in exchange therefor the Debt Security or Debt

Securities which the Securityholder making the exchange shall be entitled to

receive. Upon due presentment for registration of transfer of any Debt Security

at the Principal Office of the Trustee or at any office or agency of the

Company maintained for such purpose as provided in Section 3.02, the Company

shall execute, the Company or the Trustee shall register and the Trustee or the

Authenticating Agent shall authenticate and make available for delivery in the

name of the transferee or transferees a new Debt Security for a like aggregate

principal amount. Registration or registration of transfer of any Debt

Security by the Trustee or by any agent of the Company appointed pursuant to

Section 3.02, and delivery of such Debt Security, shall be deemed to complete

the registration or registration of transfer of such Debt Security.

 

 

10

 

All Debt Securities presented

for registration of transfer or for exchange or payment shall (if so required

by the Company or the Trustee or the Authenticating Agent) be duly endorsed by,

or be accompanied by a written instrument or instruments of transfer in form

satisfactory to the Company and either the Trustee or the Authenticating Agent

duly executed by, the holder or his attorney duly authorized in writing.

No service charge shall be

made for any exchange or registration of transfer of Debt Securities, but the

Company or the Trustee may require payment of a sum sufficient to cover any

tax, fee or other governmental charge that may be imposed in connection

therewith.

The Company or the Trustee

shall not be required to exchange or register a transfer of any Debt Security

for a period of 15 days next preceding the date of selection of Debt Securities

for redemption.

Notwithstanding the

foregoing, Debt Securities may not be transferred except in compliance with the

restricted securities legend set forth below, unless otherwise determined by

the Company in accordance with applicable law, which legend shall be placed on

each Debt Security:

THIS SECURITY HAS NOT BEEN

REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),

OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS. NEITHER

THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,

ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE

ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT

SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF

THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE

TRANSFER SUCH SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER

THE SECURITIES ACT (“RULE 144A”), TO A PERSON THE HOLDER REASONABLY BELIEVES IS

A “QUALIFIED INSTITUTIONAL BUYER’ AS DEFINED IN RULE 144A THAT PURCHASES FOR

ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM

NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C)

PURSUANT TO AN EXEMPTION FROM REGISTRATION TO AN “ACCREDITED INVESTOR’ WITHIN

THE MEANING OF SUBPARAGRAPH (a) (l), (2), (3) OR (7) OF RULE 501 UNDER THE

SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE

ACCOUNT OF AN “ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT WITH A

VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION

OF THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE

REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHT

PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C) OR (D) TO

REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER

INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A COPY OF

WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS SECURITY AGREES THAT

IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

 

 

11

 

THE HOLDER OF THIS SECURITY

BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN

EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT

SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS

AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS

AMENDED (THE “CODE”), (EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS

INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY AND NO

PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR

ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE

EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED

TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-l OR 84-14 OR ANOTHER

APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY IS NOT

PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO

SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY

INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING

THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING

OF SECTION 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 OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT

RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975

OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE

EXEMPTION.

IN CONNECTION WITH ANY

TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH

CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED BY THE INDENTURE TO

CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

THIS SECURITY WILL BE ISSUED

AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A PRINCIPAL AMOUNT OF NOT LESS

THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER

OF THIS SECURITY IN A BLOCK HAVING A PRINCIPAL AMOUNT OF LESS THAN $100,000

SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH

PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY FOR

ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON

THIS SECURITY, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO

INTEREST WHATSOEVER IN THIS SECURITY.

 

 

12

 

SECTION 2.06  Mutilated, Destroyed, Lost or Stolen Debt

Securities.

In case any Debt Security

shall become mutilated or be destroyed, lost or stolen, the Company shall

execute, and upon its written request the Trustee shall authenticate and

deliver, a new Debt Security bearing a number not contemporaneously

outstanding, in exchange and substitution for the mutilated Debt Security, or

in lieu of and in substitution for the Debt Security so destroyed, lost or

stolen. In every case the applicant for a substituted Debt Security shall

furnish to the Company and the Trustee such security or indemnity as may be

required by them to save each of them harmless, and, in every case of

destruction, loss or theft, the applicant shall also furnish to the Company and

the Trustee evidence to their satisfaction of the destruction, loss or theft of

such Debt Security and of the ownership thereof.

The Trustee may authenticate

any such substituted Debt Security and deliver the same upon the written

request or authorization of any officer of the Company. Upon the issuance of any

substituted Debt Security, the Company may require the payment of a sum

sufficient to cover any tax or other governmental charge that may be imposed in

relation thereto and any other expenses connected therewith. In case any Debt

Security which has matured or is about to mature or has been called for

redemption in full shall become mutilated or be destroyed, lost or stolen, the

Company may, instead of issuing a substitute Debt Security, pay or authorize

the payment of the same (without surrender thereof except in the case of a

mutilated Debt Security) if the applicant for such payment shall furnish to the

Company and the Trustee such security or indemnity as may be required by them

to save each of them harmless and, in case of destruction, loss or theft, evidence

satisfactory to the Company and to the Trustee of the destruction, loss or

theft of such Security and of the ownership thereof.

Every substituted Debt

Security issued pursuant to the provisions of this Section 2.06 by virtue of

the fact that any such Debt Security is destroyed, lost or stolen shall

constitute an additional contractual obligation of the Company, whether or not

the destroyed, lost or stolen Debt Security shall be found at any time, and

shall be entitled to all the benefits of this Indenture equally and

proportionately with any and all other Debt Securities duly issued hereunder.

All Debt Securities shall be held and owned upon the express condition that, to

the extent permitted by applicable law, the foregoing provisions are exclusive

with respect to the replacement or payment of mutilated, destroyed, lost or

stolen Debt Securities and shall preclude any and all other rights or remedies

notwithstanding any law or statute existing or hereafter enacted to the

contrary with respect to the replacement or payment of negotiable instruments

or other securities without their surrender.

SECTION 2.07  Temporary Debt Securities.

Pending the preparation of

definitive Debt Securities, the Company may execute and the Trustee shall

authenticate and make available for delivery temporary Debt Securities that are

typed, printed or lithographed. Temporary Debt Securities shall be issuable in

any authorized denomination, and substantially in the form of the definitive

Debt Securities but with such omissions, insertions and variations as may be

appropriate for temporary Debt Securities, all as may be determined by the

Company. Every such temporary Debt Security shall be executed by the Company

and be authenticated by the Trustee upon the same conditions and in

substantially the same manner, and with the same effect, as the definitive Debt

Securities. Without unreasonable delay the Company will execute and deliver to

the Trustee or the Authenticating Agent definitive Debt Securities and

thereupon any or all temporary Debt Securities may be surrendered in

exchange therefor, at the principal corporate trust office of the Trustee or at

any office or agency maintained by the Company for such purpose as provided in

Section 3.02, and the Trustee or the Authenticating Agent shall authenticate

and make available for delivery in exchange for such temporary Debt Securities a like aggregate

principal amount of such definitive Debt Securities. Such

exchange shall be made by the Company at its own expense and without any charge

therefor except that in case of any such exchange involving a registration of

transfer the Company may require payment of a sum sufficient to cover any tax,

fee or other governmental charge that may be imposed in relation thereto. Until

so exchanged, the temporary Debt Securities shall in all respects be entitled

to the same benefits under this Indenture as definitive Debt Securities

authenticated and delivered hereunder.

 

 

13

 

SECTION 2.08  Payment of Interest.

Each Debt Security will bear

interest at the then applicable Interest Rate from and including each Interest

Payment Date or, in the case of the first interest period, the original date of

issuance of such Debt Security to, but excluding, the next succeeding Interest

Payment Date or, in the case of the last interest period, the Redemption Date,

Special Redemption Date or Maturity Date, as applicable, on the principal

thereof, on any overdue principal and (to the extent that payment of such

interest is enforceable under applicable law) on Deferred Interest and on any

overdue installment of interest (including Defaulted Interest), payable

(subject to the provisions of Article XII) on each Interest Payment Date

commencing on June 8, 2002. Interest and any Deferred Interest on any Debt

Security that is payable, and is punctually paid or duly provided for, on any

Interest Payment Date shall be paid to the Person in whose name said Debt

Security (or one or more Predecessor Securities) is registered at the close of

business on the regular record date for such interest installment, except that

interest and any Deferred Interest payable on the Maturity Date shall be paid

to the Person to whom principal is paid. In the event that any Debt Security or

portion thereof is called for redemption and the redemption date is subsequent

to a regular record date with respect to any Interest Payment Date and prior to

such Interest Payment Date, interest on such Debt Security will be paid upon

presentation and surrender of such Debt Security.

Any interest on any Debt

Security, other than Deferred Interest, that is payable, but is not punctually

paid or duly provided for, on any Interest Payment Date (herein called

“Defaulted Interest”) shall forthwith cease to be payable to the registered

holder on the relevant regular record date by virtue of having been such

holder, and such Defaulted Interest shall be paid by the Company to the Persons

in whose names such Debt Securities (or their respective Predecessor

Securities) are registered at the close of business on a special record date

for the payment of such Defaulted Interest, which shall be fixed in the

following manner: the Company shall notify the Trustee in writing of the amount

of Defaulted Interest proposed to be paid on each such Debt Security and the

date of the proposed payment, and at the same time the Company shall deposit

with the Trustee an amount of money equal to the aggregate amount proposed to

be paid in respect of such Defaulted Interest or shall make arrangements satisfactory

to the Trustee for such deposit prior to the date of the proposed

payment, such money when deposited to be held in trust for the benefit

of the Persons entitled to such Defaulted Interest as in this clause provided.

Thereupon the Trustee shall fix a special record date for the payment of such

Defaulted Interest which shall not be more than fifteen nor less than ten days

prior to the date of the proposed payment and not less than ten days after the

receipt by the Trustee of the notice of the proposed payment. The Trustee shall

promptly notify the Company of such special record date and, in the name and at

the expense of the Company, shall cause notice of the proposed payment of such

Defaulted Interest and the special record date therefor to be mailed, first

class postage prepaid; to each Securityholder at his or her address as it

appears in the Debt Security Register, not less than ten days prior to such

special record date. Notice of the proposed payment of such Defaulted Interest

and the special record date therefor having been mailed as aforesaid, such

Defaulted Interest shall be paid to the Persons in whose names such Debt

Securities (or their respective Predecessor Securities) are registered on such

special record date and thereafter the Company shall have no further payment

obligation in respect of the Defaulted Interest.

 

14

 

Any interest scheduled to become payable on an

Interest Payment Date occurring during an Extension Period shall not be Defaulted

Interest and shall be payable on such other date as may be specified in the

terms of such Debt Securities.

The term “regular record

date” as used in this Section shall mean the fifteenth day prior to an Interest

Payment Date whether or not such date is a Business Day.

Subject to the foregoing provisions of this Section,

each Debt Security delivered under this Indenture upon registration of transfer

of or in exchange for or in lieu of any other Debt Security shall carry the

rights to interest accrued and unpaid, and to accrue, that were carried by such

other Debt Security.

SECTION 2.09  Cancellation of 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 or any paying agent, be

surrendered to the Trustee and promptly canceled by it, or, if surrendered to

the Trustee or any Authenticating Agent, shall be promptly canceled by it, and

no Debt Securities shall be issued in lieu thereof except as expressly

permitted by any of the provisions of this Indenture. All Debt Securities

canceled by any Authenticating Agent shall be delivered to the Trustee. The

Trustee shall destroy all canceled Debt Securities unless the Company otherwise

directs the Trustee in writing. If the Company shall acquire any of the Debt

Securities, however, such acquisition shall not operate as a redemption or

satisfaction of the indebtedness represented by such Debt Securities unless and

until the same are surrendered to the Trustee for cancellation.

SECTION 2.10  Computation of Interest.

(a)           The amount of interest

payable for any interest period will be computed on the basis of a 360-day year

and the actual number of days elapsed in the relevant interest period; provided,

however, that upon the occurrence of a Special Event Redemption pursuant

to Section 10.02 the amounts payable pursuant to this Indenture shall be

calculated as set forth in the definition of Special Redemption Price.

 

 

15

 

(b)           LIBOR shall be

determined by the Calculation Agent in accordance with the following

provisions:

(1)           On the second LIBOR Business

Day (provided, that on such day commercial banks are open for business

(including dealings in foreign currency deposits) in London (a “LIBOR Banking

Day”), and otherwise the next preceding LIBOR Business Day that is also a LIBOR

Banking Day) prior to December 15th and June 15th (except, with respect to the

first interest payment period, on November 26, 2001), (each such day, a “LIBOR

Determination Date”), LIBOR shall equal the rate, as obtained by the

Calculation Agent for six-month Eurodollar deposits in Europe which appears on

Telerate Page 3750 (as defined in the International Swaps and Derivatives Association,

Inc. 1991 Interest Rate and Currency Exchange Definitions) or such other page

as may replace such Page 3750, as of 1l:OO a.m. (London time) on such LIBOR

Determination Date, as reported by Bloomberg Financial Markets Commodities

News. “LIBOR Business Day” means any day that is not a Saturday, Sunday or

other day on which commercial banking institutions in New York, New York or

Wilmington, Delaware, are authorized or obligated by law or executive order to

be closed. If such rate is superseded on Telerate Page 3750 by a corrected rate

before 12:00 noon (London time) on the same LIBOR Determination Date, the

corrected rate as so substituted will be the applicable LIBOR for that LIBOR

Determination Date.

(2)           If, on any LIBOR

Determination Date, such rate does not appear on Telerate Page 3750 or such

other page as may replace such Page 3750, the Calculation Agent shall determine

the arithmetic mean of the offered quotations of the Reference Banks (as

defined below) to leading banks in the London interbank market for six-month

U.S. Dollar deposits in Europe (in an amount determined by the Calculation

Agent) by reference to requests for quotations as of approximately 1l:OO a.m.

(New York time) on the LIBOR Determination Date made by the Calculation Agent

to the Reference Banks. If, on any LIBOR Determination Date, at least two of

the Reference Banks provide such quotations, LIBOR shall equal the arithmetic

mean of such quotations. If, on any LIBOR Determination Date, only one or none

of the Reference Banks provide such quotations, LIBOR shall be deemed to be the

arithmetic mean of the offered quotations that at least two leading banks in

The City of New York (as selected by the Calculation Agent) are quoting on the

relevant LIBOR Determination Date for six-month U.S. Dollar deposits in Europe

at approximately 1l:OO a.m. (New York time) (in an amount determined by the

Calculation Agent). As used herein, “Reference Banks” means four major banks in

the London interbank market selected by the Calculation Agent.

(3)           If the Calculation Agent is

required but is unable to determine a rate in accordance with at least one of

the procedures provided above, LIBOR shall be LIBOR in effect on the previous

LIBOR Determination Date (whether or not LIBOR for such period was in fact

determined on such LIBOR Determination Date).

(c)           All percentages

resulting from any calculations on the Debt Securities will be rounded, if

necessary, to the nearest one hundred-thousandth of a percentage point, with

five one-millionths of a percentage point rounded upward (e.g., 9.876545% (or

 .09876545) being rounded to 9.87655% (or .0987655)),  and all dollar amounts used in or resulting from such calculation

will be rounded to the nearest cent (with one-half cent being rounded upward).

 

 

16

 

(d)           On each LIBOR

Determination Date, the Calculation Agent shall notify in writing the Company

and the Paying Agent of the applicable Interest Rate in effect for the related

Interest Payment. The Calculation Agent shall, upon the request of the holder

of any Debt Securities, provide the Interest Rate then in effect. All

calculations made by the Calculation Agent in the absence of manifest error

shall be conclusive for all purposes and binding on the Company and the Holders

of the Debt Securities. The Paying Agent shall be entitled to rely on

information received from the Calculation Agent or the Company as to the

Interest Rate. The Company shall, from time to time, provide any necessary

information to the Paying Agent relating to any original issue discount and

interest on the Debt Securities that is included in any payment and reportable

for taxable income calculation purposes.

SECTION 2.11  Extension of Interest Payment Period.

So long as no Event of

Default has occurred and is continuing, the Company shall have the right, from

time to time and without causing an Event of Default, to defer payments of

interest on the Debt Securities by extending the interest payment period on the

Debt Securities at any time and from time to time during the term of the Debt

Securities, for up to ten consecutive semi-annual periods (each such extended

interest payment period, an “Extension Period”), during which Extension Period

no interest shall be due and payable (except any Additional Interest that may

be due and payable). No Extension Period may end on a date other than an

Interest Payment Date. During any Extension Period, interest will continue to

accrue on the Debt Securities, and interest on such accrued interest (such

accrued interest and interest thereon referred to herein as “Deferred

Interest”) will accrue at the Interest Rate, compounded semiannually from the

date such Deferred Interest would have been payable were it not for the

Extension Period, both to the extent permitted by law. No interest or Deferred

Interest shall be due and payable during an Extension Period, except at the end

thereof. At the end of any such Extension Period the Company shall pay all

Deferred Interest then accrued and unpaid on the Debt Securities; provided,

however, that no Extension Period may extend beyond the Maturity Date;

and provided further, however, that during any such Extension Period, the

Company shall be subject to the restrictions set forth in Section 3.08 of this

Indenture. Prior to the termination of any Extension Period, the Company may

further extend such period, provided, that such period together with all such

previous and further consecutive extensions thereof shall not exceed ten

consecutive semi-annual periods, or extend beyond the Maturity Date. Upon the

termination of any Extension Period and upon the payment of all Deferred

Interest, the Company may commence a new Extension Period, subject to the

foregoing requirements. The Company must give the Trustee notice of its

election to begin such Extension Period at least one Business Day prior to the

earlier of (i) the next succeeding date on which interest on the Debt

Securities would have been payable except for the election to begin such Extension

Period or (ii) the date such interest is payable, but in any event not later

than the related regular record date. The Trustee shall give notice of the

Company’s election to begin a new Extension Period to the Securityholders.

 

 

17

 

SECTION 2.12  CUSIP Numbers.

The Company in issuing the Debt Securities may use

“CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use

“CUSIP” numbers in notices of redemption as a convenience to Securityholders; provided,

that any such notice may state that no representation is made as to the

correctness of such numbers either as printed on the Debt Securities or as

contained in any notice of a redemption and that reliance may be placed only on

the other identification numbers printed on the Debt Securities, and any such

redemption shall not be affected by any defect in or omission of such numbers.

The Company will promptly notify the Trustee in writing of any change in the

CUSIP numbers.

ARTICLE III

PARTICULAR

COVENANTS OF THE COMPANY

SECTION

3.0l  Payment of Principal,

Premium and Interest; Agreed Treatment of the Debt Securities.

(a)           The Company

covenants and agrees that it will duly and punctually pay or cause to be paid

the principal of and premium, if any, and interest on the Debt Securities at

the place, at the respective times and in the manner provided in this Indenture

and the Debt Securities. At the option of the Company, each installment of

interest on the Debt Securities may be paid (i) by mailing checks for such

interest payable to the order of the holders of Debt Securities entitled

thereto as they appear on the Debt Security Register or (ii) by wire transfer

to any account with a banking institution located in the United States

designated by such Person to the paying agent no later than the related record

date.

(b)           The Company

will treat the Debt Securities as indebtedness, and the amounts payable in

respect of the principal amount of such Debt Securities as interest, for all

U.S. federal income tax purposes. All payments in respect of such Debt

Securities will be made free and clear of U.S. withholding tax to any

beneficial owner thereof that has provided an Internal Revenue Service Form W8

BEN (or any substitute or successor form) establishing its non-US status for

U.S. federal income tax purposes.

(c)           As of the date of this

Indenture, the Company has no intention to exercise its right under Section

2.11 to defer payments of interest on the Debt Securities by commencing an

Extension Period.

(d)           As of the date of this

Indenture, the Company believes that the likelihood that it would exercise its

right under Section 2.11 to defer payments of interest on the Debt Securities

by commencing an Extension Period at any time during which the Debt Securities

are outstanding is remote because of the restrictions that would be imposed on

the Company’s ability to declare or pay dividends or distributions on, or to

redeem, purchase or make a liquidation payment with respect to, any of its

outstanding equity and on the Company’s ability to make any payments of

principal of or interest on, or repurchase or redeem, any of its debt

securities that rank pari passu in

all respects with (or junior in interest to) the Debt Securities.

 

 

18

 

SECTION 3.02  Offices for Notices and Payments, etc.

So long as any of the Debt

Securities remain outstanding, the Company will maintain in Wilmington,

Delaware or in Sioux Falls, South Dakota, an office or agency where the Debt

Securities may be presented for payment, an office or agency where the Debt

Securities may be presented for registration of transfer and for exchange as in

this Indenture provided and an office or agency where notices and demands to or

upon the Company in respect of the Debt Securities or of this Indenture may be

served. The Company will give to the Trustee written notice of the location of

any such office or agency and of any change of location thereof. Until

otherwise designated from time to time by the Company in a notice to the

Trustee, or specified as contemplated by Section 2.05, such office or agency

for all of the above purposes shall be the Principal Office of the Trustee. In

case the Company shall fail to maintain any such office or agency in

Wilmington, Delaware or in Sioux Falls, South Dakota, or shall fail to give

such notice of the location or of any change in the location thereof,

presentations and demands may be made and notices may be served at the

Principal Office of the Trustee.

In addition to any such

office or agency, the Company may from time to time designate one or more

offices or agencies outside Wilmington, Delaware or Sioux Falls, South Dakota,

where the Debt Securities may be presented for registration of transfer and for

exchange in the manner provided in this Indenture, and the Company may from

time to time rescind such designation, as the Company may deem desirable or

expedient; provided, however, that no such designation or

rescission shall in any manner relieve the Company of its obligation to

maintain any such office or agency in Wilmington, Delaware or in Sioux Falls,

South Dakota, for the purposes above mentioned. The Company will give to the

Trustee prompt written notice of any such designation or rescission thereof.

SECTION 3.03  Appointments to Fill Vacancies in Trustee’s

Office.

The Company, whenever

necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in

the manner provided in Section 6.09, a Trustee, so that there shall at all

times be a Trustee hereunder.

SECTION 3.04  Provision as to Paying Agent.

(a)           If the Company

shall appoint a paying agent other than the Trustee, it will cause such paying

agent to execute and deliver to the Trustee an instrument in which such agent

shall agree with the Trustee, subject to the provision of this Section 3.04,

(1)           that it will hold all sums

held by it as such agent for the payment of the principal of and premium, if

any, or interest, if any, on the Debt Securities (whether such sums have been

paid to it by the Company or by any other obligor on the Debt Securities) in

trust for the benefit of the holders of the Debt Securities;

(2)           that it 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 of the principal of

and premium, if any, or interest, if any, on the Debt Securities when the same

shall be due and payable; and

 

19

 

(3)           that it will, at any time

during the continuance of any Event of Default, upon the written request of the

Trustee, forthwith pay to the Trustee all sums so held in trust by such paying

agent.

(b)           If the Company

shall act as its own paying agent, it will, on or before each due date of the

principal of and premium, if any, or interest, if any, on the Debt Securities,

set aside, segregate and hold in trust for the benefit of the holders of the

Debt Securities a sum sufficient to pay such principal, premium or interest so

becoming due and will notify the Trustee in writing of any failure to take such

action and of any failure by the Company (or by any other obligor under the

Debt Securities) to make any payment of the principal of and premium, if any,

or interest, if any, on the Debt Securities when the same shall become due and

payable.

Whenever the Company shall

have one or more paying agents for the Debt Securities, it will, on or prior to

each due date of the principal of and premium, if any, or interest, if any, on

the Debt Securities, deposit with a paying agent a sum sufficient to pay the

principal, premium or interest so becoming due, such sum to be held in trust

for the benefit of the Persons entitled thereto and (unless such paying agent

is the Trustee) the Company shall promptly notify the Trustee in writing of its

action or failure to act.

(c)           Anything in

this Section 3.04 to the contrary notwithstanding, the Company may, at any

time, for the purpose of obtaining a satisfaction and discharge with respect to

the Debt Securities, or for any other reason, pay, or direct any paying agent

to pay to the Trustee all sums held in trust by the Company or any such paying

agent, such sums to be held by the Trustee upon the same terms and conditions

herein contained.

(d)           Anything in this Section

3.04 to the contrary notwithstanding, the agreement to hold sums in trust as

provided in this Section 3.04 is subject to Sections 12.03 and 12.04.

(e)           The Company hereby initially

appoints the Trustee to act as paying agent.

SECTION 3.05  Certificate to Trustee.

The Company will deliver to the Trustee on or before

120 days after the end 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 of their duties as officers of the Company they

would normally have knowledge of any default by the Company in the performance

of any covenants contained herein, stating whether or not they have knowledge

of any such default and, if so, specifying each such default of which the

signers have knowledge and the nature thereof.

SECTION 3.06  Additional Interest.

If and for so long as the

Trust is the holder of all Debt Securities and is required to pay any

additional taxes, duties, assessments or other governmental charges as a result

of a Tax Event, the Company will pay such additional amounts (the “Additional

Interest”) on the Debt Securities as shall be

required so that the net amounts received and retained by the Trust after

paying taxes, duties, assessments or other governmental charges will be equal

to the amounts the Trust would have received if no such taxes, duties,

assessments or other governmental charges had been imposed. Whenever in this

Indenture or the Debt Securities there is a reference in any context to the

payment of principal of or interest on the Debt Securities, such mention shall

be deemed to include mention of payments of the Additional Interest provided

for in this paragraph to the extent that, in such context, Additional Interest

is, was or would be payable in respect thereof pursuant to the provisions of

this paragraph and express mention of the payment of Additional Interest (if

applicable) in any provisions hereof shall not be construed as excluding

Additional Interest in those provisions hereof where such express mention is

not made, provided, however, that the deferral of the payment of

interest during an Extension Period pursuant to Section 2.11 shall not defer

the payment of any Additional Interest that may be due and payable.

 

20

 

SECTION 3.07  Compliance with Consolidation Provisions.

The Company will not, while any of the Debt

Securities remain outstanding, consolidate with, or merge into, or merge into

itself, or sell or convey all or substantially all of its property to any other

Person unless the provisions of Article XI hereof are complied with.

SECTION 3.08  Limitation on Dividends.

If Debt Securities are

initially issued to the Trust or a trustee of such Trust in connection with the

issuance of Trust Securities by the Trust (regardless of whether Debt

Securities continue to be held by such Trust) and (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 any obligations under the Capital Securities

Guarantee or (iii) the Company shall have given notice of its election to defer

payments of interest on the Debt Securities by extending the interest payment

period as provided herein and such period, or any extension thereof, shall have

commenced and be continuing, then the Company may not (A) declare or pay any

dividends or distributions on, or redeem, purchase, acquire, or make a

liquidation payment with respect to, any of the Company’s capital stock or (B)

make any payment of principal of or interest or premium, if any, 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 stock of

the Company (I) in connection with any employment contract, benefit plan or

other similar arrangement with or for the benefit of one or more employees,

officers, directors or consultants, (II) in connection with a dividend

reinvestment or stockholder stock purchase plan or (III) in connection with the

issuance of capital stock of the Company (or securities convertible into or

exercisable for such capital stock), as consideration in an acquisition

transaction entered into prior to the occurrence of (i), (ii) or (iii) above,

(b) as a result of any exchange 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 series of the Company’s capital stock or of any class or

series of the Company’s indebtedness for any class or series of the Company’s

capital stock, (c) the purchase of fractional interests in shares of the

Company’s capital stock pursuant to the conversion or exchange provisions of

such capital stock or the security being converted or exchanged, (d) any

declaration of a dividend in connection with any stockholder’s rights plan, or

the issuance of rights, stock or other property under any stockholder’s rights

plan, or the redemption or repurchase of rights pursuant thereto, or (e) any

dividend in the form of stock, warrants, options or other rights where the

dividend stock or the stock issuable upon exercise of such warrants, options or

other rights is the same stock as that on which the dividend is being paid or

ranks pari passu with or junior

to such stock).

 

 

21

 

SECTION 3.09  Covenants as to the Trust.

For so long as such Trust

Securities remain outstanding, the Company shall maintain 100% ownership of the

Common Securities; provided, however, that any permitted

successor of the Company under this Indenture that is a U.S. Person may succeed

to the Company’s ownership of such Common Securities. The Company, as owner of

the Common Securities, shall use commercially reasonable efforts to cause the

Trust (a) to remain a statutory business trust, except in connection with a

distribution of Debt Securities to the holders of Trust Securities in

liquidation of the Trust, the redemption of all of the Trust Securities or

certain mergers, consolidations or amalgamations, each as permitted by the

Declaration, (b) to otherwise continue to be classified as a grantor trust for

United States federal income tax purposes and (c) to cause each holder of Trust

Securities to be treated as owning an undivided beneficial interest in the Debt

Securities.

ARTICLE IV

LISTS AND REPORTS

BY

THE COMPANY AND THE TRUSTEE

SECTION 4.01  Securityholders’ Lists.

The Company covenants and

agrees that it will furnish or cause to be furnished to the Trustee:

(a)           on each regular

record date for an Interest Payment Date, a list, in such form as the Trustee

may reasonably require, of the names and addresses of the Securityholders of

the Debt Securities as of such record date; and

(b)           at such other

times as the Trustee may request in writing, within 30 days after the receipt

by the Company of any such request, a list of similar form and content as of a

date not more than 15 days prior to the time such list is furnished;

except that no such lists

need be furnished under this Section 4.01 so long as the Trustee is in

possession thereof by reason of its acting as Debt Security registrar.

SECTION 4.02  Preservation and Disclosure of Lists.

(a)           The Trustee

shall preserve, in as current a form as is reasonably practicable, all

information 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 4.01

or (2) received by it in the capacity of Debt Securities registrar (if so

acting) hereunder. The Trustee may destroy any list furnished to it as provided

in Section 4.01 upon receipt of a new list so furnished.

(b)           In case three

or more holders of Debt Securities (hereinafter referred to as “applicants”)

apply in writing to the Trustee and furnish to the Trustee reasonable proof

that each such applicant has owned a Debt Security for a period of at least six

months preceding the date of such application, and such application states that

the applicants desire to communicate with other holders of Debt Securities with

respect to their rights under this Indenture or under such Debt Securities and

is accompanied by a copy of the form of proxy or other communication which such

applicants propose to transmit, then the Trustee shall within five Business

Days after the receipt of such application, at its election, either:

 

 

22

 

(1)           afford such applicants

access to the information preserved at the time by the Trustee in accordance

with the provisions of subsection (a) of this Section 4.02, or

(2)           inform such applicants as to

the approximate number of holders of Debt Securities whose names and addresses

appear in the information preserved at the time by the Trustee in accordance

with the provisions of subsection (a) of this Section 4.02, and as to the

approximate cost of mailing to such Securityholders the form of proxy or other

communication, if any, specified in such application.

If the Trustee shall elect

not to afford such applicants access to such information, the Trustee shall,

upon the written request of such applicants, mail to each Securityholder of

Debt Securities whose name and address appear in the information preserved at

the time by the Trustee in accordance with the provisions of subsection (a) of

this Section 4.02 a copy of the form of proxy or other communication which is

specified in such request with reasonable promptness after a tender to the

Trustee of the material to be mailed and of payment, or provision for the

payment, of the reasonable expenses of mailing, unless within five days after

such tender, the Trustee shall mail to such applicants and file with the

Securities and Exchange Commission, if permitted or required by applicable law,

together with a copy of the material to be mailed, a written statement to the

effect that, in the opinion of the Trustee, such mailing would be contrary to

the best interests of the holders of all Debt Securities, as the case may be,

or would be in violation of applicable law. Such written statement shall

specify the basis of such opinion. If said Commission, as permitted or required

by applicable law, after opportunity for a hearing upon the objections

specified in the written statement so filed, shall enter an order refusing to

sustain any of such objections or if, after the entry of an order sustaining

one or more of such objections, said Commission shall find, after notice and

opportunity for hearing, that all the objections so sustained have been met and

shall enter an order so declaring, the Trustee shall mail copies of such

material to all such Securityholders with reasonable promptness after the entry

of such order and the renewal of such tender; otherwise the Trustee shall be

relieved of any obligation or duty to such applicants respecting their

application.

(c)           Each and every

holder of Debt Securities, by receiving and holding the same, agrees with the

Company and the Trustee that neither the Company nor the Trustee nor any paying

agent shall be held accountable by reason of the disclosure of any such

information as to the names and addresses of the holders of Debt Securities in

accordance with the provisions of subsection (b) of this Section 4.02,

regardless of the source from which such information was derived, and that the

Trustee shall not be held accountable by reason of mailing any material

pursuant to a request made under said subsection (b).

 

 

23

 

ARTICLE V

REMEDIES OF THE TRUSTEE AND

SECURITYHOLDERS

UPON

AN EVENT OF DEFAULT

SECTION 5.01  Events of Default.

The

following events shall be “Events of Default” with respect to Debt Securities:

(a)           the Company

defaults in the payment of any interest upon any Debt Security when it becomes

due and payable, and continuance of such default for a period of 30 days; for

the avoidance of doubt, an extension of any interest payment period by the

Company in accordance with Section 2.11 of this Indenture shall not constitute

a default under this clause 5.01(a); or

(b)           the Company

defaults in the payment of all or any part of the principal of (or premium, if

any, on) any Debt Securities as and when the same shall become due and payable

either at maturity, upon redemption, by declaration of acceleration or

otherwise; or

(c)           the Company

defaults in the performance of, or breaches, any of its covenants or agreements

in Sections 3.06, 3.07, 3.08 and 3.09 of this Indenture (other than a covenant

or agreement a default in whose performance or whose breach is elsewhere in

this Section specifically dealt with), and continuance of such default or

breach for a period of 90 days after there has been given, by registered or

certified mail, to the Company by the Trustee or to the Company and the Trustee

by the holders of not less than 25% in aggregate principal amount of the

outstanding Debt Securities, a written notice specifying such default or breach

and requiring it to be remedied and stating that such notice is a “Notice of

Default” hereunder; or

(d)           a court having

jurisdiction in the premises shall enter a decree or order for relief in

respect of the Company in an involuntary case under any applicable bankruptcy,

insolvency or other similar law now or hereafter in effect, or appoints a

receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar

official) of the Company or for any substantial part of its property, or orders

the winding-up or liquidation of its affairs and such decree or order shall

remain unstayed and in effect for a period of 90 consecutive days; or

(e)           the Company

shall commence a voluntary case under any applicable bankruptcy, insolvency or

other similar law now or hereafter in effect, shall consent to the entry of an

order for relief in an involuntary case under any such law, or shall consent to

the appointment of or taking possession by a receiver, liquidator, assignee,

trustee, custodian, sequestrator (or other similar official) of the Company or

of any substantial part of its property, or shall make any general assignment

for the benefit of creditors, or shall fail generally to pay its debts as they

become due; or

(f)            the Trust shall have

voluntarily or involuntarily liquidated, dissolved, wound-up its business or

otherwise terminated its existence except in connection with (1) the

distribution of the Debt Securities to holders of such Trust Securities in

liquidation of their interests in the Trust, (2) the redemption of all of the

outstanding Trust Securities or (3) certain mergers, consolidations or

amalgamations, each as permitted by the Declaration.

 

 

24

 

If an Event of Default occurs

and is continuing with respect to the Debt Securities, then, and in each and

every such case, unless the principal of the Debt Securities shall have already

become due and payable, either the Trustee or the holders of not less than 25%

in aggregate principal amount of the Debt Securities then outstanding

hereunder, by notice in writing to the Company (and to the Trustee if given by

Securityholders), may declare the entire principal of the Debt Securities and

the interest accrued thereon, if any, to be due and payable immediately, and

upon any such declaration the same shall become immediately due and payable.

The foregoing provisions,

however, are subject to the condition that if, at any time after the principal

of the Debt Securities shall have been so declared due and payable, and before

any judgment or decree for the payment of the moneys due shall have been

obtained or entered as hereinafter provided, (i) the Company shall pay or shall

deposit with the Trustee a sum sufficient to pay all matured installments of

interest upon all the Debt Securities and the principal of and premium, if any,

on the Debt Securities which shall have become due otherwise than by

acceleration (with interest upon such principal and premium, if any, and

Deferred Interest, to the extent permitted by law) and such amount as shall be

sufficient to cover reasonable compensation to the Trustee and each predecessor

Trustee, their respective agents, attorneys and counsel, and all other amounts

due to the Trustee pursuant to Section 6.06, if any, and (ii) all Events of

Default under this Indenture, other than the non-payment of the principal of or

premium, if any, on Debt Securities which shall have become due by

acceleration, shall have been cured, waived or otherwise remedied as provided

herein — then and in every such case the holders of a majority in aggregate

principal amount of the Debt Securities then outstanding, by written notice to

the Company and to the Trustee, may waive all defaults and rescind and annul

such declaration and its consequences, but no such waiver or rescission and

annulment shall extend to or shall affect any subsequent default or shall

impair any right consequent thereon.

In case the Trustee shall

have proceeded to enforce any right under this Indenture and such proceedings

shall have been discontinued or abandoned because of such rescission or

annulment or for any other reason or shall have been determined adversely to

the Trustee, then and in every such case the Company, the Trustee and the

holders of the Debt Securities shall be restored respectively to their several

positions and rights hereunder, and all rights, remedies and powers of the

Company, the Trustee and the holders of the Debt Securities shall continue as

though no such proceeding had been taken.

SECTION 5.02  Payment of Debt Securities on Default;

Suit Therefor.

The Company covenants that

upon the occurrence of an Event of Default pursuant to clause 5.01(a) or

5.01(b) and upon demand of the Trustee, the Company will pay to the Trustee,

for the benefit of the holders of the Debt Securities, the whole amount that

then shall have become due and payable on all Debt Securities for principal and

premium, if any, or interest, or both, as the case may be, including Deferred

Interest accrued on the Debt Securities; and, in addition thereto, such further

amount as shall be sufficient to cover the costs and expenses of collection,

including a reasonable compensation to the Trustee, its agents, attorneys and

counsel, and any other amounts due to the Trustee under Section 6.06. In case

the Company shall fail forthwith to pay such amounts upon such demand, the

Trustee, in its own name and as trustee of an express trust, shall be entitled

and empowered to institute any actions or proceedings at law or in equity for

the collection of the sums so due and unpaid, and may prosecute any such action

or proceeding to judgment or final decree, and may enforce any such judgment or

final decree against the Company or any other obligor on such Debt Securities

and collect in the manner provided by law out of the property of the Company or

any other obligor on such Debt Securities wherever situated the moneys adjudged

or decreed to be payable.

 

 

25

 

In case there shall be pending proceedings for the

bankruptcy or for the reorganization of the Company or any other obligor on the

Debt Securities under Bankruptcy Law, or in case a receiver or trustee shall

have been appointed for the property of the Company or such other obligor, or

in the case of any other similar judicial proceedings relative to the Company

or other obligor upon the Debt Securities, or to the creditors or property of

the Company or such other obligor, the Trustee, irrespective of whether the

principal of the Debt Securities shall then be due and payable as therein

expressed or by declaration of acceleration or otherwise and irrespective of

whether the Trustee shall have made any demand pursuant to the provisions of

this Section 5.02, shall be entitled and empowered, by intervention in such

proceedings or otherwise, to file and prove a claim or claims for the whole

amount of principal and interest owing and unpaid in respect of the Debt

Securities and, in case of any judicial proceedings, to file such proofs of

claim and other papers or documents as may be necessary or advisable in order

to have the claims of the Trustee (including any claim for reasonable

compensation to the Trustee and each predecessor Trustee, and their respective

agents, attorneys and counsel, and for reimbursement of all other amounts due

to the Trustee under Section 6.(06) and of the Securityholders allowed in such

judicial proceedings relative to the Company or any other obligor on the Debt

Securities, or to the creditors or property of the Company or such other

obligor, unless prohibited by applicable law and regulations, to vote on behalf

of the holders of the Debt Securities in any election of a trustee or a standby

trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency

proceedings or Person performing similar functions in comparable proceedings,

and to collect and receive any moneys or other property payable or deliverable

on any such claims, and to distribute the same after the deduction of its

charges and expenses; and any receiver, assignee or trustee in bankruptcy or

reorganization is hereby authorized 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 payments directly to the Securityholders, to pay to the

Trustee such amounts as shall be sufficient to cover reasonable compensation to

the Trustee, each predecessor Trustee and their respective agents, attorneys

and counsel, and all other amounts due to the Trustee under Section 6.06.

Nothing herein contained shall be construed to

authorize the Trustee to authorize or consent to or accept or adopt on behalf

of any Securityholder any plan of reorganization, arrangement, adjustment or

composition affecting the Debt Securities or the rights of any holder thereof

or to authorize the Trustee to vote in respect of the claim of any

Securityholder in any such proceeding.

All rights of action and of

asserting claims under this Indenture, or under any of the Debt Securities, may

be enforced by the Trustee without the possession of any of the Debt

Securities, or the production thereof at any trial or other proceeding relative

thereto, and any such suit or proceeding instituted by the Trustee shall be

brought in its own name as trustee of an express trust, and any recovery of

judgment shall be for the ratable benefit of the holders of the Debt

Securities.

 

 

26

 

In any proceedings brought by the Trustee (and also

any proceedings involving the interpretation of any provision of this Indenture

to which the Trustee shall be a party) the Trustee shall be held to represent

all the holders of the Debt Securities, and it shall not be necessary to make

any holders of the Debt Securities parties to any such proceedings.

SECTION 5.03  Application of Moneys Collected by

Trustee.

Any moneys collected by the

Trustee shall be applied in the following order, at the date or dates fixed by

the Trustee for the distribution of such moneys, upon presentation of the several

Debt Securities in respect of which moneys have been collected, and stamping

thereon the payment, if only partially paid, and upon surrender thereof if

fully paid:

First: To the payment of costs and expenses incurred

by, and reasonable fees of, the Trustee, its agents, attorneys and counsel, and

of all other amounts due to the Trustee under Section 6.06;

Second: To the payment of all Senior Indebtedness of

the Company if and to the extent required by Article XV;

Third: To the payment of the

amounts then due and unpaid upon Debt Securities for principal (and premium, if

any), and interest on the Debt Securities, in respect of which or for the

benefit of which money has been collected, ratably, without preference or

priority of any kind, according to the amounts due on such Debt Securities for

principal (and premium, if any) and interest, respectively; and

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

SECTION 5.04  Proceedings by Securityholders.

No holder of any Debt

Security shall have any right to institute any suit, action or proceeding for

any remedy hereunder, unless such holder previously shall have given to the

Trustee written notice of an Event of Default with respect to the Debt

Securities and unless the holders of not less than 25% in aggregate principal

amount of the Debt Securities then outstanding shall have given the Trustee a

written request to institute such action, suit or proceeding and shall have

offered to the Trustee such reasonable indemnity as it may require against the

costs, expenses and liabilities to be incurred thereby, and the Trustee for 60

days after its receipt of such notice, request and offer of indemnity shall

have failed to institute any such action, suit or proceeding; provided,

that no holder of Debt Securities shall have any right to prejudice the rights

of any other holder of Debt Securities, obtain priority or preference over any

other such holder or enforce any right under this Indenture except in the

manner herein provided and for the equal, ratable and common benefit of all

holders of Debt Securities.

Notwithstanding any other

provisions in this Indenture, however, the right of any holder of any Debt

Security to receive payment of the principal of, premium, if any, and interest

on such Debt Security when due, or to institute suit for the enforcement of any

such payment, shall not be impaired or affected without the consent of such

holder. For the protection and enforcement of the provisions of this Section,

each and every Securityholder and the Trustee shall be entitled to such relief

as can be given either at law or in equity.

 

 

27

 

SECTION 5.05   Proceedings by Trustee.

In case of an Event of

Default hereunder the Trustee may in its discretion proceed to protect and enforce

the rights vested in it by this Indenture by such appropriate judicial

proceedings as the Trustee shall deem most effectual to protect and enforce any

of such rights, either by suit in equity or by action at law or by proceeding

in bankruptcy or otherwise, whether for the specific enforcement of any

covenant or agreement contained in this Indenture or in aid of the exercise of

any power granted in this Indenture, or to enforce any other legal or equitable

right vested in the Trustee by this Indenture or by law.

SECTION 5.06  Remedies Cumulative and Continuing.

Except as otherwise provided

in Section 2.06, all powers and remedies given by this Article V to the Trustee

or to the Securityholders shall, to the extent permitted by law, be deemed

cumulative and not exclusive of any other powers and remedies available to the

Trustee or the holders of the Debt Securities, by judicial proceedings or

otherwise, to enforce the performance or observance of the covenants and

agreements contained in this Indenture or otherwise established with respect to

the Debt Securities, and no delay or omission of the Trustee or of any holder

of any of the Debt Securities to exercise any right or power accruing upon any

Event of Default occurring and continuing as aforesaid shall impair any such

right or power, or shall be construed 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 this Article V or by law to the Trustee or to the

Securityholders may be exercised from time to time, and as often as shall be

deemed expedient, by the Trustee or by the Securityholders.

SECTION

5.07  Direction of Proceedings

and Waiver of Defaults by Majority of Securityholders.

The holders of a majority in

aggregate principal amount of the Debt Securities affected (voting as one

class) at the time outstanding shall have the right to direct the time, method,

and place of conducting any proceeding for any remedy available to the Trustee,

or exercising any trust or power conferred on the Trustee with respect to such

Debt Securities; provided, however, that (subject to the

provisions of Section 6.01) the Trustee shall have the right to decline to

follow any such direction if the Trustee shall determine that the action so

directed would be unjustly prejudicial to the holders not taking part in such

direction or if the Trustee being advised by counsel determines that the action

or proceeding so directed may not lawfully be taken or if a Responsible Officer

of the Trustee shall determine that the action or proceedings so directed would

involve the Trustee in personal liability. Prior to any declaration

accelerating the maturity of the Debt Securities, the holders of a majority in

aggregate principal amount of the Debt Securities at the time outstanding may

on behalf of the holders of all of the Debt Securities waive (or modify any

previously granted waiver of) any past default or Event of Default and its

consequences, except a default (a) in the payment of principal of, premium, if

any, or interest on any of the Debt Securities, (b) in respect of covenants or

provisions hereof which cannot be modified or amended without the consent of

the 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 trustee of such trust, such waiver or

modification to such waiver shall not be effective until the holders of a

majority in liquidation preference of Trust Securities of the Trust shall have

consented to such waiver or modification to such waiver; provided, further,

that if the consent of the holder of each outstanding Debt Security is

required, such waiver shall not be effective until each holder of the Trust

Securities of the Trust shall have consented to such waiver. Upon any such

waiver, the default covered thereby shall be deemed to be cured for all

purposes of this Indenture and the Company, the Trustee and the holders of the

Debt Securities shall be restored to their former positions and rights

hereunder, respectively; but no such waiver shall extend to any subsequent or

other default or Event of Default or impair any right consequent thereon.

Whenever any default or Event of Default hereunder shall have been waived as

permitted by this Section 5.07, said default or Event of Default shall for all

purposes of the Debt Securities and this Indenture be deemed to have been cured

and to be not continuing.

28

 

SECTION 5.08  Notice of Defaults.

The Trustee shall, within 90

days after a Responsible Officer of the Trustee shall have actual knowledge or

received written notice of the occurrence of a default with respect to the Debt

Securities, mail to all Securityholders, as the names and addresses of such

holders appear upon the Debt Security Register, notice of all defaults with

respect to the Debt Securities known to the Trustee, unless such defaults shall

have been cured before the giving of such notice (the term “defaults” for the

purpose of this Section 5.08 being hereby defined to be the events specified in

subsections (a), (b), (c), (d) and (e) of Section 5.01, not including periods

of grace, if any, provided for therein); provided, that, except in the

case of default in the payment of the principal of, premium, if any, or

interest on any of the Debt Securities, the Trustee shall be protected in

withholding such notice if and so long as a Responsible Officer of the Trustee

in good faith determines that the withholding of such notice is in the

interests of the Securityholders.

SECTION 5.09  Undertaking to Pay Costs.

All parties to this

Indenture agree, and each holder of any Debt Security by his acceptance thereof

shall be deemed to have agreed, that any court may in its discretion require,

in any suit for the enforcement of any right or remedy under this Indenture, or

in any suit against the Trustee for any action taken or omitted by it as

Trustee, the filing by any party litigant in such suit of an undertaking to pay

the costs of such suit, and that such court may in its discretion assess

reasonable costs, including reasonable attorneys’ fees and expenses, against

any party litigant in such suit, having due regard to the merits and good faith

of the claims or defenses made by such party litigant; but the provisions of

this Section 5.09 shall not apply to any suit instituted by the Trustee, to any

suit instituted by any Securityholder, or group of Securityholders, holding in

the aggregate more than 10% in principal amount of the Debt Securities

outstanding, or to any suit instituted by any Securityholder for the

enforcement of the payment of the principal of (or premium, if any) or interest

on any Debt Security against the Company on or after the same shall have become

due and payable.

 

 

29

 

ARTICLE VI

CONCERNING

THE TRUSTEE

SECTION 6.01  Duties and Responsibilities of Trustee.

With respect to the holders

of Debt Securities issued hereunder, the Trustee, prior to the occurrence of an

Event of Default with respect to the Debt Securities and after the curing or

waiving of all Events of Default which may have occurred, with respect to the

Debt Securities, undertakes to perform such duties and only such duties as are

specifically set forth in this Indenture. In case an Event of Default with

respect to the Debt Securities has occurred (which has not been cured or

waived) the Trustee shall exercise such of the rights and powers vested in it

by this Indenture, and use the same degree of care and skill in their exercise,

as a prudent man would exercise or use under the circumstances in the conduct

of his own affairs.

No provision of this

Indenture shall be construed to relieve the Trustee from liability for its own

negligent action, its own negligent failure to act or its own willful

misconduct, except that:

(a)           prior to the occurrence of an Event of Default with

respect to Debt Securities and after the curing or waiving of all Events of

Default which may have occurred

(1)           the duties and obligations

of the Trustee with respect to Debt Securities shall be determined solely by

the express provisions of this Indenture, and the Trustee shall not be liable

except for the performance of such duties and obligations with respect to the

Debt Securities as are specifically set forth in this Indenture, and no implied

covenants or obligations shall be read into this Indenture against the Trustee,

and

(2)           in the absence of bad faith

on the part of the Trustee, the Trustee may conclusively rely, as to the truth

of the statements and the correctness of the opinions expressed therein, upon

any certificates or opinions furnished to the Trustee and conforming to the

requirements of this Indenture; but, in the case of any such certificates or

opinions which by any provision hereof are specifically required to be

furnished to the Trustee, the Trustee shall be under a duty to examine the same

to determine whether or not they conform on their face to the requirements of

this Indenture;

(b)           the Trustee

shall not be liable for any error of judgment made in good faith by a

Responsible Officer or Officers of the Trustee, unless it shall be proved that

the Trustee was negligent in ascertaining the pertinent facts;

(c)           the Trustee

shall not be liable with respect to any action taken or omitted to be taken by

it in good faith, in accordance with the direction of the Securityholders

pursuant to Section 5.07, relating to the time, method and place of conducting

any proceeding for any remedy available to the Trustee, or exercising any trust

or power conferred upon the Trustee, under this Indenture; and

(d)           the Trustee shall not be charged with knowledge of any

Default or Event of Default with respect to the Debt Securities unless either

(1) a Responsible Officer shall have actual knowledge of such Default or Event

of Default or (2) written notice of such Default or Event of Default shall have

been given to the Trustee by the Company or any other obligor on the Debt

Securities or by any holder of the Debt Securities, except with respect to an

Event of Default pursuant to Sections 5.01 (a) or 5.01 (b) hereof (other than

an Event of Default resulting from the default in the payment of Additional

Interest or premium, if any, if the Trustee does not have actual knowledge or

written notice that such payment is due and payable), of which the Trustee

shall be deemed to have knowledge.

 

 

30

 

None of the provisions

contained in this Indenture shall require the Trustee to expend or risk its own

funds or otherwise incur personal financial liability in the performance of any

of its duties or in the exercise of any of its rights or powers.

SECTION 6.02  Reliance on Documents, Opinions, etc.

Except as otherwise provided in Section 6.01:

(a)           the Trustee may

conclusively rely and shall be fully protected in acting or refraining from

acting upon any resolution, certificate, statement, instrument, opinion,

report, notice, request, consent, order, bond, note, debenture or other paper

or document believed by it in good faith to be genuine and to have been signed

or presented by the proper party or parties;

(b)           any request,

direction, order or demand of the Company mentioned herein shall be

sufficiently evidenced by an Officers’ Certificate (unless other evidence in

respect thereof be herein specifically prescribed); and any Board Resolution

may be evidenced to the Trustee by a copy thereof certified by the Secretary or

an Assistant Secretary of the Company;

(c)           the Trustee may consult with

counsel of its selection and any advice or Opinion of Counsel shall be full and

complete authorization and protection in respect of any action taken, suffered

or omitted by it hereunder in good faith and in accordance with such advice or

Opinion of Counsel;

(d)           the Trustee shall

be under no obligation to exercise any of the rights or powers vested in it by

this Indenture at the request, order or direction of any of the

Securityholders, pursuant to the provisions of this Indenture, unless such

Securityholders shall have offered to the Trustee reasonable security or

indemnity against the costs, expenses and liabilities which may be incurred

therein or thereby;

(e)           the Trustee shall not be

liable for any action taken or omitted by it in good faith and believed by it

to be authorized or within the discretion or rights or powers conferred upon it

by this Indenture; nothing contained herein shall, however, relieve the Trustee

of the obligation, upon the occurrence of an Event of Default with respect to

the Debt Securities (that has not been cured or waived) to exercise with

respect to Debt Securities such of the rights and powers vested in it by this

Indenture, and to use the same degree of care and skill in their exercise, as a

prudent man would exercise or use under the circumstances in the conduct of his

own affairs;

(f)            the Trustee

shall not be bound to make any investigation into the facts or matters stated

in any resolution, certificate, statement, instrument, opinion, report, notice,

request, consent, order, approval, bond, debenture, coupon or other paper or

document, unless requested in writing to do so by the holders of not less than

a majority in principal amount of the outstanding Debt Securities affected

thereby; provided, however, that if the payment within a

reasonable time to the Trustee of the costs, expenses or liabilities likely to

be incurred by it in the making of such investigation is, in the opinion of the

Trustee, not reasonably assured to the Trustee by the security afforded to it

by the terms of this Indenture, the Trustee may require reasonable indemnity

against such expense or liability as a condition to so proceeding; and

 

 

31

 

(g)           the Trustee may

execute any of the trusts or powers hereunder or perform any duties hereunder

either directly or by or through agents (including any Authenticating Agent) or

attorneys, and the Trustee shall not be responsible for any misconduct or

negligence on the part of any such agent or attorney appointed by it with due

care.

SECTION 6.03  No Responsibility for Recitals, etc.

The recitals contained

herein and in the Debt Securities (except in the certificate of authentication

of the Trustee or the Authenticating Agent) shall be taken as the statements of

the Company and the Trustee and the Authenticating Agent assume no

responsibility for the correctness of the same. The Trustee and the

Authenticating Agent make no representations as to the validity or sufficiency

of this Indenture or of the Debt Securities. The Trustee and the Authenticating

Agent shall not be accountable for the use or application by the Company of any

Debt Securities or the proceeds of any Debt Securities authenticated and

delivered by the Trustee or the Authenticating Agent in conformity with the

provisions of this Indenture.

SECTION 6.04  Trustee,

Authenticating Agent, Paying Agents, Transfer Agents or Registrar May Own Debt

Securities.

The Trustee or any

Authenticating Agent or any paying agent or any transfer agent 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 it would have if it

were not Trustee, Authenticating Agent, paying agent, transfer agent or Debt

Security registrar.

SECTION 6.05  Moneys to be Held in Trust.

Subject to the provisions of

Section 12.04, all moneys received by the Trustee or any paying agent shall,

until used or applied as herein provided, be held in trust for the purpose for

which they were received, but need not be segregated from other funds except to

the extent required by law. The Trustee and any paying agent shall be under no

liability for interest on any money received by it hereunder except as

otherwise agreed in writing with the Company. So long as no Event of Default

shall have occurred and be continuing, all interest allowed on any such moneys,

if any, shall be paid from time to time to the Company upon the written order

of the Company, signed by the Chairman of the Board of Directors, the

President, the Chief Operating Officer, a Vice President, the Treasurer or an

Assistant Treasurer of the Company.

SECTION 6.06  Compensation and Expenses of Trustee.

 

32

 

The Company covenants and

agrees to pay to the Trustee from time to time, and the Trustee shall be

entitled to, such compensation as shall be agreed to in writing between the

Company and the Trustee (which shall not be limited by any provision of law in

regard to the compensation of a trustee of an express trust), and the Company

will pay or reimburse the Trustee upon its written request for all documented

reasonable expenses, disbursements and advances incurred or made by the Trustee

in accordance with any of the provisions of this Indenture (including the

reasonable compensation and the reasonable expenses and disbursements of its

counsel and of all Persons not regularly in its employ) except any such

expense, disbursement or advance that arises from its negligence or bad faith.

The Company also covenants to indemnify each of the Trustee (including in its

individual capacity) and any predecessor Trustee (and its officers, agents,

directors and employees) for, and to hold it harmless against, any and all

loss, damage, claim, liability or expense including taxes (other than taxes

based on the income of the Trustee), except to the extent such loss, damage,

claim, liability or expense results from the negligence or bad faith of such

indemnitee, arising out of or in connection with the acceptance or

administration of this trust, including the costs and expenses of defending

itself against any claim or liability in the premises. The obligations of the

Company under this Section 6.06 to compensate and indemnify the Trustee and to

pay or reimburse the Trustee for documented expenses, disbursements and

advances shall constitute additional indebtedness hereunder. Such additional

indebtedness shall be secured by a lien prior to that of the Debt Securities

upon all property and funds held or collected by the Trustee as such, except

funds held in trust for the benefit of the holders of particular Debt

Securities.

 

Without prejudice to any

other rights available to the Trustee under applicable law, when the Trustee

incurs expenses or renders services in connection with an Event of Default

specified in subsections (d), (e) or (f) of Section 5.01, the expenses

(including the reasonable charges and expenses of its counsel) and the

compensation for the services are intended to constitute expenses of

administration under any applicable federal or state bankruptcy, insolvency or

other similar law.

The provisions of this

Section shall survive the resignation or removal of 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 the administration of the provisions of

this Indenture the Trustee shall deem it necessary or desirable that a matter

be proved or established prior to taking or omitting any action hereunder, such

matter (unless other evidence in respect thereof be herein specifically

prescribed) may, in the absence of negligence or bad faith on the part of the

Trustee, be deemed to be conclusively proved and established by an Officers

Certificate delivered to the Trustee, and such certificate, in the absence of

negligence or bad faith on the part of the Trustee, shall be full warrant to

the Trustee for any action taken or omitted by it under the provisions of this

Indenture upon the faith thereof.

SECTION 6.08  Eligibility of Trustee.

The Trustee hereunder shall

at all times be a U.S. Person that is a banking corporation organized and doing

business under the laws of the United States of America or any state thereof or

of the District of Columbia and authorized under such laws to exercise

corporate trust powers, 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. If such corporation

publishes reports of condition at least annually, pursuant to law or to the

requirements of the aforesaid supervising or examining authority, then for the

purposes of this Section 6.08 the combined capital and surplus of such

corporation shall be deemed to be its combined capital and surplus as set forth

in its most recent records of condition so published.

 

 

33

 

The Company may not, nor may

any Person directly or indirectly controlling, controlled by, or under common

control with the Company, serve as Trustee, notwithstanding that such

corporation shall be otherwise eligible and qualified under this Article.

In case at any time the

Trustee shall cease to be eligible in accordance with the provisions of this

Section 6.08, the Trustee shall resign immediately in the manner and with the

effect specified in Section 6.09.

If the Trustee has or shall

acquire any “conflicting interest” within the meaning of § 310(b) of the Trust

Indenture Act, the Trustee shall either eliminate such interest or resign, to

the extent and in the manner provided by, and subject to this Indenture.

SECTION 6.09  Resignation or Removal of Trustee.

(a)           The Trustee, or

any trustee or trustees hereafter appointed, may at any time resign by giving

written notice of such resignation to the Company and by mailing notice

thereof, at the Company’s expense, to the holders of the Debt Securities at

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 written instrument, in duplicate, executed by

order of its Board of Directors, one copy of which instrument shall be

delivered to the resigning Trustee and one copy to the successor Trustee. If no

successor Trustee shall have been so appointed and have accepted appointment

within 30 days after the mailing of such notice of resignation to the affected

Securityholders, the resigning Trustee may petition any court of competent

jurisdiction for the appointment of a successor Trustee, or any Securityholder

who has been a bona fide 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 and all others similarly situated, petition any such court for the

appointment of a successor Trustee. Such court may thereupon, after such

notice, if any, as it may deem proper and prescribe, appoint a successor

Trustee.

(b)           In case at any

time any of the following shall occur —

(1)           the Trustee

shall fail to comply with the provisions of the last paragraph of Section 6.08

after written request therefor by the Company or by any Securityholder who has

been a bona fide holder of a Debt Security or Debt Securities for at least six

months,

 

 

34

 

(2)           the Trustee shall cease to

be eligible in accordance with the provisions of Section 6.08 and shall fail to

resign after written request therefor by the Company or by any such

Securityholder, or

(3)           the Trustee shall become

incapable of acting, or shall be adjudged a bankrupt or insolvent, 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 its property or

affairs for the purpose of rehabilitation, conservation or liquidation,

then, in any such case, the

Company may remove the Trustee and appoint a successor Trustee by written

instrument, in duplicate, executed by order of the Board of Directors, one copy

of which instrument shall be delivered to the Trustee so removed and one copy

to the successor Trustee, or, subject to the provisions of Section 5.09, if no

successor Trustee shall have been so appointed and have accepted appointment

within 30 days of the occurrence of any of (l),(2) or (3) above, any

Securityholder who has been a bona fide holder of a Debt Security or Debt

Securities for at least six months may, on behalf of himself and all others

similarly situated, petition any court of competent jurisdiction for the removal

of the Trustee and the appointment of a successor Trustee. Such court may

thereupon, after such notice, if any, as it may deem proper and prescribe,

remove the Trustee and appoint a successor Trustee.

(c)           Upon prior

written notice to the Company and the Trustee, the holders of a majority in

aggregate principal amount of the Debt Securities at the time outstanding may

at any time remove the Trustee and nominate a successor Trustee, which shall be

deemed appointed as successor Trustee unless within ten Business Days after

such nomination the Company objects thereto, in which case or in the case of a

failure by such holders to nominate a successor Trustee, the Trustee so removed

or any Securityholder, upon the terms and conditions and otherwise as in subsection

(a) of this Section 6.09 provided, may petition any court of competent

jurisdiction for an appointment of a successor.

(d)           Any resignation

or removal of the Trustee and appointment of a successor Trustee pursuant to

any of the provisions of this Section 6.09 shall become effective upon

acceptance of appointment by the successor Trustee as provided in Section 6.10.

SECTION 6.10  Acceptance by Successor Trustee.

Any successor Trustee

appointed as provided in Section 6.09 shall execute, acknowledge and deliver to

the Company and to its predecessor Trustee an instrument accepting such

appointment hereunder, and thereupon the resignation or removal of the retiring

Trustee shall become effective and such successor Trustee, without any further

act, deed or conveyance, shall become vested with all the rights, powers,

duties and obligations with respect to the Debt Securities of its predecessor

hereunder, with like effect as if originally named as Trustee herein; but,

nevertheless, on the written request of the Company or of the successor

Trustee, the Trustee ceasing to act shall, upon payment of the amounts then due

it pursuant to the provisions of Section 6.06, execute and deliver an

instrument transferring to such successor Trustee all the rights and powers of the

Trustee so ceasing to act and shall duly assign, transfer and deliver to such

successor Trustee all property and money held by such retiring Trustee

thereunder. Upon request of any such successor Trustee, the Company shall

execute any and all instruments in writing for more fully and certainly vesting

in and confirming to such successor Trustee all such rights and powers. Any

Trustee ceasing to act shall, nevertheless, retain a lien upon all property or

funds held or collected by such Trustee to secure any amounts then due it

pursuant to the provisions of Section 6.06.

 

 

35

 

If a successor Trustee is

appointed, the Company, the retiring Trustee and the successor Trustee shall

execute and deliver an indenture supplemental hereto which shall contain such

provisions as shall be deemed necessary or desirable to confirm that all the

rights, powers, trusts and duties of the retiring Trustee with respect to the

Debt Securities as to which the predecessor Trustee is not retiring shall

continue to be vested in the predecessor Trustee, and shall add to or change

any of the provisions of this Indenture as shall be necessary to provide for or

facilitate the administration of the Trust hereunder by more than one Trustee,

it being understood that nothing herein or in such supplemental indenture shall

constitute such Trustees co-trustees of the same trust and that each such

Trustee shall be Trustee of a trust or trusts hereunder separate and apart from

any trust or trusts hereunder administered by any other such Trustee.

No successor Trustee shall

accept appointment as provided in this Section 6.10 unless at the time of such

acceptance such successor Trustee shall be eligible under the provisions of

Section 6.08.

In no event shall a retiring Trustee be liable for

the acts or omissions of any successor Trustee hereunder.

Upon acceptance of

appointment by a successor Trustee as provided in this Section 6.10, the

Company shall mail notice of the succession of such Trustee hereunder to the

holders of Debt Securities at their addresses as they shall appear on the Debt

Security Register. If the Company fails to mail such notice within ten Business

Days after the acceptance of appointment by the successor Trustee, the

successor Trustee shall cause such notice to be mailed at the expense of the

Company.

SECTION 6.11  Succession by Merger, etc.

Any corporation into which

the Trustee may be merged or converted or with which it may be consolidated, or

any corporation resulting from any merger, conversion or consolidation to which

the Trustee shall be a party, or any corporation succeeding to all or

substantially all of the corporate trust business of the Trustee, shall be the

successor of the Trustee hereunder without the execution or filing of any paper

or any further act on the part of any of the parties hereto; provided,

that such corporation shall be otherwise eligible and qualified under this

Article.

In case at the time such

successor to the Trustee shall succeed to the trusts created by this Indenture

any of the Debt Securities shall have been authenticated but not delivered, any

such successor to the Trustee may adopt the certificate of authentication of

any predecessor Trustee, and deliver such Debt Securities so authenticated; and

in case at that time any of the Debt Securities shall not have been

authenticated, any successor to the Trustee may authenticate such Debt

Securities either in the name of any predecessor hereunder or in the name of

the successor Trustee; and in all such cases such certificates shall have the

full force which it is anywhere in the Debt Securities or in this Indenture

provided that the certificate of the Trustee shall have; provided, however,

that the right to adopt the certificate of authentication of any predecessor

Trustee or authenticate Debt Securities in the name of any predecessor Trustee

shall apply only to its successor or successors by merger, conversion or

consolidation.

 

 

36

 

SECTION

6.12  Authenticating Agents.

 

There may be one or more

Authenticating Agents appointed by the Trustee upon the request of the Company

with power to act on its behalf and subject to its direction in the

authentication and delivery of Debt Securities issued upon exchange or

registration of transfer thereof as fully to all intents and purposes as though

any such Authenticating Agent had been expressly authorized to authenticate and

deliver Debt Securities; provided, that the Trustee shall have no

liability to the Company for any acts or omissions of the Authenticating Agent

with respect to the authentication and delivery of Debt Securities. Any such

Authenticating Agent shall at all times be a corporation organized and doing

business under the laws of the United States or of any state or territory

thereof or of the District 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 subject to supervision or examination by federal, state,

territorial or District of Columbia authority. If such corporation publishes

reports of condition at least annually pursuant to law or the requirements of

such authority, then for the purposes of this Section 6.12 the combined capital

and surplus of such corporation shall be deemed to be its combined capital and

surplus as set forth in its most recent report of condition so published. If at

any time an Authenticating Agent shall cease to be eligible in accordance with

the provisions of this Section, it shall resign immediately in the manner and

with the effect herein specified in this Section.

Any corporation into which

any Authenticating Agent may be merged or converted or with which it may be

consolidated, or any corporation resulting from any merger, consolidation or

conversion to which any Authenticating Agent shall be a party, or any

corporation succeeding to all or substantially all of the corporate trust

business of any Authenticating Agent, shall be the successor of such

Authenticating Agent hereunder, if such successor corporation is otherwise

eligible under this Section 6.12 without the execution or filing of any paper

or any further act on the part of the parties hereto or such Authenticating

Agent.

Any Authenticating Agent may

at any time resign by giving written notice of resignation to the Trustee and

to the Company. The Trustee may at any time terminate the agency of any

Authenticating Agent with respect to the Debt Securities by giving written

notice of termination to such Authenticating Agent and to the Company. Upon

receiving such a notice of resignation or upon such a termination, or in case

at any time any Authenticating Agent shall cease to be eligible under this

Section 6.12, the Trustee may, and upon the request of the Company shall,

promptly appoint a successor Authenticating Agent eligible under this Section

6.12, shall give written notice of such appointment to the Company and shall

mail notice of such appointment to all holders of Debt Securities as the names

and addresses of such holders appear on the Debt Security Register. Any

successor Authenticating Agent upon acceptance of its appointment hereunder

shall become vested with all rights, powers, duties and responsibilities with

respect to the Debt Securities of its predecessor hereunder, with like effect

as if originally named as Authenticating Agent herein.

 

 

 

37

 

The Company agrees to pay to any Authenticating

Agent from time to time reasonable compensation for its services. Any

Authenticating Agent shall have no responsibility or liability for any action

taken by it as such in accordance with the directions of the Trustee.

ARTICLE VII

CONCERNING

THE SECURITYHOLDERS

SECTION 7.01  Action by Securityholders.

Whenever in this Indenture

it is provided that the holders of a specified percentage in aggregate

principal amount of the Debt Securities may take any action (including the

making of any demand or request, the giving of any notice, consent or waiver or

the taking of any other action), the fact that at the time of taking any such

action the holders of such specified percentage have joined therein may be

evidenced (a) by any instrument or any number of instruments of similar tenor

executed by such Securityholders in person or by agent or proxy appointed in

writing, or (b) by the record of such holders of Debt Securities voting in

favor thereof at any meeting of such Securityholders duly 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 such a meeting of such

Securityholders or (d) by any other method the Trustee deems satisfactory.

If the Company shall solicit

from the Securityholders any request, demand, authorization, direction, notice,

consent, waiver or other action or revocation of the same, the Company may, at

its option, as evidenced by an Officers’ Certificate, fix in advance a record

date for such Debt Securities for the determination of Securityholders entitled

to give such request, demand, authorization, direction, notice, consent, waiver

or other action or revocation of the same, but the Company shall have no

obligation to do so. If such a record date is fixed, such request, demand,

authorization, direction, notice, consent, waiver or other action 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 record date shall be

deemed to be Securityholders for the purposes of determining whether

Securityholders of the requisite proportion of outstanding Debt Securities have

authorized or agreed or consented to such request, demand, authorization,

direction, notice, consent, waiver or other action or revocation of the same,

and for that purpose the outstanding Debt Securities shall be computed as of

the record date; provided, however, that no such authorization,

agreement or consent by such Securityholders on the record date shall be deemed

effective unless it shall become effective pursuant to the provisions of this

Indenture not later than six months after the record date.

SECTION 7.02  Proof of Execution by Securityholders.

Subject to the provisions of

Sections 6.01, 6.02 and 8.05, proof of the execution of any instrument by a

Securityholder or his agent or proxy shall be sufficient if made in accordance

with such reasonable rules and regulations as may be prescribed by the Trustee

or in such manner as shall be satisfactory to the Trustee. The ownership of

Debt Securities shall be proved by the Debt Security Register or by a

certificate of the Debt Security registrar. The Trustee may require such

additional proof of any matter referred to in this Section as it shall deem

necessary.

 

38

 

The record of any

Securityholders’ meeting shall be proved in the manner provided in Section

8.06.

SECTION 7.03  Who Are Deemed Absolute Owners.

Prior to due presentment for registration of

transfer of any Debt Security, the Company, the Trustee, any Authenticating

Agent, any paying agent, any transfer agent and any Debt Security registrar may

deem the Person in whose name such Debt Security shall be registered upon the

Debt Security Register to be, and may treat him as, the absolute owner of such

Debt Security (whether or not such Debt Security shall be overdue) for the

purpose of receiving payment of or on account of the principal of, premium, if

any, and interest on such Debt Security and for all other purposes; and neither

the Company nor the Trustee nor any Authenticating Agent nor any paying agent

nor any transfer agent nor any Debt Security registrar shall be affected by any

notice to the contrary. All such payments so made to any holder for the time

being or upon his order shall be valid, and, to the extent of the sum or sums so

paid, effectual to satisfy and discharge the liability for moneys payable upon

any such Debt Security.

SECTION 7.04  Debt Securities Owned by Company Deemed

Not Outstanding.

In determining whether the

holders of the requisite aggregate principal amount of Debt Securities have

concurred in any direction, consent or waiver under this Indenture, Debt

Securities which are owned by the Company or any other obligor on the Debt

Securities or by any Person directly or indirectly controlling or controlled by

or under direct or indirect common control with the Company or any other

obligor on the Debt Securities shall be disregarded and deemed not to be

outstanding for the purpose of any such determination; provided, that

for the purposes of determining whether the Trustee shall be protected in

relying on any such direction, consent or waiver, only Debt Securities which a

Responsible Officer of the Trustee actually knows are so owned shall be so

disregarded. Debt Securities so owned which have been pledged in good faith may

be regarded as outstanding for the purposes of this Section 7.04 if the pledgee

shall establish to the satisfaction of the Trustee the pledgee’s right to vote

such Debt Securities and that the pledgee is not the Company or any such other

obligor or Person directly or indirectly controlling or controlled by or under

direct 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 full protection to the Trustee.

SECTION 7.05  Revocation of Consents; Future Holders

Bound.

At any time prior to (but

not after) the evidencing to the Trustee, as provided in Section 7.01, of the

taking of any action by the holders of the percentage in aggregate principal

amount of the Debt Securities specified in this Indenture in connection with

such action, any holder (in cases where no record date has been set pursuant to

Section 7.01) or any holder as of an applicable record date (in cases where a record

date has been set pursuant to Section 7.01) of a Debt Security (or any Debt

Security issued in whole or in part in exchange or substitution therefor) the

serial number of which is shown by the evidence to be included in the Debt

Securities the holders of which have consented to such action may, by filing

written notice with the Trustee at the Principal Office of the Trustee and upon

proof of holding as provided in Section 7.02, revoke such action so far as

concerns such Debt Security (or so far as concerns the principal amount

represented by any exchanged or substituted Debt Security). Except as aforesaid

any such action taken by the holder of any Debt Security shall be conclusive

and binding upon such holder and upon all future holders and owners of such

Debt Security, and of any Debt Security issued in exchange or substitution

therefor or on registration of transfer thereof, irrespective of whether or not

any notation in regard thereto is made upon such Debt Security or any Debt

Security issued in exchange or substitution therefor.

 

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ARTICLE VIII

SECURITYHOLDERS’

MEETINGS

SECTION 8.01  Purposes of Meetings.

A meeting of Securityholders may be called at any

time and from time to time pursuant to the provisions of this Article VIII for

any of the following purposes:

(a)           to give any notice to the

Company or to the Trustee, or to give any directions to the Trustee, or to

consent to the waiving of any default hereunder and its consequences, or to

take any other action authorized to be taken by Securityholders pursuant to any

of the provisions of Article V;

(b)           to remove the

Trustee and nominate a successor trustee pursuant to the provisions of Article

VI;

(c)           to consent to

the execution of an indenture or indentures supplemental hereto pursuant to the

provisions of Section 9.02; or

(d)           to take any other action

authorized to be taken by or on behalf of the holders of any specified

aggregate principal amount of such Debt Securities under any other provision of

this Indenture or under applicable law.

SECTION 8.02  Call of Meetings by Trustee.

The Trustee may at any time

call a meeting of Securityholders to take any action specified in Section 8.01,

to be held at such time and at such place in New York or Wilmington, Delaware,

as the Trustee shall determine. Notice of every meeting of the Securityholders,

setting forth the time and the place of such meeting and in general terms the

action proposed to be taken at such meeting, shall be mailed to holders of Debt

Securities affected at their addresses as they shall appear on the Debt

Securities Register. Such notice shall be mailed not less than 20 nor more than

180 days prior to the date fixed for the meeting.

 

 

40

 

SECTION 8.03  Call of Meetings by Company or

Securityholders.

In case at any time the Company pursuant to a Board

Resolution, or the holders 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 call a meeting of Securityholders, by written request setting forth

in reasonable detail the action proposed to be taken at the meeting, and the

Trustee shall not have mailed the notice of such meeting within 20 days after

receipt of such request, then the Company or such Securityholders may determine

the time and the place in Sioux Falls, South Dakota for such meeting and may

call such meeting to take any action authorized in Section 8.01, by mailing

notice thereof as provided in Section 8.02.

SECTION 8.04 Qualifications

for Voting.

To be entitled to vote at any meeting of

Securityholders a Person shall (a) be a holder of one or more Debt Securities

with respect to which the meeting is being held or (b) a Person appointed by an

instrument in writing as proxy by a holder of one or more such Debt Securities.

The only Persons who shall be entitled to be present or to speak at any meeting

of Securityholders shall be the Persons entitled to vote at such meeting and

their counsel and any representatives of the Trustee and its counsel and any

representatives of the Company and its counsel.

SECTION 8.05  Regulations.

Notwithstanding any other

provisions of this Indenture, the Trustee may make such reasonable regulations

as it may deem advisable for any meeting of Securityholders, in regard to proof

of the holding of Debt Securities and of the appointment of proxies, and in

regard to the appointment and duties of inspectors of votes, the submission and

examination of proxies, certificates and other evidence of the right to vote,

and such other matters concerning the conduct of the meeting as it shall think

fit.

The Trustee shall, by an

instrument in writing, appoint a temporary chairman of the meeting, unless the

meeting shall have been called by the Company or by Securityholders as provided

in Section 8.03, in which case the Company or the Securityholders calling the

meeting, as the case may be, shall in like manner appoint a temporary chairman.

A permanent chairman and a permanent secretary of the meeting shall be elected

by majority vote of the meeting.

Subject to the provisions of

Section 7.04, at any meeting each holder of Debt Securities with respect to

which such meeting is being held or proxy therefor shall be entitled to one

vote for each $1,000 principal amount of Debt Securities held or represented by

him; provided, however, that no vote shall be cast or counted at

any meeting in respect of any Debt Security challenged as not outstanding and

ruled by the chairman of the meeting to be not outstanding. The chairman of the

meeting shall have no right to vote other than by virtue of Debt Securities

held by him or instruments in writing as aforesaid duly designating him as the

Person to vote on behalf of other Securityholders. Any meeting of Securityholders

duly called pursuant to the provisions of Section 8.02 or 8.03 may be adjourned

from time to 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.

 

 

41

 

SECTION 8.06  Voting.

The vote upon any resolution submitted to any

meeting of holders of Debt Securities with respect to which such meeting is

being held shall be by written ballots on which shall be subscribed the

signatures of such holders or of their representatives by proxy and the serial

number or numbers of the Debt Securities held or represented by them. The

permanent chairman of the meeting shall appoint two inspectors of votes who

shall count all votes cast at the meeting for or against any resolution and who

shall make and file with the secretary of the meeting their

verified written reports in triplicate of all votes cast at the meeting. A

record in duplicate of the proceedings of each meeting of Securityholders shall

be prepared by the secretary of the meeting and there shall be attached to said

record the original reports of the inspectors of votes on any vote by ballot

taken thereat and affidavits by one or more Persons having knowledge of the facts

setting forth a copy of the notice of the meeting and showing that said notice

was mailed as provided in Section 8.02. The record shall show the serial

numbers of the Debt Securities voting in favor of or against any resolution.

The record shall be signed and verified by the affidavits of the permanent

chairman and secretary of the meeting and one of the duplicates shall be

delivered to the Company and the other to the Trustee to be preserved by the

Trustee, the latter to have attached thereto the ballots voted at the meeting.

Any record so signed and verified shall be

conclusive evidence of the matters therein stated.

SECTION 8.07  Quorum; Actions.

The Persons entitled to vote

a majority in outstanding principal amount of the Debt Securities shall constitute

a quorum for a meeting of Securityholders; provided, however,

that if any action is to be taken at such meeting with respect to a consent,

waiver, request, demand, notice, authorization, direction or other action which

may be given by the holders of not less than a specified percentage in

outstanding principal amount of the Debt Securities, the Persons holding or

representing such specified percentage in outstanding principal amount of the

Debt Securities will constitute a quorum. In the absence of a quorum within 30

minutes of the time appointed for any such meeting, the meeting shall, if

convened at the request of Securityholders, be dissolved. In any other case the

meeting may be adjourned for a period of not less than 10 days as determined by

the permanent chairman of the meeting prior to the adjournment of such meeting.

In the absence of a quorum at any such adjourned meeting, such adjourned

meeting may be further adjourned for a period of not less than 10 days as

determined by the permanent chairman of the meeting prior to the adjournment of

such adjourned meeting. Notice of the reconvening of any adjourned meeting

shall be given as provided in Section 8.02, except that such notice need be

given only once not less than five days prior to the date on which the meeting

is scheduled to be reconvened. Notice of the reconvening of an adjourned

meeting shall state expressly the percentage, as provided above, of the

outstanding principal amount of the Debt Securities which shall constitute a

quorum.

Except as limited by the

proviso in the first paragraph of Section 9.02, any resolution presented to a

meeting or adjourned meeting duly reconvened at which a quorum is present as

aforesaid may be adopted by the affirmative vote of the holders of not less

than a majority in outstanding principal amount of the Debt Securities; provided,

however, that, except as limited by the proviso in the first paragraph

of Section 9.02, any resolution with respect to any consent, waiver, request,

demand, notice, authorization, direction or other action that this Indenture

expressly provides may be given by the holders of not less than a specified

percentage in outstanding principal amount of the Debt Securities may be

adopted at a meeting or an adjourned meeting duly reconvened and at which a

quorum is present as aforesaid only by the affirmative vote of the holders of

not less than such specified percentage in outstanding principal amount of the

Debt Securities.

 

 

42

 

Any resolution passed or

decision taken at any meeting of holders of Debt Securities duly held in

accordance with this Section shall be binding on all the Securityholders,

whether or not present or represented at the meeting.

ARTICLE IX

SUPPLEMENTAL

INDENTURES

SECTION 9.01  Supplemental Indentures without Consent

of Securityholders.

The Company, when authorized

by a Board Resolution, and the Trustee may from time to time and at any time

enter into an indenture or indentures supplemental hereto, without the consent

of the Securityholders, for one or more of the following purposes:

(a)           to evidence the succession

of another corporation to the Company, or successive successions, and the

assumption by the successor corporation of the covenants, agreements and

obligations of the Company, pursuant to Article XI hereof;

(b)           to add to the

covenants of the Company such further covenants, restrictions or conditions for

the protection of the holders of Debt Securities as the Board of Directors

shall consider to be for the protection of the holders of such Debt Securities,

and to make the occurrence, or the occurrence and continuance, of a default in

any of such additional covenants, restrictions or conditions a default or an

Event of Default permitting the enforcement of all or any of the several

remedies provided in this Indenture as herein set forth; provided, however,

that in respect of any such additional covenant, restriction or condition such

supplemental indenture may provide for a particular period of grace after

default (which period may be shorter or longer than that allowed in the case of

other defaults) or may provide for an immediate enforcement upon such default

or may limit the remedies available to the Trustee upon such default;

(c)           to cure any

ambiguity or to correct or supplement any provision contained herein or in any

supplemental indenture which may be defective or inconsistent with any other

provision contained herein or in any supplemental indenture, or to make such

other provisions in regard to matters or questions arising under this

Indenture; provided, that any such action shall not adversely affect the

interests of the holders of the Debt Securities;

(d)           to add to, delete from, or

revise the terms of Debt Securities, including, without limitation, any terms

relating to the issuance, exchange, registration or transfer of Debt

Securities, including to provide for transfer procedures and restrictions

substantially similar to those applicable to the Capital Securities as required

by Section 2.05 (for purposes of assuring that no registration of Debt

Securities is required under the Securities Act of 1933, as amended); provided,

that any such action shall not adversely affect the interests of the holders of

the Debt Securities then outstanding (it being understood, for purposes of this

proviso, that transfer restrictions on Debt Securities substantially similar to

those that were applicable to Capital Securities shall not be deemed to

adversely affect the holders of the Debt Securities);

 

 

 

43

 

(e)           to evidence and

provide for the acceptance of appointment hereunder by a successor Trustee with

respect to the Debt Securities and to add to or change any of the provisions of

this Indenture as shall be necessary to provide for or facilitate the

administration of the trusts hereunder by more than one Trustee, pursuant to

the requirements of Section 6.10;

(f)            to make any

change (other than as elsewhere provided in this paragraph) that does not

adversely affect the rights of any Securityholder in any material respect; or

(g)           to provide for

the issuance of and establish the form and terms and conditions of the Debt

Securities, to establish the form of any certifications required to be

furnished pursuant to the terms of this Indenture or the Debt Securities, or to

add to the rights of the holders of Debt Securities.

The Trustee is hereby

authorized to join with the Company in the execution of any such supplemental

indenture, to make any further appropriate agreements and stipulations which

may be therein contained and to accept the conveyance, transfer and assignment

of any property thereunder, but the Trustee shall not be obligated to, but may

in its discretion, enter into any such supplemental indenture which affects the

Trustee’s own rights, duties or immunities under this Indenture or otherwise.

Any supplemental indenture

authorized by the provisions of this Section 9.01 may be executed by the

Company and the Trustee without the consent of the holders of any of the Debt

Securities at the time outstanding, notwithstanding any of the provisions of

Section 9.02.

SECTION 9.02  Supplemental Indentures with Consent of

Securityholders.

With the consent (evidenced

as provided in Section 7.01) of the holders of not less than a majority in aggregate

principal amount of the Debt Securities at the time outstanding affected by

such supplemental indenture (voting as a class), the Company, when authorized

by a Board Resolution, and the Trustee may from time to time and at any time

enter into an indenture or indentures supplemental hereto (which shall conform

to the provisions of the Trust Indenture Act, then in effect, applicable to

indentures qualified thereunder) for the purpose of adding any provisions to or

changing in any manner or eliminating any of the provisions of this Indenture

or of any supplemental indenture or of modifying in any manner the rights of

the holders of the Debt Securities; provided, however, that no

such supplemental indenture shall without such consent of the holders of each

Debt Security then outstanding and affected thereby (i) extend the fixed maturity of any Debt

Security, or reduce the principal amount thereof or any premium thereon, or

reduce the rate or extend the time of payment of interest thereon, or reduce

any amount payable on redemption thereof or make the principal thereof or any

interest or premium thereon payable in any coin or currency other than

that provided in the Debt Securities, or impair or affect the right of any

Securityholder to institute suit for payment thereof or impair the right of

repayment, if any, at the option of the holder, or (ii) reduce the aforesaid

percentage of Debt Securities the holders of which are required to consent to

any such supplemental indenture; and provided, further, that if the

Debt Securities are held by the Trust or a trustee of such trust, such

supplemental indenture shall not be effective until the holders of a majority

in liquidation preference of Trust Securities shall have consented to such

supplemental indenture; provided, further, that if the consent of the

Securityholder of each outstanding Debt Security is required, such supplemental

indenture shall not be effective until each holder of the Trust Securities

shall have consented to such supplemental indenture.

 

 

44

 

Upon the request of the

Company accompanied by a Board Resolution authorizing the execution of any such

supplemental indenture, and upon the filing with the Trustee of evidence of the

consent of Securityholders as aforesaid, the Trustee shall join with the

Company in the execution of such supplemental indenture unless such

supplemental indenture affects the Trustee’s own rights, duties or immunities

under this Indenture or otherwise, in which case the Trustee may in its

discretion, but shall not be obligated to, enter into such supplemental

indenture.

Promptly after the execution

by the Company and the Trustee of any supplemental indenture pursuant to the

provisions of this Section, the Trustee shall transmit by mail, first class

postage prepaid, a notice, prepared by the Company, setting forth in general

terms the substance of such supplemental indenture, to the Securityholders

thereby as their names and addresses appear upon the Debt Security Register.

Any failure of the Trustee to mail such notice, or any defect therein, shall

not, however, in any way impair or affect the validity of any such supplemental

indenture.

It shall not be necessary for the consent of the

Securityholders under this Section 9.02 to approve the particular form of any

proposed supplemental indenture, but it shall be sufficient if such consent

shall approve the substance thereof.

SECTION 9.03  Effect of Supplemental Indentures.

Upon the execution of any

supplemental indenture pursuant to the provisions of this Article IX, this

Indenture shall be and be deemed to be modified and amended in accordance

therewith and the respective rights, limitations of rights, 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 modifications and amendments and all

the terms and conditions of any such supplemental indenture shall be and be

deemed to be part of the terms and conditions of this Indenture for any and all

purposes.

SECTION 9.04  Notation on Debt Securities.

Debt Securities

authenticated and delivered after the execution of any supplemental indenture

pursuant to the provisions of this Article IX may bear a notation as to any

matter provided for in such supplemental indenture. If the Company or the

Trustee shall so determine, new Debt Securities so modified as to conform, in

the opinion of the Board of Directors of the Company, to any modification of

this Indenture contained in any such supplemental indenture may be prepared and

executed by the Company, authenticated by the Trustee or the Authenticating

Agent and delivered in exchange for the Debt Securities then outstanding.

 

 

45

 

SECTION

9.05  Evidence of 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 an Officers’ Certificate and an Opinion of

Counsel as conclusive evidence that any supplemental indenture executed

pursuant hereto complies with the requirements of this Article IX. The Trustee

shall receive an Opinion of Counsel as conclusive evidence that any

supplemental indenture executed pursuant to this Article IX is authorized or

permitted by, and conforms to, the terms of this Article IX and that it is

proper for the Trustee under the provisions of this Article IX to join in the

execution thereof.

ARTICLE X

REDEMPTION

OF SECURITIES

SECTION 10.01  Optional Redemption.

At any time the Company

shall have the right, subject to the receipt by the Company of prior approval

from the OTS, if then required under applicable capital guidelines or policies

of the OTS, to redeem the Debt Securities, in whole or in part, on any June 8th

or December 8th on or after December 8, 2006 (the “Redemption Date”), at the

Redemption Price.

SECTION 10.02  Special Event Redemption.

If a Special Event shall

occur and be continuing, the Company shall have the right, subject to the

receipt by the Company of prior approval from the OTS if then required under

applicable capital guidelines or policies of the OTS, to redeem the Debt

Securities, in whole but not in part, at any time within 90 days following the

occurrence of such Special Event (the “Special Redemption Date”), at the

Special Redemption Price.

SECTION 10.03  Notice of 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 date for redemption and shall mail a notice

of such redemption at least 30 and not more than 60 days prior to the date

fixed for redemption to the holders of Debt Securities so to be redeemed as a

whole or in part at their last addresses as the same appear on the Debt

Security Register. Such mailing shall be by first class mail. The notice if

mailed in the manner herein provided shall be conclusively presumed to have been

duly given, whether or not the holder receives such notice. In any case,

failure to give such notice by mail or any defect in the notice to the holder

of any Debt Security designated for redemption as a whole or in part shall not

affect the validity of the proceedings for the redemption of any other Debt

Security.

 

 

46

 

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 redemption price at which Debt Securities are to be redeemed,

the place or places of payment, that payment will be made upon presentation and

surrender of such Debt Securities, that interest accrued to the date fixed for

redemption will be paid as specified in said notice, and that on and after said

date interest thereon or on the portions thereof to be redeemed will cease to

accrue. If less than all the Debt Securities are to be redeemed the notice of

redemption shall specify the numbers of the Debt Securities to be redeemed. In

case the Debt Securities are to be redeemed in part only, the notice of

redemption shall state the portion of the principal amount thereof to be

redeemed and shall state that on and after the date fixed for redemption, upon

surrender of such Debt Security, a new Debt Security or Debt Securities in

principal amount equal to the unredeemed portion thereof will be issued.

Prior to 10:00 a.m. New York

City time on the Redemption Date or the Special Redemption Date specified in the

notice of redemption given as provided in this Section, the Company will

deposit with the Trustee or with one or more paying agents an amount of money

sufficient to redeem on the redemption date all the Debt Securities so called

for redemption at the appropriate redemption price, together with accrued

interest to the date fixed for redemption.

The Company will give the

Trustee notice not less than 45 nor more than 60 days prior to the redemption

date as to the redemption price at which the Debt Securities are to be redeemed

and the aggregate principal amount of Debt Securities to be redeemed and the

Trustee shall select, in such manner as in its sole discretion it shall deem

appropriate and fair, the Debt Securities or portions thereof (in integral multiples

of $1,000) to be redeemed.

SECTION 10.04  Payment of 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 such notice has been given shall become

due and payable on the Redemption Date or the Special Redemption Date (as the

case may be) and at the place or places stated in such notice at the applicable

redemption price, together with interest accrued to the date fixed for redemption,

and on and after said Redemption Date or the Special Redemption Date (unless

the Company shall default in the payment of such Debt Securities at the

redemption price, together with interest accrued to said date) interest on the

Debt Securities or portions of Debt Securities so called for redemption shall

cease to accrue. On presentation and surrender of such Debt Securities at a

place of payment specified in said notice, such Debt Securities or the

specified portions thereof shall be paid and redeemed by the Company at the

applicable redemption price, together with interest accrued thereon to the

Redemption Date or the Special Redemption Date (as the case may be).

Upon presentation of any

Debt Security redeemed in part only, the Company shall execute and the Trustee

shall authenticate and make available for delivery to the holder thereof, at

the expense of the Company, a new Debt Security or Debt Securities of

authorized denominations in principal amount equal to the unredeemed portion of

the Debt Security so presented.

 

 

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ARTICLE XI

CONSOLIDATION,

MERGER, SALE, CONVEYANCE AND LEASE

SECTION 11.0l  Company May Consolidate, etc., on Certain

Terms.

Nothing contained in this

Indenture or in the Debt Securities shall prevent any consolidation or merger

of the Company with or into any other corporation or corporations (whether or

not affiliated with the Company) or successive consolidations or mergers in

which the Company or its successor or successors shall be a party or parties,

or shall prevent any sale, conveyance, transfer or other disposition of the

property or capital stock of the Company or its successor or successors as an

entirety, or substantially as an entirety, to any other corporation (whether or

not affiliated with the Company, or its successor or successors) authorized to

acquire and operate the same; provided, however, that the Company

hereby covenants and agrees that, upon any such consolidation, merger (where

the Company is not the surviving corporation), sale, conveyance, transfer or

other disposition, the due and punctual payment of the principal of (and

premium, if any) and interest on all of the Debt Securities in accordance with

their terms, according to their tenor, and the due and punctual performance and

observance of all the covenants and conditions of this Indenture to be kept or

performed by the Company, shall be expressly assumed by supplemental indenture

satisfactory in form to the Trustee executed and delivered to the Trustee by the

entity formed by such consolidation, or into which the Company shall have been

merged, or by the entity which shall have acquired such property or capital

stock.

SECTION 11.02  Successor Entity to be Substituted.

In case of any such

consolidation, merger, sale, conveyance, transfer or other disposition and upon

the assumption by the successor entity, by supplemental indenture, executed and

delivered to the Trustee and satisfactory in form to the Trustee, of the due

and punctual payment of the principal of and premium, if any, and interest on

all of the Debt Securities and the due and punctual performance and observance

of all of the covenants and conditions of this Indenture to be performed or

observed by the Company, such successor entity shall succeed to and be

substituted for the Company, with the same effect as if it had been named

herein as the Company, and thereupon the predecessor entity shall be relieved

of any further liability or obligation hereunder or upon the Debt Securities.

Such successor entity thereupon may cause to be signed, and may issue either in

its own name or in the name of the Company, any or all of the Debt Securities

issuable hereunder which theretofore shall not have been signed by the Company

and delivered to the Trustee or the Authenticating Agent; and, upon the order

of such successor entity instead of the Company and subject to all the terms,

conditions and limitations in this Indenture prescribed, the Trustee or the

Authenticating Agent shall authenticate and deliver any Debt Securities which

previously shall have been signed and delivered by the officers of the Company,

to the Trustee or the Authenticating Agent for authentication, and any Debt

Securities which such successor entity thereafter shall cause to be signed and

delivered to the Trustee or the Authenticating Agent for that purpose. All the

Debt Securities so issued shall in all respects have the same legal rank and

benefit under this Indenture as the Debt Securities theretofore or thereafter

issued in accordance with the terms of this Indenture as though all of such

Debt Securities had been issued at the date of the execution hereof.

 

 

48

 

SECTION

11.03  Opinion of Counsel to be

Given to Trustee.

 

The Trustee, subject to the

provisions of Sections 6.01 and 6.02, shall receive, in addition to the Opinion

of Counsel required by Section 9.05, an Opinion of Counsel as conclusive

evidence that any consolidation, merger, sale, conveyance, transfer or other

disposition, and any assumption, permitted or required by the terms of this

Article XI complies with the provisions of this Article XI.

ARTICLE XII

SATISFACTION

AND DISCHARGE OF INDENTURE

SECTION 12.01  Discharge of Indenture.

When (a) the Company shall

deliver to the Trustee for cancellation all Debt Securities theretofore

authenticated (other than any Debt Securities which shall have been destroyed,

lost or stolen and which shall have been replaced or paid as provided in

Section 2.06) and not theretofore canceled, or (b) all the Debt Securities not

theretofore canceled or delivered to the Trustee for cancellation shall have

become due and payable, or are by their terms to become due and payable within

one year or are to be called for redemption within one year under arrangements

satisfactory to the Trustee for the giving of notice of redemption, and the

Company shall deposit with the Trustee, in trust, funds, which shall be

immediately due and payable, sufficient to pay at maturity or upon redemption

all of the Debt Securities (other than any Debt Securities which shall have

been destroyed, lost or stolen and which shall have been replaced or paid as

provided in Section 2.06) not theretofore canceled or delivered to the Trustee

for cancellation, including principal and premium, if any, and interest due or

to become due to such date of maturity or 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 the Company in accordance with the provisions of Section 12.04, or

(2) paid to any state or to the District of Columbia pursuant to its unclaimed

property or similar laws, and if in the case of either clause (a) or clause (b)

the Company shall also 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 the provisions of Sections 2.05, 2.06, 3.01, 3.02, 3.04, 6.06, 6.09 and

12.04 hereof, which shall survive until such Debt Securities shall mature or

are redeemed, as the case may be, and are paid. Thereafter, Sections 6.06, 6.09

and 12.04 shall survive, and the Trustee, on demand of the Company accompanied

by an Officers’ Certificate and an Opinion of Counsel, each stating that all

conditions precedent herein provided for relating to the satisfaction and

discharge of this Indenture have been complied with, and at the cost and

expense of the Company, shall execute proper instruments acknowledging

satisfaction of and discharging this Indenture, the Company, however, hereby

agreeing to reimburse the Trustee for any costs or expenses thereafter

reasonably and properly incurred by the Trustee in connection with this

Indenture or the Debt Securities.

SECTION 12.02  Deposited Moneys to be Held in Trust by

Trustee.

Subject to the provisions of

Section 12.04, all moneys deposited with the Trustee pursuant to Section 12.01

shall be held in trust and applied by it to the payment, either directly or

through any paying agent (including the Company if acting as its own paying

agent), to the holders of the particular Debt Securities for the payment of

which such moneys have been deposited with the Trustee, of all sums due and to

become due thereon for principal, and premium, if any, and interest.

 

 

49

 

SECTION

12.03  Paying Agent to Repay Moneys

Held.

 

Upon the satisfaction and

discharge of this Indenture, all moneys then held by any paying agent of the

Debt Securities (other than the Trustee) shall, upon demand of the Company, be

repaid to it or paid to the Trustee, and thereupon such paying agent shall be

released from all further liability with respect to such moneys.

SECTION 12.04  Return of Unclaimed Moneys.

Any moneys deposited with or

paid to the Trustee or any paying agent for payment of the principal of, and

premium, if any, or interest on Debt Securities and not applied but remaining

unclaimed by the holders of Debt Securities for two years after the date upon

which the principal of, and premium, if any, or interest on such Debt

Securities, as the case may be, shall have become due and payable, shall be

repaid to the Company by the Trustee or such paying agent on written demand;

and the holder of any of the Debt Securities shall thereafter look only to the

Company for any payment which such holder may be entitled to collect and all

liability of the Trustee or such paying agent with respect to such moneys shall

thereupon cease.

ARTICLE XIII

IMMUNITY OF INCORPORATORS,

STOCKHOLDERS, OFFICERS AND DIRECTORS

SECTION 13.01  Indenture and Debt Securities Solely

Corporate Obligations.

No recourse for the payment

of the principal of or premium, if any, or interest on any Debt Security, or

for any claim based thereon or otherwise in respect thereof, and no recourse

under or upon any obligation, covenant or agreement of the Company in this

Indenture or in any supplemental indenture, or in any such Debt Security, or

because of the creation of any indebtedness represented thereby, shall be had

against any incorporator, stockholder, officer, director, employee or agent, as

such, past, present or future, of the Company or of any successor corporation

of the Company, either directly or through the Company or any successor

corporation of the Company, whether by virtue of any constitution, statute or

rule of law, or by the enforcement of any assessment or penalty or otherwise;

it being expressly understood that all such liability is hereby expressly

waived and released as a condition of, and as a consideration for, the

execution of this Indenture and the issue of the Debt Securities.

 

 

50

 

ARTICLE XIV

MISCELLANEOUS PROVISIONS

SECTION 14.01  Successors.

All the covenants,

stipulations, promises and agreements of the Company contained in this

Indenture shall bind its successors and assigns whether so expressed or not.

SECTION 14.02  Official Acts by Successor

Entity.

Any act or proceeding by any

provision of this Indenture authorized or required to be done or performed by

any board, committee or officer of the Company shall and may be done and

performed with like force and effect by the like board, committee, officer or

other authorized Person of any entity that shall at the time be the lawful

successor of the Company.

SECTION 14.03  Surrender of Company Powers.

The Company by instrument in

writing executed by authority of 2/3 (two-thirds) of its Board of Directors and

delivered to the Trustee may surrender any of the powers reserved to the

Company and thereupon such power so surrendered shall terminate both as to the

Company, and as to any permitted successor.

SECTION 14.04  Addresses for Notices, etc.

Any notice or demand which

by any provision of this Indenture is required or permitted to be given or served

by the Trustee or by the Securityholders on the Company may be given or served

in writing by being deposited postage prepaid by registered or certified mail

in a post office letter box addressed (until another address is filed by the

Company, with the Trustee for the purpose) to the Company at 225 South Main

Avenue, Sioux Falls, South Dakota 57104, Attention: Curtis L. Hage. Any notice,

direction, request or demand by any Securityholder or the Company to or upon

the Trustee shall be deemed to have been sufficiently given or made, for all

purposes, if given or made in writing at the office of Wilmington Trust Company

at Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890,

Attention: Corporate Trust Administration.

SECTION 14.05  Governing Law.

This Indenture and each Debt

Security shall be deemed to be a contract made under the law of the State of

New York, and for all purposes shall be governed by and construed in accordance

with the law of said State, without regard to conflict of laws principles

thereof.

SECTION 14.06  Evidence of Compliance with Conditions

Precedent.

Upon any application or

demand by the Company to the Trustee to take any action under any of the

provisions of this Indenture, the Company shall furnish to the Trustee an

Officers’ Certificate stating that in the opinion of the signers all conditions

precedent, if any, provided for in this Indenture relating to the proposed

action have been complied with and an Opinion of Counsel stating that, in the

opinion of such counsel, all such conditions precedent have been complied with.

 

 

51

 

Each certificate or opinion

provided for in this Indenture and delivered to the Trustee with respect to

compliance with a condition or covenant provided for in this Indenture (except

certificates delivered pursuant to Section 3.05) shall include (a) a statement

that the person making such certificate or opinion has read such covenant or

condition; (b) a brief statement as to the nature and scope of the examination

or investigation upon which the statements or opinions contained in such

certificate or opinion are based; (c) a statement that, in the opinion of such

person, he has made such examination or investigation as is necessary to enable

him to express an informed opinion as to whether or not such covenant or

condition has been complied with; and (d) a statement as to whether or not, in

the opinion of such person, such condition or covenant has been complied with.

SECTION 14.07  Non-Business Days.

In any case where the date of payment of interest on

or principal of the Debt Securities is not a Business Day, the payment of such

interest on or principal of the Debt Securities need not be made on such date

but may be made on the next succeeding Business Day, with the same force and

effect as if made on the date of payment and no interest shall accrue for the

period from and after such date, except if such Business Day is in the next

succeeding calendar year, such payment will be made on the immediately

preceding Business Day.

SECTION 14.08  Table of Contents, Headings, etc.

The table of contents and the titles and headings of

the articles and sections of this Indenture have been inserted for convenience

of reference only, are not to be considered a part hereof, and shall in no way

modify or restrict any of the terms or provisions hereof.

SECTION 14.09  Execution in Counterparts.

This Indenture may be executed in any number of

counterparts, each of which shall be an original, but such counterparts shall

together constitute but one and the same instrument.

SECTION 14.10  Separability.

In case any one or more of the provisions contained

in this Indenture or in the Debt Securities shall for any reason be held to be

invalid, illegal or unenforceable in any respect, such invalidity, illegality

or unenforceability shall not affect any other provisions of this Indenture or

of such Debt Securities, but this Indenture and such Debt Securities shall be

construed as if such invalid or illegal or unenforceable provision had never

been contained herein or therein.

SECTION 14.11  Assignment.

The Company will have the

right at all times to assign any of its rights or obligations under this

Indenture to a direct or indirect wholly owned Subsidiary of the Company, provided,

that, in the event of any such assignment, the Company will remain liable for

all such obligations. Subject to the foregoing, this Indenture is binding upon

and inures to the benefit of the parties hereto and their respective successors

and assigns. This Indenture may not otherwise be assigned by the parties

thereto.

 

 

52

 

SECTION 14.12  Acknowledgment of Rights.

The Company acknowledges

that, with respect to any Debt Securities held by the Trust or the

Institutional Trustee of the Trust, if the Institutional Trustee of the Trust

fails to enforce its rights under this Indenture as the holder of Debt

Securities held as the assets of the Trust after the holders of a majority in

Liquidation Amount of the Capital Securities of the Trust have so directed in

writing such Institutional Trustee, a holder of record of such Capital

Securities may to the fullest extent permitted by law institute legal

proceedings directly against the Company to enforce such Institutional

Trustee’s rights under this Indenture without first instituting any legal

proceedings against such Institutional Trustee or any other Person.

Notwithstanding the foregoing, if an Event of Default has occurred and is

continuing and such event is attributable to the failure of the Company to pay

interest (or premium, if any) or principal on the Debt Securities on the date

such interest (or premium, if any) or principal is otherwise due and payable

(or in the case of redemption, on the redemption date), the Company

acknowledges that a holder of record of Capital Securities of the Trust may

directly institute a proceeding against the Company for enforcement of payment

to such holder directly of the principal of (or premium, if any) or interest on

the Debt Securities having an aggregate principal amount equal to the aggregate

Liquidation Amount of the Capital Securities of such holder on or after the

respective due date specified in the Debt Securities.

ARTICLE XV

SUBORDINATION

OF DEBT SECURITIES

SECTION 15.01  Agreement to Subordinate.

The Company covenants and agrees, and each holder of

Debt Securities issued hereunder and under any supplemental indenture (the

“Additional Provisions”) by such Securityholder’s acceptance thereof likewise

covenants and agrees, that all Debt Securities shall be issued subject to the

provisions of this Article XV; and each holder of a Debt Security, whether upon

original issue or upon transfer or assignment thereof, accepts and agrees to be

bound by such provisions.

The payment by the Company of the principal of, and

premium, if any, and interest on all Debt Securities issued hereunder and under

any Additional Provisions shall, to the extent and in the manner hereinafter

set forth, be subordinated and junior in right of payment 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 any default or Event of

Default hereunder.

 

53

 

SECTION 15.02  Default on Senior Indebtedness.

In the event and during the

continuation of any default by the Company in the payment of principal,

premium, interest or any other payment due on any Senior Indebtedness of the

Company following any applicable grace period, or in the event that the

maturity of any Senior Indebtedness of the Company has been accelerated because

of a default, and such acceleration has not been rescinded or canceled and such

Senior Indebtedness has not been paid in full then, in either case, no payment

shall be made by the Company with respect to the principal of, or premium, if

any, or interest on the Debt Securities.

In the event that,

notwithstanding the foregoing, any payment shall be received by the Trustee

when such payment is prohibited by the preceding paragraph of this Section

15.02, such payment shall, subject to Section 15.06, be held in trust for the

benefit of, and shall be paid over or delivered to, the holders of Senior

Indebtedness or their respective representatives, or to the trustee or trustees

under any indenture pursuant to which any of such Senior Indebtedness may have

been issued, as their respective interests may appear, but only to the extent

that the holders of the Senior Indebtedness (or their representative or

representatives or a trustee) notify the Trustee in writing within 90 days of

such payment of the amounts then due and owing on the Senior Indebtedness and

only the amounts specified in such notice to the Trustee shall be paid to the

holders of Senior Indebtedness.

SECTION 15.03  Liquidation; Dissolution; Bankruptcy.

Upon any payment by the

Company or distribution of assets of the Company of any kind or character,

whether in cash, property or securities, to creditors upon any dissolution or

winding-up or liquidation or reorganization of the Company, whether voluntary

or involuntary or in bankruptcy, insolvency, receivership or other proceedings,

all amounts due upon all Senior Indebtedness of the Company shall first be paid

in full, or payment thereof provided for in money in accordance with its terms,

before any payment is made by the Company, on account of the principal (and

premium, if any) or interest on the Debt Securities; and upon any such dissolution

or winding-up or liquidation or reorganization, any payment by the Company, or

distribution of assets of the Company of any kind or character, whether in

cash, property or securities, to which the Securityholders or the Trustee would

be entitled to receive from the Company, except for the provisions of this

Article XV, shall be paid by the Company, or by any receiver, trustee in

bankruptcy, liquidating trustee, agent or other Person making such payment or

distribution, or by the Securityholders or by the Trustee under this Indenture

if received by them or it, directly to the holders of Senior Indebtedness of

the Company (pro rata to such holders on the basis of the respective amounts of

Senior Indebtedness held by such holders, as calculated by the Company) or

their representative or representatives, or to the trustee or trustees under

any indenture pursuant to which any instruments evidencing such Senior

Indebtedness may have been issued, as their respective interests may appear, to

the extent necessary to pay such Senior Indebtedness in full, in money or

money’s worth, after giving effect to any concurrent payment or distribution to

or for the holders of such Senior Indebtedness, before any payment or

distribution is made to the Securityholders.

 

 

54

 

In the event that,

notwithstanding the foregoing, any payment or distribution of assets of the

Company of any kind or character, whether in cash, property or securities,

prohibited by the foregoing, shall be received by the Trustee before all Senior

Indebtedness of the Company is paid in full, or provision is made for such

payment in money in accordance with its terms, such payment or distribution

shall be held in trust for the benefit of and shall be paid over or delivered

to the holders of such Senior Indebtedness or their representative or

representatives, or to the trustee or trustees under any indenture pursuant to

which any instruments evidencing such Senior Indebtedness may have been issued,

as their respective interests may appear, as calculated by the Company, for

application to the payment of all Senior Indebtedness of the Company, remaining

unpaid to the extent necessary to pay such Senior Indebtedness in full in money

in accordance with its terms, after giving effect to any concurrent payment or

distribution to or for the benefit of the holders of such Senior Indebtedness.

 

For purposes of this Article

XV, the words “cash, property or securities” shall not be deemed to include

shares of stock of the Company as reorganized or readjusted, or securities of

the Company or any other corporation provided for by a plan of reorganization

or readjustment, the payment of which is subordinated at least to the extent

provided in this Article XV with respect to the Debt Securities to the payment

of all Senior Indebtedness 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 of the holders of such Senior Indebtedness are not, without the

consent of such holders, altered by such reorganization or readjustment. The

consolidation of the Company with, or the merger of the Company into, another

corporation or the liquidation or dissolution of the Company following the

conveyance or transfer of its property as an entirety, or substantially as an

entirety, to another corporation upon the terms and conditions provided for in

Article IX of this Indenture shall not be deemed a dissolution, winding-up,

liquidation or reorganization for the purposes of this Section 15.03 if such

other corporation shall, as a part of such consolidation, merger, conveyance or

transfer, comply with the conditions stated in Article IX of this Indenture.

Nothing in Section 15.02 or in this Section 15.03 shall apply to claims of, or

payments to, the Trustee under or pursuant to Section 6.06 of this Indenture.

SECTION 15.04  Subrogation.

Subject to the payment in

full of all Senior Indebtedness of the Company, the Securityholders shall be

subrogated to the rights of the holders of such Senior Indebtedness to receive

payments or distributions of cash, property or securities of the Company,

applicable to such Senior Indebtedness until the principal of (and premium, if

any) and interest on the Debt Securities shall be paid in full; and, for the

purposes of such subrogation, no payments or distributions to the holders of

such Senior Indebtedness of any cash, property or securities to which the

Securityholders or the Trustee would be entitled except for the provisions of

this Article XV, and no payment over pursuant to the provisions of this Article

XV to or for the benefit of the holders of such Senior Indebtedness by

Securityholders or the Trustee, shall, as between the Company, its creditors

other than holders of Senior Indebtedness of the Company, and the holders of

the Debt Securities be deemed to be a payment or distribution by the Company to

or on account of such Senior Indebtedness. It is understood that the provisions

of this Article XV are and are intended solely for the purposes of defining the

relative rights of the holders of the Debt Securities, on the one hand, and the

holders of such Senior Indebtedness, on the other hand.

 

 

55

 

Nothing contained in this

Article XV or elsewhere in this Indenture, any Additional Provisions or in the

Debt Securities is intended to or shall impair, as between the Company, its

creditors other than the holders of Senior Indebtedness of the Company, and the

holders of the Debt Securities, the obligation of the Company, which is

absolute and unconditional, to pay to the holders of the Debt Securities the

principal of (and premium, if any) and interest on the Debt Securities as and

when the same shall become due and payable in accordance with their terms, or

is intended to or shall affect the relative rights of the holders of the Debt

Securities and creditors of the Company, other than the holders of Senior

Indebtedness of the Company, nor shall anything herein or therein prevent the

Trustee or the holder of any Debt Security from exercising all remedies

otherwise permitted by applicable law upon default under this Indenture,

subject to the rights, if any, under this Article XV of the holders of such

Senior Indebtedness in respect of cash, property or securities of the Company,

received upon the exercise of any such remedy.

Upon any payment or

distribution of assets of the Company referred to in this Article XV, the

Trustee, subject to the provisions of Article VI of this Indenture, and the

Securityholders shall be entitled to conclusively rely upon any order or decree

made by any court of competent jurisdiction in which such dissolution,

winding-up, liquidation or reorganization proceedings are pending, or a

certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent

or other Person making such payment or distribution, delivered to the Trustee

or to the Securityholders, for the purposes of ascertaining the Persons

entitled to participate in such distribution, the holders of Senior

Indebtedness and other indebtedness of the Company, the amount thereof or

payable thereon, the amount or amounts paid or distributed thereon and all

other facts pertinent thereto or to this Article XV.

SECTION 15.05  Trustee to Effectuate Subordination.

Each Securityholder by such

Securityholder’s acceptance thereof authorizes and directs the Trustee on such

Securityholder’s behalf to take such action as may be necessary or appropriate

to effectuate the subordination provided in this Article XV and appoints the

Trustee such Securityholder’s attorney-in-fact for any and all such purposes.

SECTION 15.06  Notice by the Company.

The Company shall give

prompt written notice to a Responsible Officer of the Trustee at the Principal

Office of the Trustee of any fact known to the Company that would prohibit the

making of any payment of monies to or by the Trustee in respect of the Debt

Securities pursuant to the provisions of this Article XV. Notwithstanding the

provisions of this Article XV or any other provision of this Indenture or any

Additional Provisions, the Trustee shall not be charged with knowledge of the

existence of any facts that would prohibit the making of any payment of monies to

or by the Trustee in respect of the Debt Securities pursuant to the provisions

of this Article XV, unless and until a Responsible Officer of the Trustee at

the Principal Office of the Trustee shall have received written notice thereof

from the Company or a holder or holders of Senior Indebtedness or from any

trustee therefor; and before the receipt of any such written notice, 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 provided for in this

Section 15.06 at least two Business Days prior to the date upon which by the

terms hereof any money may become payable for any purpose (including, without

limitation, the payment of the principal of (or premium, if any) or interest on

any Debt Security), then, anything herein contained to the contrary

notwithstanding, the Trustee shall have full power and authority to receive

such 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 by

it within two Business Days prior to such date.

 

 

56

 

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 written notice by a Person representing himself

to be a holder of Senior Indebtedness of the Company (or a trustee or

representative on behalf of such holder), to establish that such notice has

been given by a holder of such Senior Indebtedness or a trustee or

representative on behalf of any such holder or holders. In the event that the

Trustee determines in good faith that further evidence is required with respect

to the right of any Person as a holder of such Senior Indebtedness to

participate in any payment or distribution pursuant to this Article XV, the

Trustee may request such Person to furnish evidence to the reasonable

satisfaction of the Trustee as to the amount of such Senior Indebtedness held

by such Person, the extent to which such Person is entitled to participate in

such payment or distribution and any other facts pertinent to the rights of

such Person under this Article XV, and, if such evidence is not furnished, the

Trustee may defer any payment to such Person pending judicial determination as

to the right of such Person to receive such payment.

SECTION 15.07  Rights of the Trustee; Holders of Senior

Indebtedness.

The Trustee in its individual capacity shall be

entitled to all the rights set forth in this Article XV in respect of any

Senior Indebtedness at any time held by it, to the same extent as any other

holder of Senior Indebtedness, and nothing in this Indenture or any Additional

Provisions shall deprive the Trustee of any of its rights as such holder.

With respect to the holders of Senior Indebtedness

of the Company, the Trustee undertakes to perform or to observe only such of

its covenants and obligations as are specifically set forth in this Article XV,

and no implied covenants or obligations with respect to the holders of such

Senior Indebtedness shall be read into this Indenture or any Additional

Provisions against the Trustee. The Trustee shall not owe or be deemed to owe

any fiduciary duty to the holders of such Senior Indebtedness and, subject to

the provisions of Article VI of this Indenture, the Trustee shall not be liable

to any holder of such Senior Indebtedness if it shall pay over or deliver to

Securityholders, the Company or any other Person money or assets to which any

holder of such Senior Indebtedness 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  Subordination May Not Be Impaired.

No right of any present or

future holder of any Senior Indebtedness of the Company to enforce

subordination as herein provided shall at any time in any way be prejudiced or

impaired by any act or failure to act on the part of the Company, or by any act

or failure to act, in good faith, by any such holder, or by any noncompliance

by the Company, with the terms, provisions and covenants of this Indenture,

regardless of any knowledge thereof that any such holder may have or otherwise

be charged with.

 

 

57

 

Without in any way limiting

the generality of the foregoing paragraph, the holders of Senior Indebtedness

of the Company may, at any time and from time to time, without the consent of

or notice to the Trustee or the Securityholders, without incurring

responsibility to the Securityholders and without impairing or releasing the

subordination provided in this Article XV or the obligations hereunder of the

holders of the Debt Securities to the holders of such Senior Indebtedness, do

any one or more of the following: (a) change the manner, place or terms of

payment or extend the time of payment of, or renew or alter, such Senior

Indebtedness, or otherwise amend or supplement in any manner such Senior

Indebtedness or any instrument evidencing the same or any agreement under which

such Senior Indebtedness is outstanding; (b) sell, exchange, release or

otherwise deal with any property pledged, mortgaged or otherwise securing such

Senior Indebtedness; (c) release any Person liable in any manner for the

collection of such Senior Indebtedness; and (d) exercise or refrain from

exercising any rights against the Company, and any other Person.

Wilmington Trust Company, in

its capacity as Trustee, hereby accepts the trusts in this Indenture declared

and provided, upon the terms and conditions herein above set forth.

 

 

58

 

IN WITNESS WHEREOF, the

parties hereto have caused this Indenture to be duly executed by their

respective officers thereunto duly authorized, as of the day and year first

above written.

	

   

  	

  HF FINANCIAL CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   /s/ Curtis L.

  Hage

  
	

   

  	

   

  	

  Curtis L. Hage

  
	

   

  	

   

  	

  Chairman, President and Chief Executive Officer

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  WILMINGTON TRUST COMPANY, as

  
	

   

  	

   

  	

  Trustee

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  

 

 

 

IN WITNESS WHEREOF, the

parties hereto have caused this Indenture to be duly executed by their

respective officers thereunto duly authorized, as of the day and year first

above written.

	

   

  	

  HF FINANCIAL CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

  Curtis L. Hage

  
	

   

  	

   

  	

  Chairman, President and Chief Executive Officer

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  WILMINGTON TRUST COMPANY, as

  
	

   

  	

   

  	

  Trustee

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   /s/ Anita Dallago

  
	

   

  	

   

  	

  Name: Anita Dallago

  
	

   

  	

   

  	

  Title:  Financial Services Officer

  

 

 

EXHIBIT A

FORM OF

FLOATING RATE JUNIOR SUBORDINATED DEBT SECURITY DUE 2031

[FORM

OF FACE OF SECURITY]

THIS SECURITY HAS NOT BEEN

REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),

OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS. NEITHER

THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,

ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE

ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT

SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF

THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE

TRANSFER SUCH SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER

THE SECURITIES ACT (“RULE 144A”), TO A PERSON THE HOLDER REASONABLY BELIEVES IS

A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR

ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE

IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT

TO AN EXEMPTION FROM REGISTRATION TO AN “ACCREDITED INVESTOR” WITHIN THE

MEANING OF SUBPARAGRAPH (a) (l), (2) (3) OR (7) OF RULE 501 UNDER THE

SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE

ACCOUNT OF AN “ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT WITH A

VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION

OF THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE

REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHT

PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C) OR (D) TO

REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER

INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A COPY OF

WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS SECURITY AGREES THAT

IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

THE HOLDER OF THIS SECURITY

BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN

EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT

SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS

AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS

AMENDED (THE “CODE”), (EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS

INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY AND NO

PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR

ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE

EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED

TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-l OR 84-14 OR ANOTHER

APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY IS NOT

PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO

SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY

INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING

THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING

OF SECTION 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 OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT

RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975

OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE

EXEMPTION.

 

 

A-1-1

 

IN CONNECTION WITH ANY

TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH

CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED BY THE INDENTURE TO

CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

THIS SECURITY WILL BE ISSUED

AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A PRINCIPAL AMOUNT OF NOT LESS

THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER

OF THIS SECURITY IN A BLOCK HAVING A PRINCIPAL AMOUNT OF LESS THAN $100,000

SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH

PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY FOR

ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON

THIS SECURITY, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO

INTEREST WHATSOEVER IN THIS SECURITY.

THIS OBLIGATION IS NOT A

DEPOSIT AND IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE

UNITED STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE

“FDIC”). THIS OBLIGATION IS SUBORDINATED TO THE CLAIMS OF DEPOSITORS AND THE

CLAIMS OF GENERAL AND SECURED CREDITORS OF THE COMPANY, IS INELIGIBLE AS COLLATERAL

FOR A LOAN BY THE COMPANY OR ANY OF ITS SUBSIDIARIES AND IS NOT SECURED.

 

 

A-1-2

 

Floating

Rate Junior Subordinated Debt Security due 2031

 

of

 

HF

FINANCIAL CORP.

 

HF

FINANCIAL CORP., a [STATE OF INCORPORATION] corporation (the “Company”), for

value received promises to pay to _________________ (the “Holder”) or

registered assigns, the principal sum of [____________] Dollars ($_________) on

December 8, 2031, and to pay interest on said principal sum from November 28,

2001, or from the most recent interest payment date (each such date, an

“Interest Payment Date”) to which interest has been paid or duly provided for,

semi-annually (subject to deferral as set forth herein) in arrears on June 8th

and December 8th of each year commencing June 8, 2002, at a variable per annum

rate equal to LIBOR (as defined in the Indenture) plus 3.75% (the “Interest

Rate”) (provided, that the applicable Interest Rate may not exceed 11.0%

through the Interest Payment Date in December, 2006) until the principal hereof

shall have become due and payable, and on any overdue principal and (without

duplication and to the extent that payment of such interest is enforceable

under applicable law) on any overdue installment of interest at an annual rate

equal to the Interest Rate in effect for each such Extension Period compounded

semi-annually. The amount of interest payable on any Interest Payment Date

shall be computed on the basis of a 360-day year and the actual number of days

elapsed in the relevant interest period. In the event that any date on which

the principal or interest is payable on this Debt Security is not a Business

Day, then payment payable on such date will be made on the next succeeding day

that is a Business Day (and without any interest or other payment in respect of

any such delay), except that, if such Business Day is in the next succeeding

calendar year, such payment shall be made on the immediately preceding Business

Day, in each case with the same force and effect as if made on such date. The

interest installment so payable, and punctually paid or duly provided for, on

any Interest Payment Date will, as provided in the Indenture, be paid to the

Person in whose name this Debt Security (or one or more Predecessor Securities,

as defined in said Indenture) is registered at the close of business on the

regular record date for such interest installment, except that interest and any

Deferred Interest payable on the Maturity Date shall be paid to the Person to

whom principal is paid. Any such interest installment not punctually paid or

duly provided for shall forthwith cease to be payable to the registered holders

on such regular record date and may be paid to the Person in whose name this

Debt Security (or one or more Predecessor Debt Securities) is registered at the

close of business on a special record date to be fixed by the Trustee for the

payment of such defaulted interest, notice whereof shall be given to the

registered holders of the Debt Securities not less than 10 days prior to such

special record date, all as more fully provided in the Indenture. The principal

of and interest on this Debt Security shall be payable at the office or agency

of the Trustee (or other paying agent appointed by the Company) maintained for

that purpose in any coin or currency of the United States of America that at

the time of payment is legal tender for payment of public and private debts; provided,

however, that payment of interest may be made at the option of the

Company by check mailed to the registered holder at such address as shall

appear in the Debt Security Register or by wire transfer to an account

appropriately designated by the holder hereof. Notwithstanding the foregoing,

so long as the holder of this Debt Security is the Institutional Trustee, the

payment of the principal of and interest on this Debt Security will be made in

immediately available funds at such place and to such account as may be

designated by the Trustee.

 

 

A-1-3

 

So long as no Event of

Default has occurred and is continuing, the Company shall have the right, from

time to time, to defer payments of interest on the Debt Securities by extending

the interest payment period on the Debt Securities at any time and from time to

time during the term of the Debt Securities, for up to 10 consecutive

semi-annual periods (each such extended interest payment period, an “Extension

Period”), during which Extension Period no interest shall be due and payable

(except any Additional Interest that may be due and payable). During any

Extension Period, interest will continue to accrue on the Debt Securities, and

interest on such accrued interest (such accrued interest and interest thereon

referred to herein as “Deferred Interest”) will accrue at the Interest Rate,

compounded semi-annually from the date such Deferred Interest would have been

payable were it not for the Extension Period, both to the extent permitted by

law. No Extension Period may end on a date other than an Interest Payment Date.

At the end of any such Extension Period the Company shall pay all Deferred

Interest then accrued and unpaid on the Debt Securities; provided,

however, that no Extension Period may extend beyond the Maturity Date and provided,

further,  however, during

any such Extension Period, the Company may not (i) declare or pay any dividends

or distributions on, or redeem, purchase, acquire, or make a liquidation

payment with respect to, any of the Company’s capital stock or (ii) make any

payment of principal of or interest or premium, if any, 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 stock of the Company (I) in connection

with any employment contract, benefit plan or other similar arrangement with or

for the benefit of one or more employees, officers, directors or consultants,

(II) in connection with a dividend reinvestment or stockholder stock purchase

plan or (III) in connection with the issuance of capital stock of the Company

(or securities convertible into or exercisable for such capital stock), as

consideration in an acquisition transaction entered into prior to the

applicable Extension Period, (b) as a result of any exchange 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 series of the Company’s capital

stock or of any class or series of the Company’s indebtedness for any class or

series of the Company’s capital stock, (c) the purchase of fractional interests

in shares of the Company’s capital stock pursuant to the conversion or exchange

provisions of such capital stock or the security being converted or exchanged,

(d) any declaration of a dividend in connection with any stockholder’s rights

plan, or the issuance of rights, stock or other property under any

stockholder’s rights plan, or the redemption or repurchase of rights pursuant

thereto, or (e) any dividend in the form of stock, warrants, options or other

rights where the dividend stock or the stock issuable upon exercise of such

warrants, options or other rights is the same stock as that on which the

dividend is being paid or ranks pari passu with

or junior to such stock). Prior to the termination of any Extension Period, the

Company may further extend such period, provided, that such period

together with all such previous and further consecutive extensions thereof

shall not exceed 10 consecutive semi-annual periods, or extend beyond the

Maturity Date. Upon the termination of any Extension Period and upon the

payment of all Deferred Interest, the Company may commence a new Extension

Period, subject to the foregoing requirements. No interest or Deferred Interest

shall be due and payable during an Extension Period, except at the end thereof,

but each installment of interest that would otherwise have been due and payable

during such Extension Period shall bear Deferred Interest. The Company must

give the Trustee notice of its election to begin such Extension Period at least

one Business Day prior to the earlier of (i) the date interest on the Debt

Securities would have been payable except for the election to begin such Extension

Period or (ii) the date such interest is payable, but in any event not later

than the related regular record date.

 

 

A-1-4

 

The indebtedness evidenced by this Debt Security is,

to the extent provided in the Indenture, subordinate and junior in right of

payment to the prior payment in full of all Senior Indebtedness, and this Debt

Security is issued subject to the provisions of the Indenture with respect

thereto. Each holder of this Debt Security, by accepting the same, (a) agrees

to and shall be bound by such provisions, (b) authorizes and directs the

Trustee on such holder’s behalf to take such action as may be necessary or

appropriate to acknowledge or effectuate the subordination so provided and (c)

appoints the Trustee such holder’s attorney-in-fact for any and all such

purposes. Each holder hereof, by such holder’s acceptance hereof, hereby waives

all notice of the acceptance of the subordination provisions contained herein

and in the Indenture by each holder of Senior Indebtedness, whether now

outstanding or hereafter incurred, and waives reliance by each such holder upon

said provisions.

The Company waives demand, presentment for payment,

notice of nonpayment, notice of protest, and all other notices.

This Debt Security shall not be entitled to any

benefit under the Indenture hereinafter referred to, be valid or become

obligatory for any purpose until the certificate of authentication hereon shall

have been signed by or on behalf of the Trustee.

The provisions of this Debt

Security are continued on the reverse side hereof and such continued provisions

shall for all purposes have the same effect as though fully set forth at this

place.

 

 

A-1-5

 

IN

WITNESS WHEREOF, the Company has duly executed this certificate.

 

	

   

  	

   

  	

  HF FINANCIAL CORP.

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

   

  	

  Title:

  

 

 

 

Dated: ____________________

CERTIFICATE OF AUTHENTICATION

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

Indenture.

 

 

	

   

  	

   

  	

  WILMINGTON TRUST COMPANY, not in its individual capacity but solely

  as the Trustee

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

  Authorized Officer

  
	

   

  	

   

  	

   

  	

   

  

 

 

Dated: ____________________

 

 

A-1-6

 

[FORM

OF REVERSE OF SECURITY]

This Debt Security is one of a duly authorized

series of Debt Securities of the Company, all issued or to be issued pursuant

to an Indenture (the “Indenture”) dated as of November 28, 2001, duly executed

and delivered between the Company and Wilmington Trust Company, as Trustee (the

“Trustee”), to which Indenture and all indentures supplemental thereto

reference is hereby made for a description of the rights, limitations of

rights, obligations, duties and immunities thereunder of the Trustee, the

Company and the holders of the Debt Securities (referred to herein as the “Debt

Securities”) of which this Debt Security is a part. The summary of the terms of

this Debt Security contained herein does not purport to be complete and is

qualified by reference to the Indenture.

Upon the occurrence and continuation of a Tax Event,

an Investment Company Event or a Capital Treatment Event, this Debt Security

may become due and payable, in whole but not in part, at any time, within 90

days following the occurrence of such Tax Event, Investment Company Event or

Capital Treatment Event (the “Special Redemption Date”), as the case may be, at

the Special Redemption Price. The Company shall also have the right to redeem

this Debt Security at the option of the Company, in whole or in part, on any

June 8th or December 8th on or after December 8, 2006 (a “Redemption Date”), at

the Redemption Price.

Any redemption pursuant to

the preceding paragraph will be made, subject to the receipt by the Company of

prior approval from the Office of Thrift Supervision (the “OTS”) if then

required under applicable capital guidelines or policies of the OTS, upon not

less than 30 days’ nor more than 60 days’ notice. If the Debt Securities are

only partially redeemed by the Company, the Debt Securities will be redeemed

pro rata or by lot or by any other method utilized by the Trustee.

“Redemption Price” means

100% of the principal amount of the Debt Securities being redeemed plus accrued

and unpaid interest on such Debt Securities to the Redemption Date, or, in the

case of a redemption due to the occurrence of a Special Event, to the Special

Redemption Date if such Special Redemption Date is on or after December 8,

2006.

“Special Redemption Price”

means (1) if the Special Redemption Date is before December 8, 2006, the

greater of (a) 100% of the principal amount of the Debt Securities being

redeemed pursuant to Section 10.02 of the Indenture or (b) as determined by a

Quotation Agent, the sum of the present values of the principal amount payable

as part of the Redemption Price with respect to a redemption as of December 8,

2006, together with the present value of interest payments calculated at a

fixed per annum rate of interest equal to 9.95% over the Remaining Life of such

Debt Securities, discounted to the Special Redemption Date on a semi-annual

basis (assuming a 360-day year consisting of twelve 30-day months) at the

Treasury Rate plus 0.50%, plus, in the case of either (a) or (b), accrued and

unpaid interest on such Debt Securities to the Special Redemption Date and (2)

if the Special Redemption Date is on or after December 8, 2006, the Redemption

Price for such Special Redemption Date.

“Comparable Treasury Issue”

means with respect to any Special Redemption Date the United States Treasury

security selected by the Quotation Agent as having a maturity comparable to the

Remaining Life that would be utilized, at the time of selection and in

accordance with customary financial practice, in pricing new issues of

corporate debt securities of comparable maturity to the Remaining Life. If no

United States Treasury security has a maturity which is within a period from

three months before to three months after December 8, 2006, the two most

closely corresponding United States Treasury securities shall be used as the

Comparable Treasury Issue, and the Treasury Rate shall be interpolated or

extrapolated on a straight-line basis, rounding to the nearest month using such

securities.

 

 

A-1-1

 

“Comparable Treasury Price” means (a) the average of

five Reference Treasury Dealer Quotations for such Special Redemption Date,

after excluding the highest and lowest such Reference Treasury Dealer

Quotations, or (b) if the Trustee receives fewer than five such Reference

Treasury Dealer Quotations, the average of all such Quotations.

“Primary Treasury Dealer” shall mean a primary

United States Government securities dealer in New York City.

“Quotation Agent” means Salomon Smith Barney Inc.

and its successors; provided, however, that if the foregoing shall cease to be

a Primary Treasury Dealer, the Company shall substitute therefor another

Primary Treasury Dealer.

“Reference Treasury Dealer”

means (i) the Quotation Agent and (ii) any other Primary Treasury Dealer

selected by the Trustee after consultation with the Company.

“Reference Treasury Dealer

Quotations” means, with respect to each Reference Treasury Dealer and any

Special Redemption Date, the average, as determined by the Quotation Agent, of

the bid and asked prices for the Comparable Treasury Issue (expressed in each

case as a percentage of its principal amount) quoted in writing to the Trustee

by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the

third Business Day preceding such Special Redemption Date.

“Treasury Rate” means (i)

the yield, under the heading which represents the average for the week

immediately prior to the date of calculation, appearing in the most recently

published statistical release designated H.15 (519) or any successor

publication which is published weekly by the Federal Reserve and which

establishes yields on actively traded United States Treasury securities

adjusted to constant maturity under the caption “Treasury Constant Maturities”,

for the maturity corresponding to the Remaining Life (if no maturity is within

three months before or after the Remaining Life, yields for the two published

maturities most closely corresponding to the Remaining Life shall be determined

and the Treasury Rate shall be interpolated or extrapolated from such yields on

a straight-line basis, rounding to the nearest month) or (ii) if such release

(or any successor release) is not published during the week preceding the

calculation date or does not contain such yields, the rate per annum equal to

the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,

calculated using a price for the Comparable Treasury Issue (expressed as a

percentage of its principal amount) equal to the Comparable Treasury Price for

such Special Redemption Date. The Treasury Rate shall be calculated on the

third Business Day preceding the Special Redemption Date.

 

 

A-1-2

 

In the event of redemption of this Debt Security in

part only, a new Debt Security or Debt Securities for the unredeemed portion

hereof will be issued in the name of the holder hereof upon the cancellation

hereof.

In case an Event of Default, as defined in the

Indenture, shall have occurred and be continuing, the principal of all of the

Debt Securities may be declared due and payable, and upon such declaration of

acceleration shall become due and payable, in the manner, with the effect and

subject to the conditions provided in the Indenture.

The Indenture contains

provisions permitting the Company and the Trustee, with the consent of the

holders of not less than a majority in aggregate principal amount of the Debt

Securities at the time outstanding affected thereby, as specified in the

Indenture, to execute supplemental indentures for the purpose of adding any

provisions to or changing in any manner or eliminating any of the provisions of

the Indenture or of any supplemental indenture or of modifying in any manner

the rights of the holders of the Debt Securities; provided, however,

that no such supplemental indenture shall, among other things, without the

consent of the holders of each Debt Security then outstanding and affected

thereby (i) extend the fixed maturity of the Debt Securities, or reduce the

principal amount thereof or any redemption premium thereon, or reduce the rate

or extend the time of payment of interest thereon, or make the principal of, or

any interest or premium on, the Debt Securities payable in any coin or currency

other than that provided in the Debt Securities, or impair or affect the right

of any holder of Debt Securities to institute suit for the payment thereof, or

(ii) reduce the aforesaid percentage of Debt Securities, the holders of which

are required to consent to any such supplemental indenture. The Indenture also

contains provisions permitting the holders of a majority in aggregate principal

amount of the Debt Securities at the time outstanding, on behalf of all of the

holders of the Debt Securities, to waive any past default in the performance of

any of the covenants contained in the Indenture, or established pursuant to the

Indenture, and its consequences, except a default in the payment of the

principal of or premium, if any, or interest on any of the Debt Securities. Any

such consent or waiver by the registered holder of this Debt Security (unless

revoked as provided in the Indenture) shall be conclusive and binding upon such

holder and upon all future holders and owners of this Debt Security and of any

Debt Security issued in exchange herefor or in place hereof (whether by registration

of transfer or otherwise), irrespective of whether or not any notation of such

consent or waiver is made upon this Debt Security.

No reference herein to the

Indenture and no provision of this Debt Security or of the Indenture shall

alter or impair the obligation of the Company, which is absolute and

unconditional, to pay the principal of and premium, if any, and interest on

this Debt Security at the time and place and at the rate and in the money

herein prescribed.

As provided in the Indenture

and subject to certain limitations herein and therein set forth, this Debt

Security is transferable by the registered holder hereof on the Debt Security

Register of the Company, upon surrender of this Debt Security for registration

of transfer at the office or agency of the Trustee in Wilmington, Delaware

accompanied by a written instrument or instruments of transfer in form

satisfactory to the Company or the Trustee duly executed by the registered

holder hereof or such holder’s attorney duly authorized in writing, and

thereupon one or more new Debt Securities of authorized denominations and for

the same aggregate principal amount will be issued to the designated transferee

or transferees. No service charge will be made for any such registration of

transfer, but the Company may require payment of a sum sufficient to cover any

tax or other governmental charge payable in relation thereto.

 

 

A-1-3

 

Prior to due presentment for registration of

transfer of this Debt Security, the Company, the Trustee, any Authenticating

Agent, any paying agent, any transfer agent and the Debt Security registrar may

deem and treat the registered holder hereof as the absolute owner hereof

(whether or not this Debt Security shall be overdue and notwithstanding any

notice of ownership or writing hereon) for the purpose of receiving payment of

or on account of the principal hereof and interest due hereon and for all other

purposes, and neither the Company nor the Trustee nor any Authenticating Agent

nor any paying agent nor any transfer agent nor any Debt Security registrar

shall be affected by any notice to the contrary.

No recourse shall be had for the payment of the

principal of or the interest on this Debt Security, or for any claim based

hereon, or otherwise in respect hereof, or based on or in respect of the

Indenture, against any incorporator, stockholder, officer or director, past,

present or future, as such, of the Company or of any predecessor or successor

corporation, whether by virtue of any constitution, statute or rule of law, or

by the enforcement of any assessment or penalty or otherwise, all such

liability being, by the acceptance hereof and as part of the consideration for

the issuance hereof, expressly waived and released.

The Debt Securities are issuable only in registered

certificated form without coupons. As provided in the Indenture and subject to

certain limitations herein and therein set forth, Debt Securities are

exchangeable for a like aggregate principal amount of Debt Securities of a

different authorized denomination, as requested by the holder surrendering the

same.

All terms used in this Debt

Security that are defined in the Indenture shall have the meanings assigned to

them in the Indenture.

THE LAW OF THE STATE OF NEW

YORK SHALL GOVERN THE INDENTURE AND THE DEBT SECURITIES, WITHOUT REGARD TO

CONFLICT OF LAWS PRINCIPLES THEREOF.

 

A-1-4

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