Document:

EX10.8

Exhibit 10.8

PROMISSORY NOTE

 

  		
	 $29,532.00 USD

    	June 30th, 2008

    

 

FOR VALUE RECEIVED, GoldCorp Holdings, Co. (hereinafter referred to as the “Maker”), promises to pay to the order of New Vision Financial, Ltd.(“Holder”), or assigns, at Suite#13, Oliaji Trade Center, Francis Rachel Street,  Victoria, Seychelles, or at such other place as the Holder may from time to time designate in writing to the Maker, in lawful money of the United States of America, the principal sum of Twenty Nine Thousands, Five Hundred and Thirty Two US dollars ($29,532.00), at a rate of interest thereon from the date of this Note at Seven percent (7 %) per annum.

Payments of interest shall be made on a yearly basis from the date of this Note until maturity.  This Note shall mature Twenty Four (24) months from the date of this Note, and shall be paid as follows: there shall be a payment of Two Thousands and Sixty Seven US Dollars and Twenty Four Cents ($2,067.24) on June 30th, 2009 and there shall be a final Principal balloon payment made to the Holder of Thirty One Thousands, Five Hundred and Ninety Nine US Dollars and Twenty Four Cents($31,599.24) on or before June 30th, 2010 at which time all principal and accrued interest shall be payable in full.

Any payment of principal or interest on this Note that is not made when due, as herein provided, shall bear interest at the same rate specified above.  In the event any payment is not made within five (5) days of its due date, the Maker shall pay a late charge of five (5%) percent of the amount of the payment, provided that only one (1) such late charge may be collected on any particular payment however long that payment shall remain past due.

The indebtedness evidenced by this Note may be prepaid in whole or in part at any time without penalty or premium after thirty (30) days prior notice to the Holder, during which time the Holder shall be entitled to convert this Note into shares of Common Stock of the Maker as hereinafter provided.

If from any circumstances whatsoever fulfillment of any provision of this Note at the time performance of such provision shall be due shall involve transcending the limit prescribed by any applicable usury statute or any other applicable law, with regard to obligations of like character and amount, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity, so that in no event shall any exaction be possible under this Note or under any other instrument evidencing or securing the indebtedness evidenced hereby, that is in excess of the current limit of such validity, but such obligation shall be fulfilled to the limit of such validity.

Presentment for payment, demand, protest and notice of demand, notice of dishonor and notice of nonpayment and all other notices are hereby waived by Maker.  No failure to accelerate the debt evidenced hereby by reason of default hereunder, acceptance of a past due installment, or indulgences granted from time to time shall be construed (1) as a novation of this Note or as a restatement of the indebtedness evidenced hereby or as a waiver of such right of acceleration orof the right of the Holder thereafter to insist upon strict compliance with the terms of this Note, or (2) to prevent the exercise of such right of acceleration or any other right granted hereunder or by applicable law; and Maker hereby expressly waives the benefit of any statute or rule of law or equity now provided, or which may hereafter be provided, which would produce a result contrary to or in conflict with the foregoing.  No extension of the time for the payment of this Note or any installment due hereunder, made by agreement with any person now or hereafter liable for the payment of this Note shall operate to release, discharge, modify, change or affect the original liability of the Maker under this Note, either in whole or in part, unless the Holder agrees otherwise in writing.  This Note may not be changed orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification or discharge is sought.

 

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Maker hereby waives and renounces for itself, its heirs, successors and assigns, all rights to the benefits of any statute of limitations, any moratorium, reinstatement, marshaling, forbearance, valuation, stay, extension, redemption, appraisement and exemption now provided, or which may hereafter by provided, by the Constitution and laws of the United States of America and of the State of Florida, against the enforcement and collection of the obligations evidenced by this Note except as described above.

This Note shall be convertible at the office of Maker, and at such other place or places, if any, as the Board of Directors of the Maker may designate, into fully paid and non-assessable shares (calculated as to each conversion to the nearest l/100th of a share) of Common Stock of the Maker. The number of shares of Common Stock issuable upon conversion of this Note shall be equal to the amount of principle and interest for which a notice of conversion is sent divided by the Conversion Price in effect at the time of conversion determined as hereinafter provided. The price at which shares of Common Stock shall be delivered upon conversion (the "Conversion Price") shall be initially three cents ($.03) per share of Common Stock; provided, however, that such Conversion Price shall be subject to adjustment from time to time in certain instances as hereinafter provided. No payment or adjustment shall be made in respect of dividends previously declared and paid on the Common Stock upon conversion of part, or all, of  this Note into shares of Common Stock. If the Maker elects to prepay part or all of this Note, such right of conversion shall cease and terminate, as to the portion designated for prepayment, at the close of business on the prepayment date, unless the Maker defaults in the prepayment. Further, if conversion is designated, only the face amount of the Note herein shall be used to calculate the number of shares issued hereunder. No fractional shares of Common Stock will be issued, and instead the number of shares of Common Stock to be issued on conversion of this Note will, to the extent necessary, be rounded up to the nearest whole number of shares.

Before the Holder of this Note shall be entitled to convert the same into Common Stock, the Holder shall surrender this Note to the Maker, duly endorsed to the Maker or in blank, at the office of the Maker or at such other place or places, if any, as the Board of Directors of the Maker has designated, and shall give written notice to the Maker at said office or place that it elects to convert the same and shall state in writing therein the name or names (with addresses) in which it wishes the certificate or certificates for Common Stock to be issued.  The Maker will, as soon as practicable thereafter, issue and deliver at said office or place to such Holder, or to its nominee or nominees, certificates for the number of full shares of Common Stock to which it shall be entitled as aforesaid. This Note shall be deemed to have been converted, as of the close of business, on the date of the surrender of the Note for conversion as provided above, and the person or persons entitled to receive the Common Stock issuable upon conversion shall be treated for all purposes as the record holder or holders of such Common Stock as of the close of business on such date.  In the event part or all of this Note is presented for conversion, the Holder of this Note will be entitled to receive all interest on this Note which has accrued to the date of conversion on that portion of the Note which is converted, which interest will, at the Holder's election, be payable on the next regularly scheduled interest payment date on this Note or converted into shares of Common Stock.

 

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The Conversion Price in effect at any time shall be subject to adjustment as follows: 

(i)

In case the Maker shall (A) declare a dividend on its Common Stock in shares of its capital stock, (B) subdivide its outstanding shares of Common Stock, (C) combine its outstanding shares of Common Stock into a smaller number of shares, or (D) issue by reclassification of its Common Stock (including any such reclassification in connection with a consolidation or merger in which the Maker is the continuing corporation) any shares of its capital stock, the Conversion Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification shall be proportionately adjusted so that if this Note is surrendered for conversion after such time, the Holder shall be entitled to receive the kind and amount of shares of Common Stock which it would have owned or have been entitled to receive had this Note been converted immediately prior to such time. Such adjustment shall be made successively whenever any event listed above shall occur.

(ii)

In case the Maker shall distribute to all holders of its Common Stock (including any such distribution made in connection with a consolidation or merger in which the Maker is the continuing corporation) evidences of its indebtedness or assets (excluding dividends or other distributions paid out of earned surplus), the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution by a fraction of which the numerator shall be the Current Market Price per share of the Common Stock on the date fixed for such determination less the fair market value (as determined by the Board of Directors of the Maker, whose determination shall be conclusive and described in a Board Resolution of the Maker filed with the Transfer Agent) of the portion of the assets or evidences of indebtedness so distributed applicable to one share of Common Stock and the denominator shall be such Current Market Price per share of the Common Stock on the date fixed for such determination, such adjustment to become effective immediately prior to the opening of business of the day following the date fixed for the determination of stockholders entitled to receive such distribution. 

(iii)

For the purpose of any computation under paragraph (ii) above, the "Current Market Price" on any date shall be deemed to be the average of the bid price per share of Common Stock on the business day of the receipt of the monies evidenced by this note. The bid price shall be the one posted on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if it is not listed or admitted to trading on any national securities exchange, the closing bid price as furnished by any member of the National Association of Securities Dealers, Inc., selected from time to time by the Maker for that purpose, or, if no member of the National Association of Securities Dealers, Inc. furnishes a bid or ask price for the Common stock, the book value of the Common Stock as determined from an unaudited balance sheet of the Maker prepared according to generally accepted accounting principles as of a date which is 90 days preceding the date of the conversion.

 

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(iv)

All calculations under this paragraph (6) shall be made to the nearest cent or the nearest l/100th of a share, as the case may be.

(v)

In case of any consolidation or merger of the Maker with or into any other corporation (other than a consolidation or merger in which the Maker is the continuing corporation), or in case of any sale or transfer of all or substantially all of the assets of the Maker, the Holder of this Note shall after such consolidation, merger, sale or transfer have the right to convert this Note into the kind and amount of shares of stock and other securities and property which such holder would have been entitled to receive upon such consolidation, merger, sale or transfer if he had held the Common Stock issuable upon the conversion of this Note immediately prior to such consolidation, merger, sale or transfer.

(vi)

In the event that at any time, as a result of an adjustment made pursuant to paragraph (i) above, the holder of this Note surrendered for conversion shall become entitled to receive any securities other than shares of Common Stock, thereafter the amount of such other securities so receivable upon conversion of this Note shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock contained in paragraphs (i) to (v), inclusive, above, and the provisions of this paragraph (6) with respect to the Common Stock shall apply on like terms to any such other securities.

(vii)

No adjustment in the Conversion Price shall be required unless such adjustment would require a change of at least l% in such price; provided, however, that any adjustments which by reason of this paragraph (vii) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.

Whenever the Conversion Price is adjustable as herein provided, the Maker shall notify the Holder of this Note of the change in the Conversion Price within 30 days of any such change.

The Maker will at all times reserve, keep available and be prepared to issue, free from any preemptive rights, out of its authorized but unissued Common Stock, solely for the purpose of effecting conversion of this Note, the full number of shares of Common Stock then issuable upon the conversion of all outstanding Notes. The Maker shall from time to time, in accordance with the laws of the State of Delaware, endeavor to amend its Articles of Incorporation to increase the authorized amount of its Common Stock if at any time the authorized amount of its Common Stock remaining unissued shall be not sufficient to permit the conversion of this Note and all other securities of the Maker which are convertible into Common Stock. The Maker shall, "if any shares of Common Stock required to be reserved for issuance upon conversion of this Note pursuant to this paragraph require registration with or approval of any governmental authority under any Federal or state law before such shares may be issued upon such conversion, endeavor to cause such shares to be so registered or approved as expeditiously as possible.

 

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The Maker will pay any and all transfer taxes that may be payable in respect of the issue or delivery of shares of Common Stock on conversion of this Note pursuant hereto. The Maker shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue or transfer and delivery of shares of Common Stock in a name other than that in which this Note so converted was originally issued, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Maker the amount of any such tax or has established to the satisfaction of the Maker that such tax has been paid.

In the event that this Note is collected by law or through an attorney at law, or under advice therefrom, the Maker agrees to pay all costs of collection, including reasonable attorneys' fees actually incurred.  This Note shall be governed by the laws of the State of Florida. 

Given under the hand and seal of the undersigned, the date and year indicated above.

DATED this 30th day of June, 2008.

GoldCorp Holdings, Co.

a Delaware corporation

/s/Pierre Quilliam                  

By: Pierre Quilliam, C.E.O

-5-Exhibit 4.1

 

WARRANT
TO PURCHASE COMMON STOCK

 

THE SECURITIES
REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION
STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS.  THIS INSTRUMENT IS ISSUED
SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF A SECURITIES
PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR
REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH THE ISSUER.  THE SECURITIES REPRESENTED BY THIS INSTRUMENT
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID
AGREEMENT.  ANY SALE OR OTHER TRANSFER
NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.

 

WARRANT

to purchase

 

302,419

 

Shares
of Common Stock

 

of HF
Financial Corp.

 

Issue Date:  November 21,
2008

 

1.             Definitions. 
Unless the context otherwise requires, when used herein the following
terms shall have the meanings indicated.

 

“Affiliate” has the meaning ascribed to it in
the Purchase Agreement.

 

“Appraisal Procedure” means a procedure
whereby two independent appraisers, one chosen by the Company and one by the
Original Warrantholder, shall mutually agree upon the determinations then the
subject of appraisal.  Each party shall
deliver a notice to the other appointing its appraiser within 15 days after the
Appraisal Procedure is invoked.  If
within 30 days after appointment of the two appraisers they are unable to agree
upon the amount in question, a third independent appraiser shall be chosen
within 10 days thereafter by the mutual consent of such first two appraisers.  The decision of the third appraiser so
appointed and chosen shall be given within 30 days after the selection of such
third appraiser.  If three appraisers
shall be appointed and the determination of one appraiser is disparate from the
middle determination by more than twice the amount by which the other
determination is disparate from the middle determination, then the
determination of such appraiser shall be excluded, the remaining two determinations
shall be averaged and such average shall be binding and conclusive upon the

 

 

Company and the Original Warrantholder; otherwise, the average of all
three determinations shall be binding upon the Company and the Original
Warrantholder.  The costs of conducting
any Appraisal Procedure shall be borne by the Company.

 

“Board of Directors” means the board of
directors of the Company, including any duly authorized committee thereof

 

“Business Combination” means a merger,
consolidation, statutory share exchange or similar transaction that requires
the approval of the Company’s stockholders.

 

“business day” means any day except Saturday,
Sunday and any day on which banking institutions in the State of New York
generally are authorized or required by law or other governmental actions to
close.

 

“Capital Stock” means (A) with respect to
any Person that is a corporation or company, any and all shares, interests,
participations or other equivalents (however designated) of capital or capital
stock of such Person and (B) with respect to any Person that is not a corporation
or company, any and all partnership or other equity interests of such Person.

 

“Charter” means, with respect to any Person,
its certificate or articles of incorporation, articles of association, or
similar organizational document.

 

“Common Stock” has the meaning ascribed to it
in the Purchase Agreement.

 

“Company” means the Person whose name,
corporate or other organizational form and jurisdiction of organization is set
forth in Item 1 of Schedule A hereto.

 

“conversion” has the meaning set forth in Section 13(B).

 

“convertible securities” has the meaning set
forth in Section 13(B).

 

“CPP” has the meaning ascribed to it in the
Purchase Agreement.

 

“Exchange Act” means the Securities Exchange
Act of 1934, as amended, or any successor statute, and the rules and
regulations promulgated thereunder.

 

“Exercise Price” means the amount set forth in
Item 2 of Schedule A hereto.

 

“Expiration Time” has the meaning set forth in
Section 3.

 

“Fair Market Value” means, with respect to any
security or other property, the fair market value of such security or other
property as determined by the Board of Directors, acting in good faith or, with
respect to Section 14, as determined by the Original Warrantholder acting
in good faith.  For so long as the
Original Warrantholder holds this Warrant or any portion thereof, it may object
in writing to the Board of Director’s calculation of fair market value within
10 days of receipt of written notice thereof. 
If the Original Warrantholder and the Company are unable to agree on
fair market value during the 10-day period following the delivery of the
Original Warrantholder’s objection, the Appraisal Procedure may be invoked by
either party to

 

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determine Fair Market Value by delivering written notification thereof
not later than the 30th day after delivery of the Original
Warrantholder’s objection.

 

“Governmental Entities” has the meaning
ascribed to it in the Purchase Agreement.

 

“Initial Number” has the meaning set forth in Section 13(B).

 

“Issue Date” means the date set forth in Item
3 of Schedule A hereto.

 

“Market Price” means, with respect to a
particular security, on any given day, the last reported sale price regular way
or, in case no such reported sale takes place on such day, the average of the
last closing bid and ask prices regular way, in either case on the principal
national securities exchange on which the applicable securities are listed or
admitted to trading, or if not listed or admitted to trading on any national
securities exchange, the average of the closing bid and ask prices as furnished
by two members of the Financial Industry Regulatory Authority, Inc.
selected from time to time by the Company for that purpose.  “Market Price” shall be determined without reference
to after hours or extended hours trading. 
If such security is not listed and traded in a manner that the
quotations referred to above are available for the period required hereunder,
the Market Price per share of Common Stock shall be deemed to be (i) in
the event that any portion of the Warrant is held by the Original
Warrantholder, the fair market value per share of such security as determined
in good faith by the Original Warrantholder or (ii) in all other
circumstances, the fair market value per share of such security as determined
in good faith by the Board of Directors in reliance on an opinion of a
nationally recognized independent investment banking corporation retained by
the Company for this purpose and certified in a resolution to the Warrantholder.  For the purposes of determining the Market
Price of the Common Stock on the “trading day” preceding, on or following the
occurrence of an event, (i) that trading day shall be deemed to commence
immediately after the regular scheduled closing time of trading on the New York
Stock Exchange or, if trading is closed at an earlier time, such earlier time
and (ii) that trading day shall end at the next regular scheduled closing
time, or if trading is closed at an earlier time, such earlier time (for the
avoidance of doubt, and as an example, if the Market Price is to be determined
as of the last trading day preceding a specified event and the closing time of
trading on a particular day is 4:00 p.m. and the specified event occurs at
5:00 p.m. on that day, the Market Price would be determined by reference
to such 4:00 p.m. closing price).

 

“Ordinary Cash Dividends” means a regular
quarterly cash dividend on shares of Common Stock out of surplus or net profits
legally available therefor (determined in accordance with generally accepted
accounting principles in effect from time to time), provided that Ordinary Cash Dividends shall not include any
cash dividends paid subsequent to the Issue Date to the extent the aggregate
per share dividends paid on the outstanding Common Stock in any quarter exceed
the amount set forth in Item 4 of Schedule A hereto, as adjusted for any stock
split, stock dividend, reverse stock split, reclassification or similar
transaction.

 

“Original Warrantholder” means the United States
Department of the Treasury. Any actions specified to be taken by the Original
Warrantholder hereunder may only be taken by such Person and not by any other
Warrantholder.

 

3

 

“Permitted Transactions” has the meaning set
forth in Section 13(B).

 

“Person” has the meaning given to it in Section 3(a)(9) of
the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the
Exchange Act.

 

“Per Share Fair Market Value” has the meaning
set forth in Section 13(C).

 

“Preferred Shares” means the perpetual
preferred stock issued to the Original Warrantholder on the Issue Date pursuant
to the Purchase Agreement.

 

“Pro Rata Repurchases” means any purchase of
shares of Common Stock by the Company or any Affiliate thereof pursuant to (A) any
tender offer or exchange offer subject to Section 13(e) or 14(e) of
the Exchange Act or Regulation 14E promulgated thereunder or (B) any other
offer available to substantially all holders of Common Stock, in the case of
both (A) or (B), whether for cash, shares of Capital Stock of the Company,
other securities of the Company, evidences of indebtedness of the Company or
any other Person or any other property (including, without limitation, shares
of Capital Stock, other securities or evidences of indebtedness of a
subsidiary), or any combination thereof, effected while this Warrant is
outstanding.  The “Effective Date” of a Pro Rata Repurchase
shall mean the date of acceptance of shares for purchase or exchange by the
Company under any tender or exchange offer which is a Pro Rata Repurchase or
the date of purchase with respect to any Pro Rata Repurchase that is not a
tender or exchange offer.

 

“Purchase Agreement” means the Securities
Purchase Agreement - Standard Terms incorporated into the Letter Agreement,
dated as of the date set forth in Item 5 of Schedule A hereto, as amended from
time to time, between the Company and the United States Department of the
Treasury (the “Letter Agreement”),  including all annexes and
schedules thereto.

 

“Qualified Equity Offering” has the meaning
ascribed to it in the Purchase Agreement.

 

“Regulatory Approvals” with respect to the
Warrantholder, means, to the extent applicable and required to permit the
Warrantholder to exercise this Warrant for shares of Common Stock and to own
such Common Stock without the Warrantholder being in violation of applicable
law, rule or regulation, the receipt of any necessary approvals and
authorizations of, filings and registrations with, notifications to, or
expiration or termination of any applicable waiting period under, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and
regulations thereunder.

 

“SEC” means the U.S. Securities and Exchange
Commission.

 

“Securities Act” means the Securities Act of
1933, as amended, or any successor statute, and the rules and regulations
promulgated thereunder.

 

“Shares” has the meaning set forth in Section 2.

 

4

 

“trading day” means (A) if the shares of
Common Stock are not traded on any national or regional securities exchange or
association or over-the-counter market, a business day or (B) if the
shares of Common Stock are traded on any national or regional securities
exchange or association or over-the-counter market, a business day on which
such relevant exchange or quotation system is scheduled to be open for business
and on which the shares of Common Stock (i) are not suspended from trading
on any national or regional securities exchange or association or
over-the-counter market for any period or periods aggregating one half hour or
longer; and (ii) have traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
primary market for the trading of the shares of Common Stock.

 

“U.S. GAAP” means United States generally
accepted accounting principles.

 

“Warrantholder” has the meaning set forth in Section 2.

 

“Warrant” means this Warrant, issued pursuant
to the Purchase Agreement.

 

2.             Number of Shares; Exercise Price.  This certifies that, for value received, the
United States Department of the Treasury or its permitted assigns (the “Warrantholder”) is entitled, upon the
terms and subject to the conditions hereinafter set forth, to acquire from the
Company, in whole or in part, after the receipt of all applicable Regulatory
Approvals, if any, up to an aggregate of the number of fully paid and
nonassessable shares of Common Stock set forth in Item 6 of Schedule A hereto,
at a purchase price per share of Common Stock equal to the Exercise Price.  The number of shares of Common Stock (the “Shares”) and the Exercise Price are
subject to adjustment as provided herein, and all references to “Common Stock,”
“Shares” and “Exercise Price” herein shall be deemed to include any such
adjustment or series of adjustments.

 

3.             Exercise of Warrant; Term.  Subject to Section 2, to the extent
permitted by applicable laws and regulations, the right to purchase the Shares
represented by this Warrant is exercisable, in whole or in part by the
Warrantholder, at any time or from time to time after the execution and
delivery of this Warrant by the Company on the date hereof, but in no event
later than 5:00 p.m., New York City time on the tenth anniversary of the
Issue Date (the “Expiration Time”),  by (A) the surrender of this
Warrant and Notice of Exercise annexed hereto, duly completed and executed on
behalf of the Warrantholder, at the principal executive office of the Company
located at the address set forth in Item 7 of Schedule A hereto (or such other
office or agency of the Company in the United States as it may designate by
notice in writing to the Warrantholder at the address of the Warrantholder
appearing on the books of the Company), and (B) payment of the Exercise Price
for the Shares thereby purchased:

 

(i)  by having the
Company withhold, from the shares of Common Stock that would otherwise be
delivered to the Warrantholder upon such exercise, shares of Common stock
issuable upon exercise of the Warrant equal in value to the aggregate Exercise
Price as to which this Warrant is so exercised based on the Market Price of the
Common Stock on the trading day on which this Warrant is exercised and the
Notice of Exercise is delivered to the Company pursuant to this Section 3,
or

 

5

 

(ii)  with the
consent of both the Company and the Warrantholder, by tendering in cash, by
certified or cashier’s check payable to the order of the Company, or by wire
transfer of immediately available funds to an account designated by the
Company.

 

If the
Warrantholder does not exercise this Warrant in its entirety, the Warrantholder
will be entitled to receive from the Company within a reasonable time, and in
any event not exceeding three business days, a new warrant in substantially
identical form for the purchase of that number of Shares equal to the
difference between the number of Shares subject to this Warrant and the number
of Shares as to which this Warrant is so exercised.  Notwithstanding anything in this Warrant to
the contrary, the Warrantholder hereby acknowledges and agrees that its
exercise of this Warrant for Shares is subject to the condition that the
Warrantholder will have first received any applicable Regulatory Approvals.

 

4.             Issuance of Shares; Authorization; Listing.  Certificates for Shares issued upon exercise
of this Warrant will be issued in such name or names as the Warrantholder may
designate and will be delivered to such named Person or Persons within a
reasonable time, not to exceed three business days after the date on which this
Warrant has been duly exercised in accordance with the terms of this
Warrant.  The Company hereby represents
and warrants that any Shares issued upon the exercise of this Warrant in
accordance with the provisions of Section 3 will be duly and validly
authorized and issued, fully paid and nonassessable and free from all taxes,
liens and charges (other than liens or charges created by the Warrantholder,
income and franchise taxes incurred in connection with the exercise of the
Warrant or taxes in respect of any transfer occurring contemporaneously
therewith).  The Company agrees that the
Shares so issued will be deemed to have been issued to the Warrantholder as of
the close of business on the date on which this Warrant and payment of the
Exercise Price are delivered to the Company in accordance with the terms of
this Warrant, notwithstanding that the stock transfer books of the Company may
then be closed or certificates representing such Shares may not be actually
delivered on such date.  The Company will
at all times reserve and keep available, out of its authorized but unissued
Common Stock, solely for the purpose of providing for the exercise of this
Warrant, the aggregate number of shares of Common Stock then issuable upon
exercise of this Warrant at any time. 
The Company will (A) procure, at its sole expense, the listing of
the Shares issuable upon exercise of this Warrant at any time, subject to
issuance or notice of issuance, on all principal stock exchanges on which the
Common Stock is then listed or traded and (B) maintain such listings of
such Shares at all times after issuance. 
The Company will use reasonable best efforts to ensure that the Shares
may be issued without violation of any applicable law or regulation or of any
requirement of any securities exchange on which the Shares are listed or
traded.

 

5.             No Fractional Shares or Scrip.  No fractional Shares or scrip representing
fractional Shares shall be issued upon any exercise of this Warrant.  In lieu of any fractional Share to which the
Warrantholder would otherwise be entitled, the Warrantholder shall be entitled
to receive a cash payment equal to the Market Price of the Common Stock on the
last trading day preceding the date of exercise less the pro-rated Exercise
Price for such fractional share.

 

6

 

6.             No
Rights as Stockholders; Transfer Books. 
This Warrant does not entitle the Warrantholder to any voting rights or
other rights as a stockholder of the Company prior to the date of exercise
hereof.  The Company will at no time
close its transfer books against transfer of this Warrant in any manner which
interferes with the timely exercise of this Warrant.

 

7.             Charges, Taxes and Expenses.  Issuance of certificates for Shares to the
Warrantholder upon the exercise of this Warrant shall be made without charge to
the Warrantholder for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificates, all of which taxes and expenses
shall be paid by the Company.

 

8.             Transfer/Assignment.

 

(A)          Subject to compliance with clause (B) of
this Section 8, this Warrant and all rights hereunder are transferable, in
whole or in part, upon the books of the Company by the registered holder hereof
in person or by duly authorized attorney, and a new warrant shall be made and
delivered by the Company, of the same tenor and date as this Warrant but
registered in the name of one or more transferees, upon surrender of this Warrant,
duly endorsed, to the office or agency of the Company described in Section 3.  All expenses (other than stock transfer
taxes) and other charges payable in connection with the preparation, execution
and delivery of the new warrants pursuant to this Section 8 shall be paid
by the Company.

 

(B)           The transfer of the Warrant and the
Shares issued upon exercise of the Warrant are subject to the restrictions set
forth in Section 4.4 of the Purchase Agreement.  If and for so long as required by the
Purchase Agreement, this Warrant shall contain the legends as set forth in
Sections 4.2(a) and 4.2(b) of the Purchase Agreement.

 

9.             Exchange and Registry of Warrant.  This Warrant is exchangeable, upon the
surrender hereof by the Warrantholder to the Company, for a new warrant or
warrants of like tenor and representing the right to purchase the same
aggregate number of Shares.  The Company
shall maintain a registry showing the name and address of the Warrantholder as
the registered holder of this Warrant. 
This Warrant may be surrendered for exchange or exercise in accordance
with its terms, at the office of the Company, and the Company shall be entitled
to rely in all respects, prior to written notice to the contrary, upon such
registry.

 

10.           Loss, Theft, Destruction or
Mutilation of Warrant.  Upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in the case of any such loss,
theft or destruction, upon receipt of a bond, indemnity or security reasonably
satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company shall make and deliver,
in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of
like tenor and representing the right to purchase the same aggregate number of
Shares as provided for in such lost, stolen, destroyed or mutilated Warrant.

 

11.           Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking
of any action or the expiration of any right required or granted herein shall
not be a business day, then such action may be taken or such right may be
exercised on the next succeeding day that is a business day.

 

7

 

12.           Rule 144 Information.  The Company covenants that it will use its
reasonable best efforts to timely file all reports and other documents required
to be filed by it under the Securities Act and the Exchange Act and the rules and
regulations promulgated by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any Warrantholder,
make publicly available such information as necessary to permit sales pursuant
to Rule 144 under the Securities Act), and it will use reasonable best
efforts to take such further action as any Warrantholder may reasonably
request, in each case to the extent required from time to time to enable such
holder to, if permitted by the terms of this Warrant and the Purchase
Agreement, sell this Warrant without registration under the Securities Act
within the limitation of the exemptions provided by (A) Rule 144
under the Securities Act, as such rule may be amended from time to time,
or (B) any successor rule or regulation hereafter adopted by the
SEC.  Upon the written request of any
Warrantholder, the Company will deliver to such Warrantholder a written
statement that it has complied with such requirements.

 

13.           Adjustments and Other Rights.  The Exercise Price and the number of Shares
issuable upon exercise of this Warrant shall be subject to adjustment from time
to time as follows; provided, that
if more than one subsection of this Section 13 is applicable to a single
event, the subsection shall be applied that produces the largest adjustment and
no single event shall cause an adjustment under more than one subsection of
this Section 13 so as to result in duplication:

 

(A)          Stock Splits, Subdivisions,
Reclassifications or Combinations. 
If the Company shall (i) declare and pay a dividend or make a
distribution on its Common Stock in shares of Common Stock, (ii) subdivide
or reclassify the outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify the outstanding shares of Common
Stock into a smaller number of shares, the number of Shares issuable upon
exercise of this Warrant at the time of the record date for such dividend or
distribution or the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that the Warrantholder
after such date shall be entitled to purchase the number of shares of Common
Stock which such holder would have owned or been entitled to receive in respect
of the shares of Common Stock subject to this Warrant after such date had this
Warrant been exercised immediately prior to such date.  In such event, the Exercise Price in effect
at the time of the record date for such dividend or distribution or the
effective date of such subdivision, combination or reclassification shall be
adjusted to the number obtained by dividing (x) the product of (1) the
number of Shares issuable upon the exercise of this Warrant before such
adjustment and (2) the Exercise Price in effect immediately prior to the
record or effective date, as the case may be, for the dividend, distribution,
subdivision, combination or reclassification giving rise to this adjustment by (y) the
new number of Shares issuable upon exercise of the Warrant determined pursuant
to the immediately preceding sentence.

 

(B)           Certain Issuances of Common Shares
or Convertible Securities.  Until the
earlier of (i) the date on which the Original Warrantholder no longer
holds this Warrant or any portion thereof and (ii) the third anniversary
of the Issue Date, if the Company shall issue shares of Common Stock (or rights
or warrants or other securities exercisable or convertible into or exchangeable
(collectively, a “conversion”)  for shares of Common Stock) (collectively, “convertible
securities”)  (other
than in Permitted Transactions (as defined below) or a transaction to which
subsection (A) of this Section 13 is applicable) without
consideration or at a 

 

8

 

consideration per share (or having a conversion price
per share) that is less than 90% of the Market Price on the last trading day
preceding the date of the agreement on pricing such shares (or such convertible
securities) then, in such event:

 

(A)          the number of Shares issuable upon the exercise of this
Warrant immediately prior to the date of the agreement on pricing of such
shares (or of such convertible securities) (the “Initial Number”)  shall be increased to the number
obtained by multiplying the Initial Number by a fraction (A) the numerator
of which shall be the sum of (x) the number of shares of Common Stock of
the Company outstanding on such date and (y) the number of additional
shares of Common Stock issued (or into which convertible securities may be
exercised or convert) and (B) the denominator of which shall be the sum of
(I) the number of shares of Common Stock outstanding on such date and (II) the
number of shares of Common Stock which the aggregate consideration receivable
by the Company for the total number of shares of Common Stock so issued (or
into which convertible securities may be exercised or convert) would purchase
at the Market Price on the last trading day preceding the date of the agreement
on pricing such shares (or such convertible securities); and

 

(B)           the Exercise Price payable upon exercise of the Warrant
shall be adjusted by multiplying such Exercise Price in effect immediately
prior to the date of the agreement on pricing of such shares (or of such
convertible securities) by a fraction, the numerator of which shall be the
number of shares of Common Stock issuable upon exercise of this Warrant prior
to such date and the denominator of which shall be the number of shares of
Common Stock issuable upon exercise of this Warrant immediately after the
adjustment described in clause (A) above.

 

For purposes
of the foregoing, the aggregate consideration receivable by the Company in
connection with the issuance of such shares of Common Stock or convertible
securities shall be deemed to be equal to the sum of the net offering price
(including the Fair Market Value of any non-cash consideration and after
deduction of any related expenses payable to third parties) of all such
securities plus the minimum aggregate amount, if any, payable upon exercise or
conversion of any such convertible securities into shares of Common Stock; and “Permitted
Transactions”  shall
mean issuances (i) as consideration for or to fund the acquisition of
businesses and/or related assets, (ii) in connection with employee benefit
plans and compensation related arrangements in the ordinary course and
consistent with past practice approved by the Board of Directors, (iii) in
connection with a public or broadly marketed offering and sale of Common Stock
or convertible securities for cash conducted by the Company or its affiliates
pursuant to registration under the Securities Act or Rule 144A thereunder
on a basis consistent with capital raising transactions by comparable financial
institutions and (iv) in connection with the exercise of preemptive rights
on terms existing as of the Issue Date. Any adjustment made pursuant to this Section 13(B) shall
become effective immediately upon the date of such issuance.

 

9

 

(C)           Other
Distributions.  In case the Company
shall fix a record date for the making of a distribution to all holders of shares
of its Common Stock of securities, evidences of indebtedness, assets, cash,
rights or warrants (excluding Ordinary Cash Dividends, dividends of its Common
Stock and other dividends or distributions referred to in Section 13(A)),
in each such case, the Exercise Price in effect prior to such record date shall
be reduced immediately thereafter to the price determined by multiplying the
Exercise Price in effect immediately prior to the reduction by the quotient of (x) the
Market Price of the Common Stock on the last trading day preceding the first
date on which the Common Stock trades regular way on the principal national
securities exchange on which the Common Stock is listed or admitted to trading
without the right to receive such distribution, minus the amount of cash and/or
the Fair Market Value of the securities, evidences of indebtedness, assets,
rights or warrants to be so distributed in respect of one share of Common Stock
(such amount and/or Fair Market Value, the “Per Share Fair Market Value”)  divided by (y) such Market
Price on such date specified in clause (x); such adjustment shall be made
successively whenever such a record date is fixed. In such event, the number of
Shares issuable upon the exercise of this Warrant shall be increased to the number
obtained by dividing (x) the product of (1) the number of Shares
issuable upon the exercise of this Warrant before such adjustment, and (2) the
Exercise Price in effect immediately prior to the distribution giving rise to
this adjustment by (y) the new Exercise Price determined in accordance
with the immediately preceding sentence. In the case of adjustment for a cash
dividend that is, or is coincident with, a regular quarterly cash dividend, the
Per Share Fair Market Value would be reduced by the per share amount of the
portion of the cash dividend that would constitute an Ordinary Cash Dividend.
In the event that such distribution is not so made, the Exercise Price and the
number of Shares issuable upon exercise of this Warrant then in effect shall be
readjusted, effective as of the date when the Board of Directors determines not
to distribute such shares, evidences of indebtedness, assets, rights, cash or
warrants, as the case may be, to the Exercise Price that would then be in
effect and the number of Shares that would then be issuable upon exercise of
this Warrant if such record date had not been fixed.

 

(D)          Certain Repurchases of Common Stock.  In case the Company effects a Pro Rata
Repurchase of Common Stock, then the Exercise Price shall be reduced to the
price determined by multiplying the Exercise Price in effect immediately prior
to the Effective Date of such Pro Rata Repurchase by a fraction of which the
numerator shall be (i) the product of (x) the number of shares of
Common Stock outstanding immediately before such Pro Rata Repurchase and (y) the
Market Price of a share of Common Stock on the trading day immediately
preceding the first public announcement by the Company or any of its Affiliates
of the intent to effect such Pro Rata Repurchase, minus (ii) the aggregate
purchase price of the Pro Rata Repurchase, and of which the denominator shall
be the product of (i) the number of shares of Common Stock outstanding
immediately prior to such Pro Rata Repurchase minus the number of shares of
Common Stock so repurchased and (ii) the Market Price per share of Common
Stock on the trading day immediately preceding the first public announcement by
the Company or any of its Affiliates of the intent to effect such Pro Rata
Repurchase.  In such event, the number of
shares of Common Stock issuable upon the exercise of this Warrant shall be
increased to the number obtained by dividing (x) the product of (1) the
number of Shares issuable upon the exercise of this Warrant before such
adjustment, and (2) the Exercise Price in effect immediately prior to the
Pro Rata Repurchase giving rise to this adjustment by (y) the new Exercise
Price determined in accordance with the immediately preceding sentence.  For the avoidance of doubt, no increase to

 

10

 

the Exercise Price or decrease in the number of Shares
issuable upon exercise of this Warrant shall be made pursuant to this Section 13(D).

 

(E)           Business Combinations.  In case of any Business Combination or
reclassification of Common Stock (other than a reclassification of Common Stock
referred to in Section 13(A)), the Warrantholder’s right to receive Shares
upon exercise of this Warrant shall be converted into the right to exercise
this Warrant to acquire the number of shares of stock or other securities or
property (including cash) which the Common Stock issuable (at the time of such
Business Combination or reclassification) upon exercise of this Warrant
immediately prior to such Business Combination or reclassification would have
been entitled to receive upon consummation of such Business Combination or
reclassification; and in any such case, if necessary, the provisions set forth
herein with respect to the rights and interests thereafter of the Warrantholder
shall be appropriately adjusted so as to be applicable, as nearly as may
reasonably be, to the Warrantholder’s right to exercise this Warrant in
exchange for any shares of stock or other securities or property pursuant to
this paragraph.  In determining the kind
and amount of stock, securities or the property receivable upon exercise of
this Warrant following the consummation of such Business Combination, if the
holders of Common Stock have the right to elect the kind or amount of
consideration receivable upon consummation of such Business Combination, then
the consideration that the Warrantholder shall be entitled to receive upon
exercise shall be deemed to be the types and amounts of consideration received
by the majority of all holders of the shares of common stock that affirmatively
make an election (or of all such holders if none make an election).

 

(F)           Rounding of Calculations; Minimum
Adjustments.  All calculations under
this Section 13 shall be made to the nearest one-tenth (1/10th) of a cent
or to the nearest one- hundredth (1/100th) of a share, as the case may be.  Any provision of this Section 13 to the
contrary notwithstanding, no adjustment in the Exercise Price or the number of
Shares into which this Warrant is exercisable shall be made if the amount of
such adjustment would be less than $0.01 or one-tenth (1/10th) of a share of
Common Stock, but any such amount shall be carried forward and an adjustment
with respect thereto shall be made at the time of and together with any
subsequent adjustment which, together with such amount and any other amount or
amounts so carried forward, shall aggregate $0.01 or 1/10th of a share of
Common Stock, or more.

 

(G)           Timing of Issuance of Additional
Common Stock Upon Certain Adjustments. 
In any case in which the provisions of this Section 13 shall
require that an adjustment shall become effective immediately after a record
date for an event, the Company may defer until the occurrence of such event (i) issuing
to the Warrantholder of this Warrant exercised after such record date and
before the occurrence of such event the additional shares of Common Stock
issuable upon such exercise by reason of the adjustment required by such event
over and above the shares of Common Stock issuable upon such exercise before
giving effect to such adjustment and (ii) paying to such Warrantholder any
amount of cash in lieu of a fractional share of Common Stock; provided, however,  that the Company upon request
shall deliver to such Warrantholder a due bill or other appropriate instrument
evidencing such Warrantholder’s right to receive such additional shares, and
such cash, upon the occurrence of the event requiring such adjustment.

 

11

 

(H)          Completion of Qualified Equity
Offering.  In the event the Company
(or any successor by Business Combination) completes one or more Qualified
Equity Offerings on or prior to December 31, 2009 that result in the
Company (or any such successor) receiving aggregate gross proceeds of not less
than 100% of the aggregate liquidation preference of the Preferred Shares (and
any preferred stock issued by any such successor to the Original Warrantholder
under the CPP), the number of shares of Common Stock underlying the portion of
this Warrant then held by the Original Warrantholder shall be thereafter reduced
by a number of shares of Common Stock equal to the product of (i) 0.5 and (ii) the
number of shares underlying the Warrant on the Issue Date (adjusted to take
into account all other theretofore made adjustments pursuant to this Section 13).

 

(I)            Other Events.  For so long as the Original Warrantholder
holds this Warrant or any portion thereof, if any event occurs as to which the
provisions of this Section 13 are not strictly applicable or, if strictly
applicable, would not, in the good faith judgment of the Board of Directors of
the Company, fairly and adequately protect the purchase rights of the Warrants
in accordance with the essential intent and principles of such provisions, then
the Board of Directors shall make such adjustments in the application of such
provisions, in accordance with such essential intent and principles, as shall
be reasonably necessary, in the good faith opinion of the Board of Directors,
to protect such purchase rights as aforesaid. 
The Exercise Price or the number of Shares into which this Warrant is
exercisable shall not be adjusted in the event of a change in the par value of
the Common Stock or a change in the jurisdiction of incorporation of the
Company.

 

(J)            Statement Regarding Adjustments.  Whenever the Exercise Price or the number of
Shares into which this Warrant is exercisable shall be adjusted as provided in Section 13,
the Company shall forthwith file at the principal office of the Company a
statement showing in reasonable detail the facts requiring such adjustment and
the Exercise Price that shall be in effect and the number of Shares into which
this Warrant shall be exercisable after such adjustment, and the Company shall
also cause a copy of such statement to be sent by mail, first class postage
prepaid, to each Warrantholder at the address appearing in the Company’s
records.

 

(K)          Notice of Adjustment Event.  In the event that the Company shall propose
to take any action of the type described in this Section 13 (but only if
the action of the type described in this Section 13 would result in an
adjustment in the Exercise Price or the number of Shares into which this
Warrant is exercisable or a change in the type of securities or property to be
delivered upon exercise of this Warrant), the Company shall give notice to the
Warrantholder, in the manner set forth in Section 13(J), which notice
shall specify the record date, if any, with respect to any such action and the
approximate date on which such action is to take place.  Such notice shall also set forth the facts with
respect thereto as shall be reasonably necessary to indicate the effect on the
Exercise Price and the number, kind or class of shares or other securities or
property which shall be deliverable upon exercise of this Warrant.  In the case of any action which would require
the fixing of a record date, such notice shall be given at least 10 days prior
to the date so fixed, and in case of all other action, such notice shall be
given at least 15 days prior to the taking of such proposed action.  Failure to give such notice, or any defect
therein, shall not affect the legality or validity of any such action.

 

12

 

(L)           Proceedings Prior to Any Action
Requiring Adjustment.  As a condition
precedent to the taking of any action which would require an adjustment
pursuant to this Section 13, the Company shall take any action which may
be necessary, including obtaining regulatory, New York Stock Exchange or NASDAQ
Stock Market or other applicable national securities exchange or stockholder
approvals or exemptions, in order that the Company may thereafter validly and
legally issue as fully paid and nonassessable all shares of Common Stock that
the Warrantholder is entitled to receive upon exercise of this Warrant pursuant
to this Section 13.

 

(M)         Adjustment Rules.  Any adjustments pursuant to this Section 13
shall be made successively whenever an event referred to herein shall
occur.  If an adjustment in Exercise
Price made hereunder would reduce the Exercise Price to an amount below par
value of the Common Stock, then such adjustment in Exercise Price made
hereunder shall reduce the Exercise Price to the par value of the Common Stock.

 

14.           Exchange.  At any time following the date on which the
shares of Common Stock of the Company are no longer listed or admitted to
trading on a national securities exchange (other than in connection with any
Business Combination), the Original Warrantholder may cause the Company to
exchange all or a portion of this Warrant for an economic interest (to be
determined by the Original Warrantholder after consultation with the Company)
of the Company classified as permanent equity under U.S. GAAP having a value
equal to the Fair Market Value of the portion of the Warrant so exchanged.  The Original Warrantholder shall calculate
any Fair Market Value required to be calculated pursuant to this Section 14,
which shall not be subject to the Appraisal Procedure.

 

15.           No Impairment.  The Company will not, by amendment of its
Charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of this Warrant and in
taking of all such action as may be necessary or appropriate in order to
protect the rights of the Warrantholder.

 

16.           Governing Law.  This Warrant will be
governed by and construed in accordance with the federal law of the United
States if and to the extent such law is applicable, and otherwise in accordance
with the laws of the State of New York applicable to contracts made and to be
performed entirely within such State. 
Each of the Company and the Warrantholder agrees (a) to submit to
the exclusive jurisdiction and venue of the United States District Court for
the District of Columbia for any civil action, suit or proceeding arising out
of or relating to this Warrant or the transactions contemplated hereby, and (b) that
notice may be served upon the Company at the address in Section 20 below
and upon the Warrantholder at the address for the Warrantholder set forth in
the registry maintained by the Company pursuant to Section 9 hereof.  To the extent permitted by applicable law,
each of the Company and the Warrantholder hereby unconditionally waives trial
by jury in any civil legal action or proceeding relating to the Warrant or the
transactions contemplated hereby or thereby.

 

17.           Binding Effect.  This Warrant shall be binding upon any
successors or assigns of the Company.

 

13

 

18.           Amendments.  This Warrant may be amended and the
observance of any term of this Warrant may be waived only with the written
consent of the Company and the Warrantholder.

 

19.           Prohibited Actions.  The Company agrees that it will not take any
action which would entitle the Warrantholder to an adjustment of the Exercise
Price if the total number of shares of Common Stock issuable after such action
upon exercise of this Warrant, together with all shares of Common Stock then
outstanding and all shares of Common Stock then issuable upon the exercise of
all outstanding options, warrants, conversion and other rights, would exceed
the total number of shares of Common Stock then authorized by its Charter.

 

20.           Notices. Any notice, request,
instruction or other document to be given hereunder by any party to the other
will be in writing and will be deemed to have been duly given (a) on the
date of delivery if delivered personally, or by facsimile, upon confirmation of
receipt, or (b) on the second business day following the date of dispatch
if delivered by a recognized next day courier service. All notices hereunder
shall be delivered as set forth in Item 8 of Schedule A hereto, or pursuant to
such other instructions as may be designated in writing by the party to receive
such notice.

 

21.           Entire Agreement. This
Warrant, the forms attached hereto and Schedule A hereto (the terms of which
are incorporated by reference herein), and the Letter Agreement (including all
documents incorporated therein), contain the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior and
contemporaneous arrangements or undertakings with respect thereto.

 

[Remainder of page intentionally left
blank]

 

14

 

[Form of Notice of Exercise]

	
   

  	
  Date:

  	
   

  	
   

  

 

TO:  HF
Financial Corp.

 

RE: 
Election to Purchase Common Stock

 

The
undersigned, pursuant to the provisions set forth in the attached Warrant,
hereby agrees to subscribe for and purchase the number of shares of the Common
Stock set forth below covered by such Warrant. The undersigned, in accordance
with Section 3 of the Warrant, hereby agrees to pay the aggregate Exercise
Price for such shares of Common Stock in the manner set forth below. A new
warrant evidencing the remaining shares of Common Stock covered by such
Warrant, but not yet subscribed for and purchased, if any, should be issued in
the name set forth below.

 

	
  Number of
  Shares of Common Stock

  	
   

  	
   

  

 

	
  Method of
  Payment of Exercise Price (note if cashless exercise pursuant to
  Section 3(i) of the Warrant or cash exercise pursuant to 

  
	
  Section 3(ii) of
  the Warrant, with consent of the Company and the Warrantholder)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Aggregate
  Exercise Price:

  	
   

  	
   

  

 

	
   

  	
  Holder:

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

15

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by a duly authorized officer.

 

 

	
  Dated: November 21, 2008

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COMPANY: HF Financial Corp.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:  

  	
    /s/ Curtis L. Hage

  
	
   

  	
   

  	
    Name: Curtis L. Hage

  
	
   

  	
   

  	
    Title: Chairman and Chief
  Executive
             Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  
	
   

  	
   

  	
   

  
	
   

  	
  By:  

  	
   /s/ Darrel L. Posegate

  
	
   

  	
   

  	
    Name: Darrel L. Posegate

  
	
   

  	
   

  	
    Title: Executive Vice
  President, Chief
             Financial Officer and
  Treasurer

  

 

 

[Signature Page to Warrant]

 

16

 

SCHEDULE A

 

	
  Item 1

  	
   

  	
   

  
	
  Name:

  	
   

  	
  HF Financial
  Corp.

  
	
  Corporate or
  other organizational form:

  	
   

  	
  Corporation

  
	
  Jurisdiction
  of organization:

  	
   

  	
  Delaware

  
	
   

  	
   

  	
   

  
	
  Item 2

  	
   

  	
   

  
	
  Exercise
  Price:

  	
   

  	
  $12.40

  
	
   

  	
   

  	
   

  
	
  Item 3

  	
   

  	
   

  
	
  Issue Date:

  	
   

  	
  November 21,
  2008

  
	
   

  	
   

  	
   

  
	
  Item 4

  	
   

  	
   

  
	
  Amount of
  last dividend declared prior to the Issue Date:

  	
   

  	
  $0.1125 per
  share of Common Stock

  
	
   

  	
   

  	
   

  
	
  Item 5

  	
   

  	
   

  
	
  Date of
  Letter Agreement between the Company and the United States Department of the
  Treasury:

  	
   

  	
  November 21,
  2008

  
	
   

  	
   

  	
   

  
	
  Item 6

  	
   

  	
   

  
	
  Number of
  shares of Common Stock:

  	
   

  	
  302,419

  
	
   

  	
   

  	
   

  
	
  Item 7

  	
   

  	
   

  
	
  Company’s
  address:

  	
   

  	
  HF FINANCIAL
  CORP.

  
	
   

  	
   

  	
  225 South
  Main Avenue

  
	
   

  	
   

  	
  Sioux Falls,
  South Dakota 57104

  
	
   

  	
   

  	
   

  
	
  Item 8

  	
   

  	
   

  
	
  Notice
  information:

  	
   

  	
  If to the
  Company:

  
	
   

  	
   

  	
  HF FINANCIAL
  CORP.

  
	
   

  	
   

  	
  225 South
  Main Avenue

  
	
   

  	
   

  	
  Sioux Falls,
  South Dakota 57104

  
	
   

  	
   

  	
  Attention:
  Darrel L. Posegate

  
	
   

  	
   

  	
  Telephone:
  (605) 333-7556

  
	
   

  	
   

  	
  Facsimile:
  (605) 333-7621

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