Exhibit 10.23
SECURITY AGREEMENT
This Agreement is made as of January 10, 2008 by and between First Interstate
BancSystem, Inc., a Montana corporation (the “Debtor”), and Wells Fargo Bank,
National Association, a national banking association, as administrative agent
(in such capacity, the “Secured Party”) for the Lender Parties, as defined in
the Credit Agreement described below.
Pursuant to a Credit Agreement (together with all amendments, modifications and
restatements of such agreement, the “Credit Agreement”) of even date herewith
among the Debtor, the Secured Party and various Lenders, as defined therein, the
Lenders have agreed to make advances to the Debtor.
As a condition to making any advance under the Credit Agreement, the Lender
Parties have required the execution and delivery of this Agreement by the
Debtor.
ACCORDINGLY, in consideration of the mutual covenants contained in the Credit
Agreement and herein, the parties hereby agree as follows:
1. Definitions.
     (a) Terms defined in Credit Agreement. All terms defined in the Credit
Agreement that are not otherwise defined herein shall have the meanings given
them in the Credit Agreement.
     (b) Other Definitions. The following terms have the meanings set forth
below:
     “Collateral” means all right, title and interest of the Debtor in and to
all Stock, including but not limited to all rights to payment from FIB on
account of such Stock, whether such payments represent profits, capital gains,
returns of contributed capital, or otherwise, and all other property (however
characterized) distributed to the Debtor on account of the Stock, together with
all substitutions and replacements therefor and proceeds thereof.
     “Security Interest” means the security interest granted hereunder.
     “Specified Shares” means the stock specifically identified in Exhibit B.
     “Stock” means any equity interest in FIB, whether now existing or hereafter
arising, including but not limited to the Specified Shares, and including any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest in FIB.
     “UCC” means the Uniform Commercial Code as adopted in the State of
Minnesota.
     “Voting Rights” means any and all voting rights related to or arising out
of any Stock.

 

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2. Security Interest.
The Debtor hereby grants the Secured Party a security interest in the Collateral
to secure payment of the Obligations.
3. Representations, Warranties and Agreements.
The Debtor hereby represents, warrants and agrees as follows:
     (a) Title. The Debtor (i) has title to each item of Collateral in existence
on the date hereof, including but not limited to the Specified Shares, free and
clear of all Liens, except the Security Interest, (ii) will have, at the time
the Debtor acquires any rights in Collateral hereafter arising, title to each
such item of Collateral free and clear of all Liens except the Security
Interest, (iii) will keep all Collateral free and clear of all Liens other than
the Security Interest, and (iv) will defend the Collateral against all claims or
demands of all persons other than the Secured Party. The Debtor will not sell or
otherwise dispose of the Collateral or any interest therein without the prior
written consent of the Secured Party.
     (b) Legal Name; Jurisdiction; Chief Executive Office; Organizational
Identification Number. Exhibit A hereto sets forth the Debtor’s correct legal
name, jurisdiction of organization, chief executive office, organizational
identification number issued by the jurisdiction of organization, and federal
employer identification number. The Debtor has only one state of incorporation
or organization. The Debtor will not change its name, jurisdiction of
organization or chief executive office without prior written notice to the
Secured Party.
     (c) Capital. The Specified Shares are fully paid for and nonassessable,
except to the extent that the Specified Shares may be subject to assessment
under the FDIA or the Montana Bank Act, and no capital contribution is payable
by the Debtor to FIB on a deferred payment basis as of the date hereof.
     (d) Action by FIB. Without the prior written consent of the Secured Party,
the Debtor will not consent to or permit to occur (i) any amendment of FIB’s
Organizational Documents, (ii) any issuance of Capital Stock by FIB, or
(iii) any sale, encumbrance or other transfer by FIB of all or a substantial
part of its assets (except to the extent that such sale, encumbrance or transfer
is specifically permitted by the terms of the Credit Agreement).
     (e) Delivery of Stock Certificates, Other Evidence of Collateral.
Concurrent with the execution hereof, the Debtor will deliver to the Secured
Party all certificates evidencing the Pledged Shares, together with blank stock
powers executed by the Debtor. The Debtor will (i) promptly (upon receipt)
deliver to the Secured Party, in pledge as additional Collateral, all cash,
securities, instruments, other equity interests or other proceeds or
remuneration arising in connection with any dividend, equity interest split,
recapitalization or reorganization in respect of or relating to the Collateral,
other than cash dividends paid by FIB to the Debtor while no Default or Event of
Default is outstanding, and (ii) duly endorse, in blank, each and every
certificate or instrument, if any, evidencing or constituting the same by
signing on said certificate or instrument or by

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signing a separate document of assignment or transfer, as required by the
Secured Party. Prior to any of the foregoing deliveries, the Debtor shall hold
all such certificates and instruments, if any, in trust for the benefit of the
Secured Party.
     (f) Miscellaneous Covenants. The Debtor will:

  (i)   Promptly pay all taxes and other governmental charges levied or assessed
upon or against any Collateral or upon or against the creation, perfection or
continuance of the Security Interest.     (ii)   Without limiting the effect of
Section 3(e) above, if the Secured Party at any time so requests (whether the
request is made before or after the occurrence of an Event of Default), promptly
deliver to the Secured Party any instrument, certificate, document or chattel
paper constituting Collateral, duly endorsed or assigned to the Secured Party by
the Debtor (prior to any of the foregoing deliveries, Debtor shall hold all such
instruments, certificates, documents and chattel paper in trust for the benefit
of the Secured Party);     (iii)   Pay when due or reimburse the Secured Party
on demand for all costs of collection of any of the Obligations and all other
out-of-pocket expenses (including in each case all reasonable attorneys’ fees)
incurred by the Secured Party in connection with the creation, perfection,
satisfaction, protection, defense or enforcement of the Security Interest or the
creation, continuance, protection, defense or enforcement of this Agreement or
any or all of the Obligations, including expenses incurred in any litigation or
bankruptcy or insolvency proceedings.     (iv)   Execute, deliver or endorse any
and all assignments, security agreements, control agreements and other
agreements and writings which the Secured Party may at any time reasonably
request in order to secure, protect, perfect or enforce the Security Interest
and the Secured Party’s rights under this Agreement.     (v)   Not use or keep
any Collateral, or permit it to be used or kept, for any unlawful purpose or in
violation of any federal, state or local law, statute or ordinance.     (vi)  
Not amend or terminate any financing statement naming the Secured Party as
secured party except upon written prior authorization of the Secured Party.

     (g) Secured Party’s Right to Take Action. If the Debtor at any time fails
to perform or observe any agreement contained in Section 3(a)(iii), 3(a)(iv) or
3(f) or fails to make any endorsement required in Section 3(e), and if such
failure continues for a period of ten calendar days after the Secured Party
gives the Debtor written notice thereof (or, in the case of the agreements
contained in Sections 3(a)(iv), 3(e) or 3(f)(iv), immediately upon the
occurrence of such failure, without notice or lapse of time), the Secured Party
may (but need not) perform or observe such agreement on behalf and in

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the name, place and stead of the Debtor (or, at the Secured Party’s option, in
the Secured Party’s own name) and may (but need not) take any and all other
actions which the Secured Party may reasonably deem necessary to cure or correct
such failure (including, without limitation the payment of taxes, the
satisfaction of Liens and the endorsement of instruments,); and, except to the
extent that the effect of such payment would be to render any loan or
forbearance of money usurious or otherwise illegal under any applicable law, the
Debtor shall thereupon pay the Secured Party on demand the amount of all moneys
expended and all costs and expenses (including reasonable attorneys’ fees)
incurred by the Secured Party in connection with or as a result of the Secured
Party’s performing or observing such agreements or taking such actions, together
with interest thereon from the date expended or incurred by the Secured Party at
the highest rate then applicable to any of the Obligations. To facilitate the
performance or observance by the Secured Party of such agreements of the Debtor,
the Debtor hereby irrevocably appoints (which appointment is coupled with an
interest) the Secured Party, or its delegate, as the attorney-in-fact of the
Debtor with the right (but not the duty) from time to time to create, prepare,
complete, execute, deliver, endorse or file, in the name and on behalf of the
Debtor, any and all instruments, documents, financing statements, applications
for insurance and other agreements and writings required to be obtained,
executed, delivered or endorsed by the Debtor under this Section 3 and
Section 5.
4. Financing Statements.
The Secured Party may (and the Debtor hereby authorizes the Secured Party to)
execute and file such financing statements and other documents as the Secured
Party may at any time deem appropriate to perfect the Security Interest. Without
limiting the generality of the foregoing, the Debtor authorizes, ratifies and
approves any financing statement filed by the Secured Party on or prior to the
date of this Agreement.
5. Rights of Secured Party.
At any time and from time to time, after the occurrence and during the
continuance of an Event of Default, the Secured Party may (i) notify FIB as
issuer of the Stock to make payments and other distributions thereon directly to
the Secured Party, (ii) receive all proceeds of the Stock to satisfy the
Obligations, and (iii) hold any increase or profits received from the Stock as
additional security for the Obligations, except that any money received from the
Collateral may, at the Secured Party’s option, be applied in reduction of the
Obligations in such order of application as the Secured Party may determine. The
Debtor hereby irrevocably authorizes and directs FIB and the officers and
managers thereof, following request by the Secured Party at any time, to remit
any and all money, distributions and other property described in this paragraph
directly to the Secured Party in the Secured Party’s name alone. To the extent
that such remittances are made directly to the Secured Party, the remitting
entity shall have no further liability to the Debtor for the same.
6. Remedies upon Event of Default.
Upon the occurrence of an Event of Default and at any time thereafter, the
Secured Party may exercise any one or more of the following rights and remedies:
(a) exercise and enforce any or all rights and remedies available upon default
to a secured party under the UCC, including but

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not limited to the right to take possession of any Collateral, proceeding
without judicial process or by judicial process (without a prior hearing or
notice thereof, which the Debtor hereby expressly waives), and the right to
sell, lease or otherwise dispose of any or all of the Collateral, and if notice
to the Debtor of any intended disposition of Collateral or any other intended
action is required by law in a particular instance, such notice shall be deemed
commercially reasonable if given (in the manner specified in Section 7) at least
10 calendar days prior to the date of intended disposition or other action;
(b) exercise all Voting Rights; and (c) exercise or enforce any or all other
rights or remedies available to the Secured Party by law or agreement against
the Collateral, against the Debtor or against any other person or property. The
rights granted under this Section shall include the right to offer and sell any
Stock or similar Collateral privately to purchasers who will agree to take the
Collateral for investment and not with a view to distribution and who will agree
to the imposition of any restrictive legends on the certificates representing
the Collateral, and the right to arrange for a sale which would otherwise
qualify as exempt from registration under the Securities Act of 1933. The
Secured Party is hereby granted a nonexclusive, worldwide and royalty-free
license (but only to the extent of the Debtor’s rights) to use or otherwise
exploit all trademarks, trade secrets, franchises, copyrights and patents of the
Debtor that the Secured Party deems necessary or appropriate to the disposition
of any Collateral.
7. Notices.
All notices and other communications hereunder shall be in writing and shall be
delivered, and deemed delivered, in accordance with the Credit Agreement.
8. Requests for Accounting.
All requests under Section 9-210 of the UCC (i) shall be made in a writing
signed by an authorized person, (ii) shall be personally delivered, sent by
registered or certified mail, return receipt requested, or by overnight courier
of national reputation (iii) shall be deemed to be sent when received by the
Secured Party and (iv) shall otherwise comply with the requirements of Section
9-210 of the UCC. The Debtor requests that the Secured Party respond to all such
requests which on their face appear to come from an authorized individual and
releases the Secured Party from any liability for so responding. The Debtor
shall pay the Secured Party the maximum amount allowed by law for responding to
such requests.
9. Secured Party’s Obligations.
The Secured Party’s duty of care with respect to Collateral in its possession
(as imposed by law) shall be deemed fulfilled if the Secured Party exercises
reasonable care in physically safekeeping such Collateral or, in the case of
Collateral in the custody or possession of a bailee or other third person,
exercises reasonable care in the selection of the bailee or other third person,
and the Secured Party need not otherwise preserve, protect, insure or care for
any Collateral. The Secured Party shall not be obligated to preserve any rights
the Debtor may have against prior parties, to realize on the Collateral at all
or in any particular manner or order, or to apply any cash proceeds of
Collateral in any particular order of application.

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10. Waiver; Cumulative Remedies.
This Agreement can be waived, modified, amended, terminated or discharged, and
the Security Interest can be released, only explicitly in a writing signed by
the Secured Party. A waiver signed by the Secured Party shall be effective only
in the specific instance and for the specific purpose given. Mere delay or
failure to act shall not preclude the exercise or enforcement of any of the
Secured Party’s rights or remedies. All rights and remedies of the Secured Party
shall be cumulative and may be exercised singularly or concurrently, at the
Secured Party’s option, and the exercise or enforcement of any one such right or
remedy shall neither be a condition to nor bar the exercise or enforcement of
any other.
11. Binding Effect.
This Agreement has been duly and validly authorized by all necessary action of
the Debtor. This Agreement shall be binding upon and inure to the benefit of the
Debtor and the Secured Party and their respective successors and assigns and
shall take effect when signed by the Debtor and delivered to the Secured Party.
12. Governing Law.
This Agreement shall be governed by the internal law of Minnesota.
13. Severability.
If any provision or application of this Agreement is held unlawful or
unenforceable in any respect, such illegality or unenforceability shall not
affect other provisions or applications which can be given effect and this
Agreement shall be construed as if the unlawful or unenforceable provision or
application had never been contained herein or prescribed hereby.
14. Survival.
All representations and warranties contained in this Agreement shall survive the
execution, delivery and performance of this Agreement and the creation and
payment of the Obligations.
15. Counterparts.
This Agreement may be executed in any number of counterparts, each of which when
so executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.
Signature pages follow

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.

            FIRST INTERSTATE BANCSYSTEM, INC.
      By:   /s/ TERRILL R. MOORE         Name:   Terrill R. Moore       
Title:   Executive Vice President and Chief Financial
   Officer     

Signature page to Security Agreement

 

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            WELLS FARGO BANK, NATIONAL
     ASSOCIATION, as administrative agent
      By:   /s/ CYNTHIA M. SPAGNOLA         Name:   Cynthia M. Spagnola       
Title:   Vice President     

Signature page to Security Agreement

 

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Exhibit A
Debtor Information

                              Organizational   Federal Employer     Jurisdiction
of       Identification   Identification Legal Name   Organization   Chief
Executive Office   Number   Number
 
      401 N. 31st Street        
First Interstate BancSystem, Inc.
  Montana   Suite 1800   D036089   81-0331430
 
      Billings, MT 59101        

A-1

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Exhibit B
Specified Shares
500,000 shares of common stock of First Interstate Bank, a Montana state bank,
evidenced by certificate No. 6.

B-1