Document:

Exhibit
10.2

 

 

HF FINANCIAL CORP.

 

as Issuer

 

 

INDENTURE

 

Dated as of
September 25, 2003

 

 

WILMINGTON TRUST COMPANY

 

as Trustee

 

 

FLOATING RATE JUNIOR
SUBORDINATED DEBT SECURITIES DUE 2033

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I                                   DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section
  1.01

  	
   

  	
  Definitions.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II                                 DEBT
  SECURITIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section
  2.01

  	
   

  	
  Authentication
  and Dating.

  	
   

  
	
   

  	
  Section
  2.02

  	
   

  	
  Form of
  Trustee’s Certificate of Authentication.

  	
   

  
	
   

  	
  Section
  2.03

  	
   

  	
  Form and
  Denomination of Debt Securities.

  	
   

  
	
   

  	
  Section
  2.04

  	
   

  	
  Execution of
  Debt Securities.

  	
   

  
	
   

  	
  Section
  2.05

  	
   

  	
  Exchange
  and Registration of Transfer of Debt Securities.

  	
   

  
	
   

  	
  Section
  2.06

  	
   

  	
  Mutilated,
  Destroyed, Lost or Stolen Debt Securities.

  	
   

  
	
   

  	
  Section
  2.07

  	
   

  	
  Temporary
  Debt Securities.

  	
   

  
	
   

  	
  Section
  2.08

  	
   

  	
  Payment of
  Interest.

  	
   

  
	
   

  	
  Section
  2.09

  	
   

  	
  Cancellation
  of Debt Securities Paid, etc.

  	
   

  
	
   

  	
  Section
  2.10

  	
   

  	
  Computation
  of Interest.

  	
   

  
	
   

  	
  Section
  2.11

  	
   

  	
  Extension
  of Interest Payment Period.

  	
   

  
	
   

  	
  Section
  2.12

  	
   

  	
  CUSIP
  Numbers.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III                             PARTICULAR
  COVENANTS OF THE COMPANY

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section
  3.01

  	
   

  	
  Payment of
  Principal, Premium and Interest; Agreed Treatment of the Debt Securities.

  	
   

  
	
   

  	
  Section
  3.02

  	
   

  	
  Offices for
  Notices and Payments, etc.

  	
   

  
	
   

  	
  Section
  3.03

  	
   

  	
  Appointments
  to Fill Vacancies in Trustee’s Office.

  	
   

  
	
   

  	
  Section
  3.04

  	
   

  	
  Provision
  as to Paying Agent.

  	
   

  
	
   

  	
  Section
  3.05

  	
   

  	
  Certificate
  to Trustee.

  	
   

  
	
   

  	
  Section
  3.06

  	
   

  	
  Additional
  Amounts.

  	
   

  
	
   

  	
  Section
  3.07

  	
   

  	
  Compliance
  with Consolidation Provisions.

  	
   

  
	
   

  	
  Section
  3.08

  	
   

  	
  Limitation
  on Dividends.

  	
   

  
	
   

  	
  Section
  3.09

  	
   

  	
  Covenants
  as to the Trust.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV                             LISTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section
  4.01

  	
   

  	
  Securityholders’
  Lists.

  	
   

  
	
   

  	
  Section
  4.02

  	
   

  	
  Preservation
  and Disclosure of Lists.

  	
   

  
	
   

  	
  Section
  4.03

  	
   

  	
  Financial
  and Other Information.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V                                 REMEDIES
  OF THE TRUSTEE AND SECURITYHOLDERS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section
  5.01

  	
   

  	
  Events of
  Default.

  	
   

  
	
   

  	
  Section
  5.02

  	
   

  	
  Payment of
  Debt Securities on Default; Suit Therefor.

  	
   

  
	
   

  	
  Section
  5.03

  	
   

  	
  Application
  of Moneys Collected by Trustee.

  	
   

  
	
   

  	
  Section
  5.04

  	
   

  	
  Proceedings
  by Securityholders.

  	
   

  

 

i

 

	
   

  	
  Section
  5.05

  	
   

  	
  Proceedings
  by Trustee.

  	
   

  
	
   

  	
  Section
  5.06

  	
   

  	
  Remedies
  Cumulative and Continuing.

  	
   

  
	
   

  	
  Section
  5.07

  	
   

  	
  Direction
  of Proceedings and Waiver of Defaults by Majority of Securityholders.

  	
   

  
	
   

  	
  Section
  5.08

  	
   

  	
  Notice of
  Defaults.

  	
   

  
	
   

  	
  Section
  5.09

  	
   

  	
  Undertaking
  to Pay Costs.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI                             CONCERNING
  THE TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section
  6.01

  	
   

  	
  Duties and
  Responsibilities of Trustee.

  	
   

  
	
   

  	
  Section
  6.02

  	
   

  	
  Reliance on
  Documents, Opinions, etc.

  	
   

  
	
   

  	
  Section
  6.03

  	
   

  	
  No
  Responsibility for Recitals, etc.

  	
   

  
	
   

  	
  Section
  6.04

  	
   

  	
  Trustee,
  Authenticating Agent, Paying Agents, Transfer Agents or Registrar May Own
  Debt Securities.

  	
   

  
	
   

  	
  Section
  6.05

  	
   

  	
  Moneys to
  be Held in Trust.

  	
   

  
	
   

  	
  Section
  6.06

  	
   

  	
  Compensation
  and Expenses of Trustee.

  	
   

  
	
   

  	
  Section
  6.07

  	
   

  	
  Officers’
  Certificate as Evidence.

  	
   

  
	
   

  	
  Section
  6.08

  	
   

  	
  Eligibility
  of Trustee.

  	
   

  
	
   

  	
  Section
  6.09

  	
   

  	
  Resignation
  or Removal of Trustee.

  	
   

  
	
   

  	
  Section
  6.10

  	
   

  	
  Acceptance
  by Successor Trustee.

  	
   

  
	
   

  	
  Section
  6.11

  	
   

  	
  Succession
  by Merger, etc.

  	
   

  
	
   

  	
  Section
  6.12

  	
   

  	
  Authenticating
  Agents.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII                         CONCERNING
  THE SECURITYHOLDERS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section
  7.01

  	
   

  	
  Action by
  Securityholders.

  	
   

  
	
   

  	
  Section
  7.02

  	
   

  	
  Proof of
  Execution by Securityholders.

  	
   

  
	
   

  	
  Section
  7.03

  	
   

  	
  Who Are Deemed
  Absolute Owners.

  	
   

  
	
   

  	
  Section
  7.04

  	
   

  	
  Debt
  Securities Owned by Company Deemed Not Outstanding.

  	
   

  
	
   

  	
  Section
  7.05

  	
   

  	
  Revocation
  of Consents; Future Holders Bound.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII                     SECURITYHOLDERS’
  MEETINGS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section
  8.01

  	
   

  	
  Purposes of
  Meetings.

  	
   

  
	
   

  	
  Section
  8.02

  	
   

  	
  Call of
  Meetings by Trustee.

  	
   

  
	
   

  	
  Section
  8.03

  	
   

  	
  Call of
  Meetings by Company or Securityholders.

  	
   

  
	
   

  	
  Section
  8.04

  	
   

  	
  Qualifications
  for Voting.

  	
   

  
	
   

  	
  Section
  8.05

  	
   

  	
  Regulations.

  	
   

  
	
   

  	
  Section
  8.06

  	
   

  	
  Voting.

  	
   

  
	
   

  	
  Section
  8.07

  	
   

  	
  Quorum;
  Actions.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX                            SUPPLEMENTAL
  INDENTURES

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section
  9.01

  	
   

  	
  Supplemental
  Indentures without Consent of Securityholders.

  	
   

  
	
   

  	
  Section
  9.02

  	
   

  	
  Supplemental
  Indentures with Consent of Securityholders.

  	
   

  
	
   

  	
  Section
  9.03

  	
   

  	
  Effect of
  Supplemental Indentures.

  	
   

  

 

ii

 

	
   

  	
  Section
  9.04

  	
   

  	
  Notation on
  Debt Securities.

  	
   

  
	
   

  	
  Section
  9.05

  	
   

  	
  Evidence of
  Compliance of Supplemental Indenture to be Furnished to Trustee.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X                                REDEMPTION
  OF SECURITIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 10.01

  	
   

  	
  Optional
  Redemption.

  	
   

  
	
   

  	
  Section
  10.02

  	
   

  	
  Special
  Event Redemption.

  	
   

  
	
   

  	
  Section
  10.03

  	
   

  	
  Notice of
  Redemption; Selection of Debt Securities.

  	
   

  
	
   

  	
  Section
  10.04

  	
   

  	
  Payment
  of Debt Securities Called for Redemption.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI                            CONSOLIDATION,
  MERGER, SALE, CONVEYANCE AND LEASE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section
  11.01

  	
   

  	
  Company
  May Consolidate, etc., on Certain Terms.

  	
   

  
	
   

  	
  Section
  11.02

  	
   

  	
  Successor
  Entity to be Substituted.

  	
   

  
	
   

  	
  Section
  11.03

  	
   

  	
  Opinion
  of Counsel to be Given to Trustee.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII                        SATISFACTION
  AND DISCHARGE OF INDENTURE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section
  12.01

  	
   

  	
  Discharge
  of Indenture.

  	
   

  
	
   

  	
  Section
  12.02

  	
   

  	
  Deposited
  Moneys to be Held in Trust by Trustee.

  	
   

  
	
   

  	
  Section
  12.03

  	
   

  	
  Paying
  Agent to Repay Moneys Held.

  	
   

  
	
   

  	
  Section
  12.04

  	
   

  	
  Return of
  Unclaimed Moneys.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  XIII                    IMMUNITY OF
  INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section
  13.01

  	
   

  	
  Indenture
  and Debt Securities Solely Corporate Obligations.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIV                    MISCELLANEOUS
  PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section
  14.01

  	
   

  	
  Successors.

  	
   

  
	
   

  	
  Section
  14.02

  	
   

  	
  Official
  Acts by Successor Entity.

  	
   

  
	
   

  	
  Section
  14.03

  	
   

  	
  Surrender
  of Company Powers.

  	
   

  
	
   

  	
  Section
  14.04

  	
   

  	
  Addresses
  for Notices, etc.

  	
   

  
	
   

  	
  Section
  14.05

  	
   

  	
  Governing
  Law.

  	
   

  
	
   

  	
  Section
  14.06

  	
   

  	
  Evidence
  of Compliance with Conditions Precedent.

  	
   

  
	
   

  	
  Section
  14.07

  	
   

  	
  Business
  Day Convention.

  	
   

  
	
   

  	
  Section
  14.08

  	
   

  	
  Table of
  Contents, Headings, etc.

  	
   

  
	
   

  	
  Section
  14.09

  	
   

  	
  Execution
  in Counterparts.

  	
   

  
	
   

  	
  Section
  14.10

  	
   

  	
  Separability.

  	
   

  
	
   

  	
  Section
  14.11

  	
   

  	
  Assignment.

  	
   

  
	
   

  	
  Section
  14.12

  	
   

  	
  Acknowledgment
  of Rights.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XV                        SUBORDINATION
  OF DEBT SECURITIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section
  15.01

  	
   

  	
  Agreement
  to Subordinate.

  	
   

  

 

iii

 

	
   

  	
  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

  	
   

  

 

iv

 

THIS INDENTURE, dated as of September 25, 2003,
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 2033 (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, 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 1.01. 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 in the United States at the time of any computation.  The words “herein,” “hereof” and “hereunder”
and other words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.

 

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

 

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

 

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

 

“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.

 

 

“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, The City of New York
or Sioux Falls, South Dakota are permitted or required by 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, if the Company is organized and
existing under the laws of the United States or any state thereof or the
District of Columbia, 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.

 

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

 

2

 

“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.

 

“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.

 

“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, dated as of September 25, 2003, 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.

 

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

 

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

 

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

 

“Indenture” means this Indenture 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 January 8th, April 8th,
July 8th and October 8th of each year, commencing on
January 8, 2004, subject to Section 14.07.

 

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

 

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

 

3

 

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

 

“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 three-month U.S.
Dollar 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)(i).

 

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

 

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

 

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

 

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

 

“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, the 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.

 

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

 

4

 

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 X and XIV 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.

 

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

 

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

 

“OTS” means the Office of Thrift Supervision.

 

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

 

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

 

“Principal Office of the Trustee” 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, DE 19890-0001.

 

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

 

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

 

5

 

“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 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.

 

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

 

“Securityholder,” “holder of Debt Securities” or other similar terms,
means any Person in whose name at the time a particular Debt Security 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, it is provided in the instrument creating or
evidencing the same or pursuant to which the same is outstanding that such
obligations are not superior or are pari passu in right of payment to the Debt
Securities; provided, however, that Senior Indebtedness shall not
include (A) any debt securities issued to any trust other than the Trust (or a
trustee of such trust) that is a financing vehicle of the Company (a “financing
entity”), in connection with the issuance by such financing entity of equity or
other securities in transactions substantially similar in structure to the
transactions contemplated hereunder and in the Declaration or (B) any
guarantees of the Company in respect of the equity or other securities of any
financing entity referred to in clause (A) above.

 

“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 Section 10.02.

 

6

 

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

 

 

	
  Special Redemption During the 12-Month

  Period Beginning October 8,

  	
   

  	
  Percentage of Principal Amount

  	
   

  
	
  2003

  	
   

  	
  104.40

  	
  %

  
	
  2004

  	
   

  	
  103.52

  	
  %

  
	
  2005

  	
   

  	
  102.64

  	
  %

  
	
  2006

  	
   

  	
  101.76

  	
  %

  
	
  2007

  	
   

  	
  100.88

  	
  %

  
	
  2008 and thereafter

  	
   

  	
  100.00

  	
  %

  

 

“Subsidiary” means, with respect to any Person, (i) any corporation, at
least a majority of the outstanding voting stock of which is owned, directly or
indirectly, by such Person or 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 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

 

7

 

opinion, subject to United States federal income tax
with respect to income received or accrued on the Debt Securities; (ii) if the
Company is organized and existing under the laws of the United States or any
state thereof or the District of Columbia 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 or otherwise required to pay, or
required to withhold from distributions to holders of Trust Securities, more
than a de minimis amount of other taxes (including withholding taxes), duties,
assessments or other governmental charges.

 

“Trust” means HF Financial Capital Trust IV, the Delaware
statutory 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
from time to time, or any successor legislation.

 

“Trust Securities” means Common Securities and Capital Securities of
the Trust.

 

“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 7701(a)(30) of the Internal Revenue Code of 1986, as amended.

 

ARTICLE II

DEBT SECURITIES

 

Section 2.01                                                        Authentication
and Dating.

 

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
$7,217,000 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
or other officers with appropriate delegated authority of the Company as the
case may be.

 

8

 

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 Securityholders.

 

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 (if legally required) 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 provided in this Article II.  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.

 

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
such holder’s 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 other than exchanges pursuant to Section
2.07, Section 9.04 or Section 10.04 not involving any transfer.

 

10

 

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 immediately
preceding the date of selection of Debt Securities for redemption.

 

Notwithstanding the foregoing, Debt Securities may not be transferred
prior to the Resale Restriction Termination Date except in compliance with the
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 OR ANY INTEREST OR PARTICIPATION
HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO YEARS (OR
SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) OF THE SECURITIES ACT)
AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THE
SECURITIES ACT) OF THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH INTEREST
OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE, IF ANY,
AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO 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 THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN “ACCREDITED INVESTOR”
WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3), (7) OR (8) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR SUCH INTEREST OR
PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH 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, (D)
PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT  OR (E)
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

 

11

 

OR
TRANSFER PURSUANT TO CLAUSE (C), (D) OR (E) ABOVE 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 OR
ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS
THE CASE MAY BE, AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

 

THE
HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, 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 OR PARTICIPATION HEREIN, 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, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND
HOLDING OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION 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 OR PARTICIPATION HEREIN WILL BE DEEMED TO HAVE
REPRESENTED BY ITS PURCHASE AND HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE,
THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING 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 AND HOLDING 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 OF THIS SECURITY 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.

 

12

 

THIS
SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF
$100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF.  ANY ATTEMPTED TRANSFER OF THIS SECURITY IN DENOMINATIONS OF 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
OR ANY INTEREST OR PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT NOT
LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR
PARTICIPATION, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO
INTEREST WHATSOEVER IN THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.

 

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

 

In case any Debt Security shall become mutilated or be destroyed, 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

 

13

 

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 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.

 

Section 2.08                                                        Payment
of Interest.

 

Each Debt Security will bear interest at the then applicable Interest
Rate (i) in the case of the initial Interest Period, for the period from, and
including, the date of original issuance of such Debt Security to, but
excluding, the initial Interest Payment Date and (ii) thereafter, for the
period from, and including, the first day following the end of the preceding
Interest Period to, but excluding, the applicable Interest Payment Date or, in
the case of the last Interest Period, the related Optional Redemption Date,
Special Redemption Date or Maturity Date, as applicable (each such period, an
“Interest Period”), on the principal thereof, on any overdue principal and (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.  Interest and any
Deferred Interest on any Debt Security that is payable, and is punctually paid
or duly provided for by the Company, on any Interest Payment Date shall be paid
to the Person in whose name such 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, any Optional Redemption Date or the Special
Redemption Date, as the case may be, shall be paid to the Person to whom
principal is paid.  In case (i) the
Maturity Date of any Debt Security or (ii) any Debt Security or portion
thereof is called for redemption and the related Optional Redemption Date or
the Special Redemption Date, as the case may be, is subsequent to the regular
record date with respect to any Interest Payment Date

 

14

 

and either on or 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 by the Company, on
any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith
cease to be payable to the 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 reasonably 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 provided in this paragraph.  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.

 

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 the applicable Interest Payment Date, whether or not
such day 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

 

15

 

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, in which case the Trustee
shall dispose of such Debt Securities as directed by the Company.  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 such Interest
Period.

 

(b)                                 LIBOR
shall be determined by the Calculation Agent for each Interest Period in
accordance with the following provisions:

 

(i)                                     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 the January 15th,
April 15th, July 15th and October 15th,
as the case may be, immediately succeeding the commencement of such Interest
Period (or, in the case of the first Interest Period, on September 23, 2003)
(each such day, a “LIBOR Determination Date”), LIBOR shall equal the rate, as
obtained by the Calculation Agent, for three-month U.S. Dollar deposits in
Europe, which appears on Telerate (as defined in the International Swaps and
Derivatives Association, Inc. 2000 Interest Rate and Currency Exchange
Definitions) page 3750 or such other page as may replace such page 3750, as of
11:00 a.m. (London time) on such LIBOR Determination Date, as reported by
Bloomberg Financial Markets Commodities News or any successor service
(“Telerate Page 3750”).  “LIBOR Business
Day” means any day that is not a Saturday, Sunday or other day on which
commercial banking institutions in The City of 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 such LIBOR Determination
Date, the corrected rate as so substituted will be LIBOR for such LIBOR
Determination Date.

 

(ii)                                  If,
on such LIBOR Determination Date, such rate does not appear on Telerate Page
3750, the Calculation Agent shall determine the arithmetic mean of the offered
quotations of the Reference Banks to leading banks in the London interbank
market for three-month U.S. Dollar deposits in Europe (in an amount determined
by the Calculation Agent) by reference to requests for quotations as of
approximately 11:00 a.m. (London time) on such LIBOR Determination Date made by
the Calculation Agent to the Reference Banks. 
If, on such LIBOR Determination Date, at least two of the Reference
Banks provide such quotations, LIBOR shall equal the arithmetic mean of such quotations.  If, on such LIBOR Determination Date, only
one or none of the Reference Banks provide such a quotation, 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

 

16

 

by the Calculation
Agent) are quoting on such LIBOR Determination Date for three-month U.S. Dollar
deposits in Europe at approximately 11:00 a.m. (London 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.

 

(iii)                               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 for such Interest
Period shall be LIBOR in effect for the immediately preceding Interest Period.

 

(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).

 

(d)                                 On
each LIBOR Determination Date, the Calculation Agent shall notify, in writing,
the Company and the Paying Agent of the applicable Interest Rate that applies
to the related Interest Period.  The
Calculation Agent shall, upon the request of a holder of any Debt Securities,
inform such holder of the Interest Rate that applies to the related Interest
Period.  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 applicable 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 20 consecutive quarterly
periods (each such extended interest payment period, together with all previous
and further consecutive extensions thereof, is referred to herein as an
“Extension Period”).  No Extension
Period may end on a date other than an Interest Payment Date or extend beyond
the Maturity Date, any Optional Redemption Date or the Special Redemption Date,
as the case may be.  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 an annual rate equal to the
Interest Rate applicable during such Extension Period, compounded quarterly
from the date such Deferred Interest would have been payable were it not for
the Extension Period, to the extent permitted by applicable law.  No interest or Deferred Interest (except any
Additional Amounts that may be due and payable) shall be due and payable during
an Extension Period, except at the end thereof.  At the end of any Extension Period, the Company shall pay all
Deferred Interest then accrued and unpaid on the Debt Securities; provided,
however, that during any Extension Period, the Company shall be subject
to the restrictions set forth in Section 3.08. 
Prior to the termination of any Extension

 

17

 

Period, the Company may further extend such Extension Period, provided,
that no Extension Period (including all previous and further consecutive
extensions that are part of such Extension Period) shall exceed 20 consecutive
quarterly periods.  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 or extend an 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 or extend an 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 or extend an Extension Period to the
Securityholders.

 

Section 2.12                                                        CUSIP
Numbers.

 

The Company in issuing the Debt Securities may use a “CUSIP” number (if
then generally in use), and, if so, the Trustee shall use a “CUSIP” number 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 number 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 number.

 

ARTICLE III

PARTICULAR COVENANTS OF THE COMPANY

 

Section 3.01                                                        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 all payments due in respect of the Debt Securities at the place, at the
respective times and in the manner provided in this Indenture and the Debt
Securities.  Payment of the principal of
and premium, if any, and interest on the Debt Securities due on the Maturity
Date, any Optional Redemption Date or the Special Redemption Date, as the case
may be, will be made by the Company in immediately available funds against
presentation and surrender of such Debt Securities.  At the option of the Company, each installment of interest on the
Debt Securities due on an Interest Payment Date other than the Maturity Date,
any Optional Redemption Date or the Special Redemption Date, as the case may
be, 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 of immediately available funds to
any account with a banking institution located in the United States designated
by such holders to the Paying Agent no later than the related record date.  Notwithstanding anything to the contrary
contained in this Indenture or any Debt Security, if the Trust or the trustee
of the Trust is the holder of any Debt Security, then all payments in respect
of such Debt Security shall be made by the Company in immediately available
funds when due.

 

18

 

(b)                                 The
Company will treat the Debt Securities as indebtedness, and the interest
payable in respect 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 W-8 BEN (or any substitute or successor form) establishing its
non-U.S. status for U.S. federal income tax purposes.

 

(c)                                  As
of the date of this Indenture, the Company represents that it 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 represents 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 premium, if any, 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.

 

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 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 provided in this Indenture 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, 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 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 for the purposes above mentioned. 
The Company will give to the Trustee prompt written notice of any such
designation or rescission thereof.

 

19

 

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,

 

(i)                                     that
it will hold all sums held by it as such agent for the payment of all payments
due 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;

 

(ii)                                  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 on  the Debt Securities when the same shall be
due and payable; and

 

(iii)                               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 payments due 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 make such payments 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 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 payments on the Debt
Securities, deposit with a Paying Agent a sum sufficient to pay all payments 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.

 

20

 

(e)                                  The
Company hereby initially appoints the Trustee to act as paying agent for the
Debt Securities (the “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 of the Company
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
Amounts.

 

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

 

Whenever in this Indenture or the Debt Securities there is a reference
in any context to the payment of principal of or premium, if any, or interest
on the Debt Securities, such mention shall be deemed to include mention of
payments of the Additional Amounts provided for in this Section to the extent
that, in such context, Additional Amounts are, were or would be payable in
respect thereof pursuant to the provisions of this Section and express mention
of the payment of Additional Amounts (if applicable) in any provisions hereof
shall not be construed as excluding Additional Amounts in those provisions
hereof where such express mention is not made, provided, however,
that, notwithstanding anything to the contrary contained in this Indenture or
any Debt Security, the deferral of the payment of interest during an Extension
Period pursuant to Section 2.11 shall not defer the payment of any Additional
Amounts that may be due and payable.

 

Section 3.07                                                        Compliance
with Consolidation Provisions.

 

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

 

21

 

Section 3.08                                                        Limitation
on Dividends.

 

If (i) there shall have occurred and be continuing an Event of Default,
(ii) the Company shall be in default with respect to its payment of 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, (B) make any payment of principal of or
premium, if any, or interest on or repay, repurchase or redeem any debt securities
of the Company that rank pari passu in all respects with or junior
in interest to the Debt Securities or (C) make any payment under any guarantees
of the Company that rank pari passu in all respects with or junior
in interest to the Capital Securities Guarantee (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company (I)
in connection with any employment contract, benefit plan or other 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 in
interest to such stock).

 

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 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
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 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.

 

22

 

ARTICLE IV

LISTS

 

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:

 

(i)                                     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

 

(ii)                                  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

 

23

 

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 none of the Company, the Trustee or 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).

 

Section 4.03                                                        Financial
and Other Information.

 

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

 

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

 

(b)                                 if
and for so long as ALESCO Preferred Funding I, Ltd. is the holder of the Debt
Securities, deliver to ALESCO Preferred Funding I, Ltd. the Company’s reports
on Form H-b(11), promptly following their filing with the OTS.

 

24

 

ARTICLE V

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS

 

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, whether at maturity, upon redemption, by acceleration of maturity pursuant
to Section 5.01 of this Indenture 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 or 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
other 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, appointment 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 the 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.

 

25

 

If an Event of Default specified under clause (a), (b) or (c) of this
Section 5.01 occurs and is continuing with respect to the Debt Securities,
then, in each and every such case, either the Trustee or the holders of 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 any premium and interest accrued, but unpaid, thereon to be due
and payable immediately, and upon any such declaration the same shall become
immediately due and payable.  If an
Event of Default specified under clause (d), (e) or (f) of this Section 5.01
occurs, then, in each and every such case, the entire principal amount of the
Debt Securities and any premium and interest accrued, but unpaid, thereon shall
ipso  facto become immediately due and payable without further
action.

 

The foregoing provisions, however, are subject to the condition that
if, at any time after the principal of the Debt Securities shall have become
due by acceleration, 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 all payments
on the Debt Securities which shall have become due otherwise than by
acceleration (with interest upon all such payments 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 payments in respect of Debt
Securities which shall have become due by acceleration, shall have been cured,
waived or otherwise remedied as provided herein, then, in each and 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 acceleration 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; provided, however, that if the Debt Securities are held
by the Trust or a trustee of the Trust, such waiver or rescission and annulment
shall not be effective until the holders of a majority in aggregate liquidation
amount of the outstanding Capital Securities of the Trust shall have consented
to such waiver or rescission and annulment.

 

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 (a) or (b) of Section 5.01 and upon demand of the Trustee,
the Company will pay to the Trustee, for the benefit of the holders of the Debt
Securities, the whole amount that then shall have become due and payable on all
Debt Securities, including Deferred Interest accrued on the

 

26

 

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.

 

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
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.

 

27

 

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.

 

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, 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 upon such Debt Securities;
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.

 

28

 

Notwithstanding any other provisions in this Indenture, the right of
any holder of any Debt Security to receive payment of the principal of and
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.

 

Section 5.05                                                        Proceedings
by Trustee.

 

In case of an Event of Default, 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 at the time outstanding and, if the Debt Securities are
held by the Trust or a trustee of the Trust, the holders of a majority in
aggregate liquidation amount of the outstanding Capital Securities of the Trust
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 if the Debt Securities are held by the Trust or a trustee
of the Trust, such time, method and place or such exercise, as the case may be,
may not be so directed until the holders of a majority in aggregate liquidation
amount of the outstanding Capital Securities of the Trust shall have directed
such time, method and place or such exercise, as the case may be; provided,
further, 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

 

29

 

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 of acceleration, or ipso  facto acceleration, of 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 or 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 the Trust, such waiver or modification to such waiver shall not be effective
until the holders of a majority in aggregate liquidation amount of the
outstanding Capital 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 or modification to such waiver shall not be effective until each holder
of the outstanding Capital Securities of the Trust shall have consented to such
waiver or modification to such waiver. 
Upon any such waiver or modification to such waiver, the Default or
Event of 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 or modification to 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, 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.

 

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 “default” for the purpose of this
Section is hereby defined to be any event specified in 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 or 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 such holder’s 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

 

30

 

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 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 outstanding Debt Securities (or, if such Debt
Securities are held by the Trust or a trustee of the Trust, more than 10% in
liquidation amount of the outstanding Capital Securities),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 or to any suit
instituted in accordance with Section 14.12.

 

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 person would exercise or use under the circumstances in the
conduct of such person’s 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 or bad faith, except that:

 

(a)                                  prior
to the occurrence of an Event of Default and after the curing or waiving of all
Events of Default which may have occurred:

 

(i)                                     the
duties and obligations of the Trustee with respect to the 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

 

(ii)                                  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;

 

31

 

(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 that the Trustee shall be deemed to have knowledge
of any 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 Amounts if the Trustee does not have actual knowledge or written notice
that such payment is due and payable) .

 

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;

 

32

 

(e)                                  the
Trustee shall not be liable for any action taken or omitted 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 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 (which has not been
cured or waived) to exercise with respect to the 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 person would exercise or use
under the circumstances in the conduct of such person’s 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 a
majority in aggregate 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

 

(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, any Authenticating Agent, any Paying Agent, 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

 

33

 

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.

 

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, willful misconduct 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, willful misconduct 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 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 clause (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

 

34

 

matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence, willful
misconduct 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, willful
misconduct 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 or national association 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 or national association 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 the
combined capital and surplus of such corporation or national association shall
be deemed to be its combined capital and surplus as set forth in its most
recent records of condition so published.

 

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 or national association 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, 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 or herself and
all others

 

35

 

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:

 

(i)                                     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;

 

(ii)                                  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

 

(iii)                               the
Trustee shall become incapable of acting, or shall be adjudged 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 (i), (ii) or (iii) 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 or herself 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, 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 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 indenture

 

36

 

supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm that all of the
rights, powers, trusts and duties of the retiring Trustee shall be vested in
the successor Trustee, 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
hereunder.  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.

 

No successor Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Trustee shall be
eligible and qualified 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, 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

 

37

 

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.

 

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, however,
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 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 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 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 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, the Trustee may, and upon
the request of the Company shall, promptly appoint a successor Authenticating
Agent eligible under this Section, 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 of its
predecessor hereunder, with like effect as if originally named as
Authenticating Agent herein.

 

38

 

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 such Securityholder’s 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.

 

39

 

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 such Person 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 and premium, if any, and
interest on such Debt Security and for all other purposes; and none of the
Company, the Trustee, any Authenticating Agent, any Paying Agent, any transfer
agent or 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 such holder’s 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 (other than the Trust) 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 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

 

40

 

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.

 

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 The City of New York, the Borough of Manhattan, 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.

 

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

 

41

 

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 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 be (a) a holder of one or more Debt Securities or (b) a Person appointed
by an instrument in writing as proxy by a holder of one or more 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 deem appropriate.

 

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 at 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 such holder; 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 such chairman or instruments in writing as aforesaid duly designating
such chairman 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.

 

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

 

42

 

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 aggregate principal amount
of the Debt Securities then outstanding 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 aggregate principal amount
of the Debt Securities then outstanding, the Persons holding or representing
such specified percentage in aggregate principal amount of the Debt Securities
then outstanding 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 aggregate principal amount
of the Debt Securities then outstanding 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 a majority in aggregate principal amount of
the Debt Securities then outstanding; 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

 

43

 

affirmative vote of the holders of not less than such
specified percentage in aggregate principal amount of the Debt Securities then
outstanding.

 

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 then outstanding;

 

(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), 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 applicable to Capital Securities shall not be deemed to adversely affect
the holders of the Debt Securities);

 

44

 

(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 Section) 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
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 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 the consent
of the holders of each Debt Security then outstanding and affected thereby, (i)
change the Maturity Date of any Debt Security, or reduce the principal amount
thereof or any premium thereon, or reduce the rate (or manner of calculation of
the rate) or extend the time of payment of interest thereon, or reduce (other
than as a result of the maturity or earlier redemption of any such Debt
Security in accordance with the terms of this Indenture and such Debt Security)
or increase the aggregate principal amount of Debt Securities then outstanding,
or change any of the redemption provisions, or make the principal thereof or
any interest or premium thereon payable in any coin or currency other than
United States Dollars, or impair or affect the right of any Securityholder to
institute suit for payment thereof, 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 the trustee of the Trust, such supplemental
indenture shall not be effective until the holders of a majority in aggregate

 

45

 

liquidation amount of the outstanding Capital
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 outstanding Capital Securities shall have consented to
such supplemental indenture.

 

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 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 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.

 

46

 

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 as conclusive evidence that any supplemental indenture
executed pursuant hereto complies with the requirements of this Article
IX.  The Trustee shall also 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.

 

The Company shall have the right, subject to the receipt by the Company
of the 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
(provided that all accrued and unpaid interest has been paid on all Debt
Securities for all Interest Periods terminating on or prior to such date) from
time to time in part, on any Interest Payment Date on or after October 8,
2008 (each, an “Optional Redemption Date”), at the Optional Redemption Price.

 

Section 10.02                                                  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.  In the event that the Special Redemption Date falls on a day
prior to the LIBOR Determination Date for any Interest Period, then the Company
shall be required to pay to Securityholders, on the Business Day following such
LIBOR Determination Date, any additional amount of interest that would have
been payable on the Special Redemption Date had the amount of interest
determined on such LIBOR Determination Date been known on the first day of such
Interest Period.

 

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, or cause the Trustee to mail (at the expense of
the Company), 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.

 

47

 

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 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 Optional 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 such date
all the Debt Securities so called for redemption at the applicable price
therefor, together with unpaid interest accrued to such date.

 

The Company will give the Trustee notice not less than 45 nor more than
75 days prior to the date fixed for redemption as to the 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 related Optional
Redemption Date or Special Redemption Date (as the case may be) and at the
place or places stated in such notice at the applicable price therefor,
together with unpaid interest accrued thereon to said Optional Redemption Date
or the Special Redemption Date (as the case may be), and on and after said
Optional Redemption Date or the Special Redemption Date (as the case may be)
(unless the Company shall default in the payment of such Debt Securities at the
redemption price, together with unpaid interest accrued thereon 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 price
therefor, together with unpaid interest accrued thereon to said Optional
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.

 

48

 

ARTICLE XI

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

 

Section 11.01                                                  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 all or substantially all of the property or
capital stock of the Company or its successor or successors 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 (i) upon any such
consolidation, merger (where the Company is not the surviving corporation),
sale, conveyance, transfer or other disposition, the successor entity shall be
a corporation organized and existing under the laws of the United States or any
state thereof or the District of Columbia (unless such corporation has (1)
agreed to make all payments due in respect of the Debt Securities or, if
outstanding, the Trust Securities and the Capital Securities Guarantee without
withholding or deduction for, or on account of, any taxes, duties, assessments
or other governmental charges under the laws or regulations of the jurisdiction
of organization or residence (for tax purposes) of such corporation or any
political subdivision or taxing authority thereof or therein unless required by
applicable law, in which case such corporation shall have agreed to pay such
additional amounts as shall be required so that the net amounts received and
retained by the holders of such Debt Securities or Trust Securities, as the
case may be, after payment of all taxes (including withholding taxes), duties,
assessments or other governmental charges, will be equal to the amounts that
such holders would have received and retained had no such taxes (including
withholding taxes), duties, assessments or other governmental charges been
imposed, (2) irrevocably and unconditionally consented and submitted to the
jurisdiction of any United States federal court or New York state court, in
each case located in the Borough of Manhattan, The City of New York, in respect
of any action, suit or proceeding against it arising out of or in connection
with this Indenture or the Debt Securities and irrevocably and unconditionally
waived, to the fullest extent permitted by law, any objection to the laying of
venue in any such court or that any such action, suit or proceeding has been
brought in an inconvenient forum and (3) irrevocably appointed an agent in The
City of New York for service of process in any action, suit or proceeding
referred to in clause (2) above) and such corporation expressly assumes all of
the obligations of the Company under the Debt Securities, this Indenture, the Capital
Securities Guarantee and the Declaration and (ii) after giving effect to
any such consolidation, merger, sale, conveyance, transfer or other
disposition, no Default or Event of Default shall have occurred and be
continuing.

 

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 corporation, by
supplemental indenture, executed and delivered to the Trustee and reasonably
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

 

49

 

conditions of this Indenture to be performed or
observed by the Company, such successor corporation 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 corporation
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
corporation 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 corporation 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.

 

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 the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may be, but excluding,
however, the amount of any moneys for the payment of principal of and premium,
if any, or interest on the Debt Securities (1) theretofore repaid to the
Company in accordance with the provisions of Section 12.04, or (2) paid to any
state or to the District of

 

50

 

Columbia pursuant to its unclaimed property or similar
laws, and if in the case of either clause (a) or (b) above 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 in full.  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, premium,
if any, and interest.

 

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 the Company 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.

 

51

 

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 predecessor or 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.

 

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 such purpose) to the Company at HF Financial Corp., Attention: Pamela F.
Russo.  Any notice, direction, request
or demand by any Securityholder or the Company to or upon the

 

52

 

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, DE 19890-0001, Attention: Corporate Trust Administration.

 

Section 14.05                                                  Governing
Law.

 

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

 

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 (except that no such Opinion of Counsel is
required to be furnished to the Trustee in connection with the authentication
and issuance of Debt Securities).

 

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 or she has made such
examination or investigation as is necessary to enable him or her 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                                                  Business
Day Convention.

 

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

 

53

 

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, illegal or unenforceable provision had never been
contained herein or therein.

 

Section 14.11                                                  Assignment.

 

Subject to Article XI, the Company will have the right at all times to
assign any of its rights or obligations under this Indenture and the Debt
Securities to a direct or indirect wholly owned Subsidiary of the Company; provided,
however, 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.

 

Section 14.12                                                  Acknowledgment
of Rights.

 

The Company acknowledges that, with respect to any Debt Securities held
by the Trust or a trustee of the Trust, if such 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 aggregate
liquidation amount of the outstanding Capital Securities of the Trust have so
directed in writing such 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 trustee’s rights under this
Indenture without first instituting any legal proceedings against such 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, on or principal of the Debt Securities on the date such interest,
premium, if any, or principal is otherwise due and payable (or, in the case of
redemption, on the related Optional Redemption Date or the Special Redemption
Date (as the case may be)), the Company acknowledges that a holder of
outstanding 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 (or
Optional Redemption Date or Special Redemption Date (as the case may be))
specified in the Debt Securities.

 

54

 

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 holder’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 payments due 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.

 

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
payments due 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, 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 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, winding-up, 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

 

55

 

money in accordance with its terms, before any payment
is made by the Company on the Debt Securities; and upon any such dissolution,
winding-up, 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.

 

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, transfer or other
disposition of its property as an entirety, or substantially as an entirety, to
another corporation upon the terms and conditions provided for in Article XI of
this Indenture shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section if such other corporation
shall, as a part of such consolidation, merger, conveyance or transfer, comply
with the conditions stated in Article XI of this Indenture.  Nothing in Section 15.02 or in this Section
shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 6.06 of this Indenture.

 

56

 

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 all payments due 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.

 

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 all payments 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.

 

57

 

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 moneys 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 moneys
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 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.

 

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 or herself 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

 

58

 

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.

 

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 or any other Person.

 

59

 

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.

 

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:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST
  COMPANY,

  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
						

 

60

 

EXHIBIT
A

 

FORM OF DEBT SECURITY

 

[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 OR ANY INTEREST OR PARTICIPATION
HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO YEARS (OR
SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) OF THE SECURITIES ACT)
AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THE
SECURITIES ACT) OF THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH INTEREST
OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE, IF ANY,
AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO 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 THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT TO AN “ACCREDITED INVESTOR” WITHIN THE
MEANING OF SUBPARAGRAPH (a) (1), (2), (3), (7) OR (8) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR SUCH INTEREST OR
PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH 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, (D)
PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT OR (E) 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 CLAUSE (C), (D) OR (E) ABOVE TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT
IN ACCORDANCE WITH THE

 

A-1

 

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

 

THE
HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, 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 OR PARTICIPATION HEREIN, 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, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND
HOLDING OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION 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 OR PARTICIPATION HEREIN WILL BE DEEMED TO HAVE
REPRESENTED BY ITS PURCHASE AND HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE,
THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING 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 AND
HOLDING 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 OF THIS SECURITY 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 MINIMUM DENOMINATIONS OF
$100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF.  ANY ATTEMPTED TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESS
THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY
SUCH PURPORTED TRANSFEREE

 

A-2

 

SHALL
BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT
OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR PARTICIPATION, AND SUCH
PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.

 

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 THE 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.

 

Floating Rate Junior
Subordinated Debt Security due 2033

of

HF Financial Corp.

 

HF Financial Corp., a savings and loan holding company incorporated in
Delaware (the “Company”, which term includes any successor permitted under the
Indenture (as defined herein)), for value received, promises to pay to
Wilmington Trust Company, not in its individual capacity but solely as
Institutional Trustee for HF Financial Capital Trust IV, a Delaware
statutory trust, or registered assigns, the principal amount of Seven Million
Two Hundred Seventeen Thousand Dollars ($7,217,000) on October 8, 2033
(the “Maturity Date”) (or any Optional Redemption Date or the Special
Redemption Date, each as defined herein, or any earlier date of acceleration of
the maturity of this Debt Security), and to pay interest on the outstanding
principal amount of this Debt Security from September 25, 2003, or from
the most recent Interest Payment Date (as defined below) to which interest has
been paid or duly provided for, quarterly (subject to deferral as set forth
herein) in arrears on January 8, April 8, July 8 and
October 8 of each year, commencing on January 8, 2004 (each, an
“Interest Payment Date”), at a floating rate per annum, which, with respect to
any Interest Period (as defined in the Indenture), will be equal to LIBOR (as
defined in the Indenture), as determined on the LIBOR Determination Date (as
defined in the Indenture) for such Interest Period, plus 3.10% (the “Interest
Rate”) (provided that the Interest Rate for any Interest Period may not
exceed the highest rate permitted by New York law, as the same may be modified
by United States law of general application) until the principal hereof shall
have been paid or duly provided for, 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 then applicable Interest Rate, compounded quarterly.  The amount of interest payable for any
Interest Period shall be computed on the basis of a 360-day year and the actual
number of days elapsed in such Interest Period.

 

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 the Indenture) is

 

A-3

 

registered at the close of business on the “regular
record date” for such interest installment, which shall be the fifteenth day
prior to such Interest Payment Date, whether or not such day is a Business Day
(as defined herein).  Any such interest
installment (other than Deferred Interest (as defined herein)) not punctually
paid or duly provided for shall forthwith cease to be payable to the holders on
such regular record date and may be paid to the Person in whose name this Debt
Security (or one or more Predecessor 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 holders of the
Debt Securities not less than 10 days prior to such special record date, all as
more fully provided in the Indenture.

 

Payment of the principal of and premium, if any, and interest on this
Debt Security due on the Maturity Date, any Optional Redemption Date or the
Special Redemption Date, as the case may be, shall be made in immediately
available funds against presentation and surrender of this Debt Security at the
office or agency of the Trustee maintained for that purpose in Wilmington,
Delaware, or at the office or agency of any other Paying Agent appointed by the
Company maintained for that purpose in Wilmington, Delaware or Sioux
Falls.  Payment of interest on this Debt
Security due on any Interest Payment Date other than the Maturity Date, any
Optional Redemption Date or the Special Redemption Date, as the case may be,
shall be made at the option of the Company by check mailed to the holder
thereof at such address as shall appear in the Debt Security Register or by
wire transfer of immediately available funds 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, payment of the principal of and premium,
if any, and interest on this Debt Security shall be made in immediately
available funds when due at such place and to such account as may be designated
by the Institutional Trustee.  All
payments in respect of this Debt Security shall be payable 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.

 

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

 

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 20 consecutive quarterly
periods (each such extended interest payment period, together with all previous
and further consecutive extensions thereof, is referred to herein as an
“Extension Period”).  No Extension
Period may end on a date other than an Interest Payment Date or extend beyond
the Maturity Date, any Optional Redemption Date or the Special Redemption Date,
as the case may be.  During any
Extension Period, interest will continue to accrue on the Debt Securities, and

 

A-4

 

interest on such accrued interest (such accrued
interest and interest thereon referred to herein as “Deferred Interest”) will
accrue at an annual rate equal to the Interest Rate applicable during such
Extension Period, compounded quarterly from the date such Deferred Interest
would have been payable were it not for the Extension Period, to the extent
permitted by applicable law.  No
interest or Deferred Interest (except any Additional Amounts (as defined in the
Indenture) that may be due and payable) shall be due and payable during an
Extension Period, except at the end thereof. 
At the end of any Extension Period, the Company shall pay all Deferred
Interest then accrued and unpaid on the Debt Securities; provided, however,
that during any 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 premium, if any, or interest on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu
in all respects with or junior in interest to the Debt Securities (other than
(a) repurchases, redemptions or other acquisitions of shares of capital stock
of the Company (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 Company (or securities convertible into or
exercisable for such capital stock), as consideration in an acquisition
transaction entered into prior to such 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 Extension Period, provided,
that no Extension Period (including all previous and further consecutive
extensions that are part of such Extension Period) shall exceed 20 consecutive
quarterly periods.  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 or extend an 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 or
extend such Extension Period or (ii) 
the date such interest is payable, but in any event not later than the
related regular record date.

 

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 (as defined in the Indenture),
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

 

A-5

 

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

 

This Debt Security shall not be entitled to any benefit under the
Indenture hereinafter referred to and shall not 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-6

 

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-7

 

[FORM OF REVERSE OF
SECURITY]

 

This Debt Security is one of a duly authorized series of debt
securities of the Company (collectively, the “Debt Securities”), all issued or
to be issued pursuant to an Indenture (the “Indenture”), dated as of
September 25, 2003, 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
of which this Debt Security is a part.

 

Upon the occurrence and continuation of a Tax Event, an Investment
Company Event or a Capital Treatment Event (each, a “Special Event”), the
Company shall have the right to redeem this Debt Security, at its option, in
whole with all other Debt Securities 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 (as defined herein).  In the event that the Special Redemption
Date falls on a day prior to the LIBOR Determination Date for any Interest
Period, then the Company shall be required to pay to Securityholders, on the
Business Day following such LIBOR Determination Date, any additional amount of
interest that would have been payable on the Special Redemption Date had the
amount of interest determined on such LIBOR Determination Date been known on
the first day of such Interest Period.

 

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

 

Any redemption pursuant to the preceding two paragraphs will be made,
subject to receipt by the Company of prior approval from the Office of 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’ prior
written notice.  If the Debt Securities
are only partially redeemed by the Company, the Debt Securities will be
redeemed pro rata or by any other method utilized by the Trustee.  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.

 

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

 

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

 

A-8

 

	
  Special Redemption During the 12-Month

  Period Beginning October  8,

  	
   

  	
  Percentage of Principal Amount

  	
   

  
	
  2003

  	
   

  	
  104.40

  	
  %

  
	
  2004

  	
   

  	
  103.52

  	
  %

  
	
  2005

  	
   

  	
  102.64

  	
  %

  
	
  2006

  	
   

  	
  101.76

  	
  %

  
	
  2007

  	
   

  	
  100.88

  	
  %

  
	
  2008 and thereafter

  	
   

  	
  100.00

  	
  %

  

 

In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debt Securities may be
declared, and, in certain cases, shall ipso  facto become, due and
payable, and upon any such declaration of acceleration shall become due and
payable, in each case, 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 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) change the Maturity Date of any Debt Security, or reduce the
principal amount thereof or any premium thereon, or reduce the rate (or manner
of calculation of the rate) or extend the time of payment of interest thereon,
or reduce (other than as a result of the maturity or earlier redemption of any
such Debt Security in accordance with the terms of the Indenture and such Debt
Security) or increase the aggregate principal amount of Debt Securities then
outstanding, or change any of the redemption provisions, or make the principal
thereof or any interest or premium thereon payable in any coin or currency
other than United States Dollars, or impair or affect the right of any holder
to institute suit for 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 the holders of all 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) a
default in payments due in respect of any of the Debt Securities, (b) in
respect of covenants or provisions of the Indenture which cannot be modified or
amended without the consent of the holder of each Debt Security affected, or (c) in
respect of the covenants of the Company relating to its ownership of Common
Securities of the Trust.  Any such
consent or waiver by the holder of this Debt Security (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such holder and
upon

 

A-9

 

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 make all payments due 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 holder hereof
on the Debt Security Register (as defined in the Indenture) of the Company,
upon surrender of this Debt Security for registration of transfer at the office
or agency of the Trustee in Wilmington, Delaware, or at any other office or
agency of the Company in Wilmington, Delaware or Sioux Falls, accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the 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 or the Trustee may require payment of
a sum sufficient to cover any tax, fee or other governmental charge payable in
relation thereto as specified in the Indenture.

 

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
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 the principal of and premium, if any,
and interest on this Debt Security and for all other purposes, and none of the
Company, the Trustee, any Authenticating Agent, any Paying Agent, any transfer
agent or any Debt Security registrar shall be affected by any notice to the
contrary.

 

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 different authorized denominations, as
requested by the holder surrendering the same.

 

The Debt Securities are issuable only in registered certificated form
without coupons.

 

No recourse shall be had for the payment of the principal of or
premium, if any, or 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, director, employee
or agent, past, present or future, as such, of the Company or of any
predecessor or 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, all such liability being, by the acceptance hereof and
as part of the consideration for the issuance hereof, expressly waived and
released.

 

A-10

 

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

 

THIS DEBT SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES OF SAID STATE OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.

 

A-11Exhibit 10(c)(xv)

 

August 21, 2003

 

 

Mr. Anthony R. Fabiano

4285 Quinwood Lane North

Plymouth, MN 55442

 

Dear Anthony:

 

I am pleased
to offer you the position of President and Chief Executive Officer of American
Science and Engineering, Inc., at a weekly salary of $5,400.00, beginning
Monday, September 8, 2003.  This offer
is contingent upon the satisfactory completion of background and reference
checks.

 

As a full-time
employee, you will be immediately eligible for medical, dental, short-term and
long-term disability, and life insurance benefits.  We have enclosed a schedule of benefits and employee costs.  You are also eligible to accrue 20 days of
vacation per year.

 

After six
months of employment, you will be automatically enrolled in AS&E’s 401(k)
plan with Putnam Investments which also includes a quarterly AS&E stock
match based upon your quarterly contribution level and the company’s
profitability.  Unless you opt out of
the 401(k) program, or unless you specify a different contribution amount,
three percent (3%) of your weekly earnings will be deducted from your pay,
pre-tax, and deferred into the Putnam Income Fund on your behalf.

 

In addition to
your base cash compensation, you will be immediately eligible to participate in
a cash bonus program.  The Board of
Directors has determined that your maximum bonus for FY 2004 will be $240,000,
pro rated for your period of service, assuming at-plan performance on your
part.  “At-plan” performance will be
based upon specific goals that will be established by the Board of Directors at
or near the commencement of your employment with AS&E.

 

You will be
granted an incentive stock option entitling you to purchase up to 75,000 shares
of the company’s common stock subject to the terms and conditions of AS&E’s
Stock Option Plan upon approval of the grant by the Board of Directors at its
next meeting. The vesting will occur in equal increments on each of the first
three anniversaries of the grant date. The strike price for this option will be
at the market close price on the American Stock Exchange on the grant date.

 

1

 

You will be
nominated for election to a seat on the Board of Directors following the annual
meeting on September 25, 2003.

 

The Board will
provide you with an interim performance review in January 2004, after the
results of the third quarter (ending December 31, 2003) are released. This
review will cover the four months from September 2003 through December 2003.

 

The Board will
provide you with an annual performance review and salary review at the
conclusion of FY 2004, after the results of the fourth quarter (ending March
31, 2004) are released.  This review
will cover the seven months from September 2003 through March 2004.  Thereafter, the Board will provide you with
an annual performance review and salary review at the conclusion of each fiscal
year covering the full 12 months of each fiscal year.  Any salary adjustments approved by the Board will take effect on
the first Monday in July.

 

AS&E will
reimburse you for reasonable relocation expenses up to a maximum of
$50,000.  In addition to this, you will
be reimbursed for reasonable travel and living expenses in the period prior to
your relocation, not to exceed fifteen (15) months.

 

If you are
terminated on or before March 31, 2004, you will be entitled to severance of
six (6) months of salary continuation and twelve (12) months of health
insurance continuation.  If you are
terminated after March 31, 2004, you will be entitled to twelve (12) months of
salary continuation and twelve (12) months of health insurance continuation.
AS&E also will provide you with an agreement which protects you in the
event of a change of control.

 

AS&E is an
Equal Opportunity and Affirmative Action Employer.  If you are an Individual with a Disability or a Veteran and would
like us to know about it, you can fill out the enclosed invitation and return
to AS&E or come to the Human Resources Department at any time during your
employment.

 

2

 

If you have
any questions concerning the position or our company policies, please do not
hesitate to call Ted Owens or me at 978-262-8600.

 

 

	
   

  	
  Sincerely yours,

  
	
   

  	
   

  
	
   

  	
  /s/ Roger P. Heinisch

  	
   

  
	
   

  	
   

  
	
   

  	
  Roger P. Heinisch

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Enclosures

  
	
   

  
	
   

  
	
  ACCEPTED AND AGREED:

  
	
   

  
	
  /s/ Anthony R. Fabiano

  	
   

  	
  DATE:

  	
  8/25/03

  	
   

  
	
  Anthony R. Fabiano

  
							

 

3

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