exv10w24



 





Exhibit 10.24



 





Credit Agreement

Re: Subordinated Term Note




Dated as of

January 10, 2008




between




First Interstate BancSystem, Inc.



and




First
Midwest Bank




 


 









 







Table
of Contents




	 	 	 	 	 	 	 
	Section	 	Description	 	Page
	Section
1.
	 	The
Credits	 	 	1	 
	 
	 	 	 	 	 	 
	Section 1.1.
	 	Term Loan	 	 	1	 
	Section 1.2.
	 	Manner and Disbursement of Loans	 	 	1	 
	 
	 	 	 	 	 	 
	Section
2.
	 	Interest
and Change In Circumstances	 	 	1	 
	 
	 	 	 	 	 	 
	Section 2.1.
	 	Interest Rate Options	 	 	1	 
	Section 2.3.
	 	Computation of Interest	 	 	2	 
	Section 2.3.
	 	Taxes and Increased Costs	 	 	2	 
	Section 2.9.
	 	Funding Indemnity	 	 	3	 
	 
	 	 	 	 	 	 
	Section
3.
	 	Fees,
Prepayments, Terminations and Applications	 	 	3	 
	 
	 	 	 	 	 	 
	Section 3.1.
	 	Voluntary Prepayments	 	 	3	 
	Section 3.2.
	 	Place and Application of Payments	 	 	4	 
	Section 3.3.
	 	Notations	 	 	4	 
	 
	 	 	 	 	 	 
	Section
4.
	 	Definitions;
Interpretation	 	 	4	 
	 
	 	 	 	 	 	 
	Section 4.1.
	 	Definitions	 	 	4	 
	Section 4.2.
	 	Interpretation	 	 	7	 
	 
	 	 	 	 	 	 
	Section
5.
	 	Representations
and Warranties	 	 	7	 
	 
	 	 	 	 	 	 
	Section 5.1.
	 	Organization and Qualification	 	 	8	 
	Section 5.2.
	 	Corporate Authority and Validity of Obligations	 	 	8	 
	Section 5.3.
	 	Use of Proceeds	 	 	8	 
	Section 5.4.
	 	Financial Reports	 	 	8	 
	Section 5.5.
	 	No Material Adverse Change	 	 	8	 
	Section 5.6.
	 	Full Disclosure	 	 	8	 
	Section 5.7.
	 	Governmental Authority and Licensing	 	 	9	 
	Section 5.8.
	 	Approvals	 	 	9	 
	Section 5.9.
	 	Affiliate Transactions	 	 	9	 
	Section 5.10.
	 	Compliance with Laws	 	 	9	 
	Section 5.11.
	 	Other Agreements	 	 	9	 
	Section 5.12.
	 	No Default	 	 	9	 
	 
	 	 	 	 	 	 
	Section
6.
	 	Conditions
Precedent	 	 	10	 
	 
	 	 	 	 	 	 
	Section
7.
	 	Covenants	 	 	11	 
	 
	 	 	 	 	 	 
	Section 7.1.
	 	Maintenance of Business	 	 	11	 
	Section 7.2.
	 	Financial Reports	 	 	11	 
	Section 7.3.
	 	Inspection	 	 	12	 






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	Section	 	Description	 	Page
	Section 7.4.
	 	Compliance with Laws	 	 	13	 
	Section 7.5.
	 	Burdensome Contracts With Affiliates	 	 	13	 
	Section 7.6.
	 	No Changes in Fiscal Year	 	 	13	 
	 
	 	 	 	 	 	 
	Section 8.
	 	Events
of Default and Remedies	 	 	13	 
	 
	 	 	 	 	 	 
	Section 8.1.
	 	Events of Default	 	 	13	 
	Section 8.2.
	 	Non-Bankruptcy Defaults	 	 	15	 
	Section 8.3.
	 	Bankruptcy Defaults	 	 	15	 
	 
	 	 	 	 	 	 
	Section 9.
	 	Miscellaneous	 	 	15	 
	 
	 	 	 	 	 	 
	Section 9.1.
	 	Non-Business Day	 	 	15	 
	Section 9.2.
	 	No Waiver, Cumulative Remedies	 	 	15	 
	Section 9.3.
	 	Amendments, Etc	 	 	15	 
	Section 9.4.
	 	Costs and Expenses; Indemnification	 	 	15	 
	Section 9.5.
	 	Documentary Taxes	 	 	16	 
	Section 9.6.
	 	Survival of Representations	 	 	16	 
	Section 9.7.
	 	Survival of Indemnities	 	 	16	 
	Section 9.8.
	 	Notices	 	 	16	 
	Section 9.9.
	 	Construction	 	 	17	 
	Section 9.10.
	 	Headings	 	 	17	 
	Section 9.11.
	 	Severability of Provisions	 	 	17	 
	Section 9.12.
	 	Counterparts	 	 	17	 
	Section 9.13.
	 	Binding Nature, Governing Law, Etc	 	 	17	 
	Section 9.14.
	 	Submission to Jurisdiction; Waiver of Jury Trial	 	 	18	 
	Section 9.15.
	 	USA Patriot Act	 	 	18	 
	 
	 	 	 	 	 	 
	Signature
	 	 	 	 	19	 






	 	 	 	 	 
	Exhibit A

	 	—
	 	Term Note
	Exhibit B

	 	—
	 	Compliance Certificate






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Credit Agreement

Re: Subordinated Term Note




First Midwest Bank

Itasca, Illinois




Ladies and Gentlemen:




     The undersigned, First Interstate BancSystem, Inc., a Montana corporation (the “Borrower”),
applies to you (“FMB”) for your commitment, subject to the terms and conditions hereof and on the
basis of the representations and warranties hereinafter set forth, to extend credit to the
Borrower, all as more fully hereinafter set forth. All capitalized terms used herein without
definition shall have the same meanings herein as such terms are defined in Section  4.1 hereof.



Section
1. The Credits.




     Section  1.1. Term Loan. Subject to the terms and conditions hereof, FMB agrees to make a
subordinated term loan to the Borrower in the principal amount of $20,000,000 (the “Term Loan” or
the “Loan”). The Term Loan shall be made on the date hereof. The Term Loan shall be made against
and evidenced by a subordinated promissory note of the Borrower in the form (with appropriate
insertions) attached hereto as Exhibit  A (the “Term Note” or the “Note”). The Term Note shall be
dated the date of issuance thereof and be expressed to bear interest as set forth in Section  2
hereof. The Term Note, and the Term Loan evidenced thereby, shall mature and all principal not
sooner paid shall be due and payable on January  9, 2018 (the
“Term Loan Final Maturity Date”), the final maturity thereof.



     Section  1.2. Manner and Disbursement of Loans. The Borrower agrees that FMB may rely upon any
written or telephonic notice given by any person FMB in good faith believes is an Authorized
Representative without the necessity of independent investigation and, in the event any telephonic
notice conflicts with the written confirmation, such telephonic notice shall govern if FMB has
acted in reliance thereon. Subject to the provisions of Section  6 hereof, the proceeds of the Loan
shall be made available to the Borrower at the principal office of FMB in Itasca, Illinois, in
immediately available funds.



Section
2. Interest and Change In Circumstances.




     Section  2.1. Interest Rate Options.



          The outstanding principal balance of the Term Loan shall bear interest at the rate of 6.81%
per annum. Interest on the Term Loan shall be payable quarterly in arrears on the last day of each
March, June, September and December (commencing March 31, 2008) and at maturity of the Note
(whether by lapse of time, acceleration, or otherwise), and interest after maturity shall be due
and payable upon demand.




 









 








     Section  2.2. Computation of Interest. All interest on the Note shall be computed on the basis
of a year of 360 days for the actual number of days elapsed.



     Section  2.3. Taxes and Increased Costs. (a) If FMB shall determine that any change in any
applicable law, treaty, regulation, or guideline (including, without limitation, Regulation D of
the FRB), or any new law, treaty, regulation, or guideline, or any interpretation of any of the
foregoing, by any governmental authority charged with the administration thereof or any central
bank or other fiscal, monetary, or other authority having jurisdiction over FMB or its lending
branch shall:




     (i) impose, increase, or deem applicable any reserve, special deposit, or similar
requirement against assets held by, or deposits in or for the account of, or loans by, or
any other acquisition of funds or disbursements by, FMB which is not in any instance
already accounted for in computing the interest rate applicable to the Term Loan;




     (ii) subject FMB to any tax (including, without limitation, any United States interest
equalization tax or similar tax however named applicable to the acquisition or holding of
debt obligations and any interest or penalties with respect thereto), duty, charge, stamp
tax, fee, deduction, or withholding in respect of this Agreement or the Term Note, except
such taxes as may be measured by the overall net income or gross receipts of FMB or its
lending branches and imposed by the jurisdiction, or any political subdivision or taxing
authority thereof, in which FMB’s principal executive office or its lending branch is
located;




     (iii) change the basis of taxation of payments of principal and interest due from the
Borrower to FMB hereunder or under the Term Note (other than by a change in taxation of the
overall net income or gross receipts of FMB); or




     (iv) impose on FMB any penalty with respect to the foregoing or any other condition
regarding this Agreement, or its disbursement, or the Term Note;


and FMB shall determine that the result of any of the foregoing is to increase the cost (whether by
incurring a cost or adding to a cost) to FMB of the Term Loan hereunder or to reduce the amount of
principal or interest received or receivable by FMB (without benefit of, or credit for, any
prorations, exemption, credits, or other offsets available under any such laws, treaties,
regulations, guidelines, or interpretations thereof), then the Borrower shall pay on demand to FMB
from time to time as specified by FMB such additional amounts as FMB shall reasonably determine are
sufficient to compensate and indemnify it for such increased cost or reduced amount. If FMB makes
such a claim for compensation, it shall provide to the Borrower a certificate setting forth the
computation of the increased cost or reduced amount as a result of any event mentioned herein in
reasonable detail and such certificate shall be conclusive if reasonably determined.




     (b) Reimbursement. If FMB determines, in its sole discretion, that it has received a refund of
any taxes as to which it has been indemnified by the Borrower or with respect to which



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the Borrower has paid additional amounts pursuant to this Section  2.3, it shall pay to the
Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section  2.3 with respect to the taxes giving
rise to such refund), net of all out-of-pocket expenses of such FMB, and without interest (other
than any interest paid by the relevant governmental authority with respect to such refund),
provided that the Borrower, upon the request of FMB, agrees to repay the amount paid over to the
Borrower (plus any penalties, interest or other charges imposed by the relevant governmental
authority) to FMB in the event FMB is required to repay such refund to such governmental authority.
This paragraph shall not be construed to require FMB to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to the Borrower or any other
Person.




     Section  2.4. Funding Indemnity. If the Borrower prepays any principal amount of the Term
Loan before its scheduled due date (whether as the result of acceleration, voluntary prepayment, or
otherwise), then the Borrower hereby promise to pay to FMB a funding indemnity equal to the
applicable Make-Whole Amount. For purposes hereof, the “Make-Whole Amount” means, in connection
with the prepayment of any portion of the Term Loan, whether by acceleration or otherwise, the
amount determined by FMB, equal to the difference, if any (but not below zero), between (i) the 
discounted cash flow of the installments of principal that have been prepaid together with interest
scheduled to accrue thereon as determined as of the date of the prepayment, minus (ii)   the
aggregate principal amount of the Term Loan that has been prepaid. In determining the discounted
cash flow, the discount rate to be applied shall be the U.S. Treasury Rate with a maturity similar
to the weighted average life of the principal amount of the Term Loan which is being prepaid. The
discounted cash flow shall be calculated in accordance with accepted financial practice and on the
same periodic basis as payments on the Term Loan are payable. For purposes of this definition,
“U.S. Treasury Rate” shall be determined by reference to the yields for U.S. Treasury Notes as
indicated (currently on page “678” thereof) on the Telerate Access Service for actively traded U.S.
Treasury Notes at approximately 10:00  A.M. (New York City time) on the bank business day preceding
such date of prepayment or, if such yield shall not be reported as of such time or the yields
reported as of such time are not ascertainable, then the “U.S. Treasury Rate” shall be determined
by reference to the most recent Federal Reserve Statistical Release H.15(519) which has become
publicly available at least two bank business days prior to such date of prepayment and which shall
be the most recent weekly average yield on actively traded U.S. Treasury Notes adjusted to a
constant maturity equal to the remaining weighted average life of the outstanding principal amount
of the Term Loan which is being prepaid.



Section 
3. Prepayments, Terminations and Applications.




     Section  3.1. Voluntary Prepayments. So long as the Borrower has not received a notice from
the FRB with contrary instructions, the Borrower shall have the privilege of prepaying the Term
Loan in whole or in part at any time upon prior notice to FMB (such notice if received subsequent
to 11:00   a.m. (Chicago time) on a given day to be treated as though received at the opening of
business on the next Business Day) by paying to FMB the principal amount to be prepaid and accrued
interest thereon to the date of prepayment plus any amounts due FMB under Section  2.4 hereof.



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     Section  3.2. Place and Application of Payments. All payments of principal, interest, fees,
and all other Obligations payable under the Loan Documents shall be made to FMB at its office at
One Pierce Place, Itasca, Illinois (or at such other place as FMB may specify) no later than 1:00 p.m. (Chicago time) on the date any such payment is due and payable. Payments received by FMB after
1:00  p.m. (Chicago time) shall be deemed received as of the opening of business on the next
Business Day. All such payments shall be made in lawful money of the United States of America, in
immediately available funds at the place of payment, without set-off or counterclaim and without
reduction for, and free from, any and all present or future taxes, levies, imposts, duties, fees,
charges, deductions, withholdings, restrictions, and conditions of any nature imposed by any
government or any political subdivision or taxing authority thereof (but excluding any taxes
imposed on or measured by the net income of FMB). No amount repaid on the Term Note may be
reborrowed.



     Section  3.3. Notations. The Loan made against the Note shall be recorded by FMB on its books
and records or, at its option in any instance, endorsed on a schedule to the Note and the unpaid
principal balance and status, rates and Interest Periods so recorded or endorsed by FMB shall be
prima facie evidence in any court or other proceeding brought to enforce the Note of the principal
amount remaining unpaid thereon, the status of the Loan evidenced thereby and the interest rates
and Interest Periods applicable thereto; provided that the failure of FMB to record any of the
foregoing shall not limit or otherwise affect the obligation of the Borrower to repay the principal
amount of the Note together with accrued interest thereon.



Section
4.  Definitions; Interpretation.




     Section  4.1. Definitions. The following terms when used herein shall have the following meanings:



     “Affiliate” means any Person directly or indirectly controlling or controlled by, or under
direct or indirect common control with, another Person. A Person shall be deemed to control another
Person for the purposes of this definition if such Person possesses, directly or indirectly, the
power to direct, or cause the direction of, the management and policies of the other Person,
whether through the ownership of voting securities, common directors, trustees or officers, by
contract or otherwise; provided that, in any event for purposes of this definition, any Person that
owns, directly or indirectly, 5% or more of the securities having the ordinary voting power for the
election of directors or governing body of a corporation or 5% or more of the partnership or other
ownership interests of any other Person (other than as a limited partner of such other Person) will
be deemed to control such corporation or other Person.



     “Agreement” means this Credit Agreement re: Subordinated Term Note, as the same may be
amended, modified, supplemented or restated from time to time in accordance with the terms hereof.



     “Authorized Representative” means those persons shown on the list of officers provided by the
Borrower pursuant to Section  6(d)(vi) hereof or on any update of any such list provided by the
Borrower to FMB, or any further or different officer of the Borrower so named by any Authorized
Representative of the Borrower in a written notice to FMB.



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     “Bank Subsidiary” means a Subsidiary of the Borrower that is organized as a bank under the
laws of the United States or any state thereof.



     “Borrower” is defined in the introductory paragraph hereof.



     “Business Day” means any day other than a Saturday or Sunday on which FMB is not authorized or
required to close in Chicago, Illinois.



     “Capital Lease” means any lease of Property which in accordance with GAAP is required to be
capitalized on the balance sheet of the lessee.



     “Capitalized Lease Obligation” means, for any Person, the amount of the liability shown on the
balance sheet of such Person in respect of a Capital Lease determined in accordance with GAAP.



     “Closing Date” means the date of this Agreement or such later Business Day upon which each
condition described in Section  6 shall be satisfied or waived in a manner acceptable to the
Administrative Agent in its discretion.



     “Default” means any event or condition the occurrence of which would, with the passage of time
or the giving of notice, or both, constitute an Event of Default.



     “Event of Default” means any event or condition identified as such in Section  8.1 hereof.


     “FDIC” means the Federal Deposit Insurance Corporation.



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



     “FMB” is defined in the introductory paragraph hereof.



     “GAAP” means generally accepted accounting principles set forth from time to time in the
opinions and pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of the date of
determination.



     “Indebtedness for Borrowed Money” means for any Person (without duplication) (a)  all
indebtedness created, assumed or incurred in any manner by such Person representing money borrowed
(including by the issuance of debt securities), (b)  all indebtedness for the deferred purchase
price of property or services (other than trade accounts payable arising in the ordinary course of
business), (c)  all indebtedness secured by any Lien upon Property of such Person, whether or not
such Person has assumed or become liable for the payment of such indebtedness, (d)  all
Capitalized Lease Obligations of such Person, and (e) all obligations of such Person on or with
respect to letters of credit, bankers’ acceptances and other extensions of credit whether or not
representing obligations for borrowed money.



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     “Loan Documents” means this Agreement, the Note, and each other instrument or document to be
delivered hereunder or thereunder or otherwise in connection therewith.



     “Material Adverse Effect” means (a) a material adverse change in, or material adverse effect
upon, the operations, business, Property, condition (financial or otherwise) or prospects of the
Borrower or of the Borrower and its Subsidiaries taken as a whole, (b) a material impairment of
the ability of the Borrower or any Subsidiary to perform its material obligations under any Loan
Document, or (c) a material adverse effect upon the legality, validity, binding effect or
enforceability against the Borrower of any Loan Document or the rights and remedies of FMB
thereunder.



     “Note” means the Term Note.



     “Obligations” means all obligations of the Borrower to pay principal and interest on the Term
Loan, all fees and charges payable hereunder, and all other payment obligations of the Borrower
arising under or in relation to any Loan Document, in each case whether now existing or hereafter
arising, due or to become due, direct or indirect, absolute or contingent, and howsoever evidenced,
held, or acquired.



     “Person” means an individual, partnership, corporation, limited liability company,
association, trust, unincorporated organization, or any other entity or organization, including a
government or agency or political subdivision thereof.



     “Property” means, as to any Person, all types of real, personal, tangible, intangible or mixed
property owned by such Person whether or not included in the most recent balance sheet of such
Person and its subsidiaries under GAAP.



     “Senior Debt” means, with respect to the Borrower (i) the principal, premium, if any, and
interest in respect of (A) Indebtedness for Borrowed Money of the Borrower and (B) indebtedness
evidenced by securities, debentures, notes, bonds or other similar instruments issued by the
Borrower; (ii) all Capitalized Lease Obligations of the Borrower; (iii) all obligations of the
Borrower issued or assumed as the deferred purchase price of property, all conditional sale
obligations of the Borrower and all obligations of the Borrower under any title retention agreement
(but excluding trade accounts payable arising in the ordinary course of business); (iv) all
obligations of the Borrower 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 Borrower 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 Borrower (whether or not such
obligation is assumed by the Borrower), whether incurred on or prior to the date of the Agreement
or thereafter incurred, unless, with the prior approval of the FRB 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 Note. Senior Debt shall not include any



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debt securities, and guarantees in respect of such debt securities, issued by Borrower to any trust
(or a trustee of such trust), partnership or other entity affiliated with the Borrower that is a
financing vehicle of the Borrower (a “financing entity”), in connection with the issuance by such
financing entity of equity securities or other securities that are treated or intended to be
treated as Tier  1 or Tier 2 capital for regulatory capital purposes.




     “Subsidiary” means, as to any particular parent corporation or organization, any other
corporation or organization more than 50% of the outstanding Voting Stock of which is at the time
directly or indirectly owned by such parent corporation or organization or by any one or more other
entities which are themselves subsidiaries of such parent corporation or organization. Unless
otherwise expressly noted herein, the term “Subsidiary” means a Subsidiary of the Borrower or of
any of its direct or indirect Subsidiaries.



     “Term Loan” is defined in Section  1.1 hereof.



     “Term Loan Final Maturity Date” is defined in Section  1.1 hereof.



     “Term Note” is defined in Section  1.1 hereof.



     “Unpermitted Change of Control” means any merger or consolidation to which the Borrower or any
Bank Subsidiary is a party where (a)   such merger or consolidation was not at the direction of the
FRB, and (b) the surviving entity (i) with respect to any merger or
consolidation of a Bank Subsidiary,  is
not a bank which is subject to FDIC supervision, (ii) with
respect to the any merger or consolidation of the Borrower,  has not assumed the obligations and
liabilities of the Borrower hereunder or (iii)  will be in default under this Agreement.



     “Voting Stock” of any Person means capital stock or other equity interests of any class or
classes (however designated) having ordinary power for the election of directors or other similar
governing body of such Person, other than stock or other equity interests having such power only by
reason of the happening of a contingency.



     Section  4.2. Interpretation. The foregoing definitions are equally applicable to both the
singular and plural forms of the terms defined. The words “hereof”, “herein”, and “hereunder” and
words of like import when used in this Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement. All references to time of day herein are references
to Chicago, Illinois time unless otherwise specifically provided. Where the character or amount of
any asset or liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the purposes of this
Agreement, it shall be done in accordance with GAAP except where such principles are inconsistent
with the specific provisions of this Agreement.



Section
5.  Representations and Warranties.




     The Borrower represents and warrants to FMB as follows:



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     Section  5.1. Organization and Qualification. The Borrower is duly organized, validly
existing, and in good standing as a corporation under the laws of Montana, has full and adequate
power to own its Property and conduct its business as now conducted, and is duly licensed or
qualified and in good standing in each jurisdiction in which the nature of the business conducted
by it or the nature of the Property owned or leased by it requires such licensing or qualifying
where the failure to do so could reasonably be expected to have a Material Adverse Effect.



     Section  5.2. Authority and Validity of Obligations. The Borrower has full right and authority
to enter into this Agreement and the other Loan Documents, to make the borrowings herein provided
for, to issue its Note in evidence thereof, and to perform all of its obligations hereunder and
under the other Loan Documents. The Loan Documents delivered by the Borrower have been duly
authorized, executed, and delivered by the Borrower and constitute valid and binding obligations of
the Borrower enforceable in accordance with their terms except as enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, or similar laws affecting creditors’ rights
generally and general principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law); and this Agreement and the other
Loan Documents do not, nor does the performance or observance by the Borrower of any of the matters
and things herein or therein provided for, (a) contravene or constitute a default under any
provision of law or any judgment, injunction, order or decree binding upon the Borrower or any
provision of the articles of incorporation or by-laws of the Borrower or any covenant, indenture or
agreement of or affecting the Borrower or any of its Property, or (b) result in the creation or
imposition of any Lien on any Property of the Borrower.



     Section  5.3. Use of Proceeds. The Borrower shall use the entire proceeds of the Term Loan for
legal and proper purposes as are consistent with applicable law, including but not limited to, the
acquisition by the Borrower of all the issued and outstanding equity of The First Western Bank,
Sturgis, South Dakota and First Western Bank, Wall, South Dakota.



     Section  5.4.
Financial Reports. The statements of condition of the Borrower as at
December  31,
2005 and December  31,
2006, and of earnings of the Borrower for the fiscal year
ended December  31, 2006 heretofore furnished to FMB, are complete and correct in all material
respects and have been prepared in conformity with GAAP. Such financial statements fairly present
the financial condition of the Borrower as at the respective dates thereof and the statements of
earnings fairly present the results of the operations of the Borrower for the respective periods
covered thereby.



     Section  5.5.
No Material Adverse Change. Since December  31, 2006, there has been no
change in the condition (financial or otherwise) or business prospects of the Borrower or the
Borrower and its Subsidiaries except those occurring in the ordinary course of business, none of
which individually or in the aggregate have been materially adverse.



     Section  5.6. Full Disclosure. The statements and information furnished to FMB in connection
with the negotiation of this Agreement and the other Loan Documents and the commitment by FMB to
provide all or part of the financing contemplated hereby do not contain any untrue statements of a
material fact or omit a material fact necessary to make the material statements contained herein or
therein not misleading, FMB acknowledging that, as to any



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projections furnished to FMB, the Borrower only represents that the same were prepared on the basis
of information and estimates the Borrower believed to be reasonable.




     Section  5.7. Governmental Authority and Licensing. The Borrower has received all licenses,
permits, and approvals of all federal, state, local, and foreign governmental authorities, if any,
necessary to conduct their businesses, in each case where the failure to obtain or maintain the
same could reasonably be expected to have a Material Adverse Effect. No investigation or proceeding
which, if adversely determined, could reasonably be expected to result in revocation or denial of
any material license, permit or approval is pending or, to the knowledge of the Borrower,
threatened. The Borrower has not received any notice from the FRB which would prevent the Borrower
from prepaying the Note or paying the Note at maturity.



     Section  5.8. Approvals. No authorization, consent, license, or exemption from, or filing or
registration with, any court or governmental department, agency, or instrumentality, nor any
approval or consent of any other Person, is or will be necessary to the valid execution, delivery,
or performance by the Borrower of any Loan Document, except for such approvals which have been
obtained prior to the date of this Agreement and remain in full force and effect.



     Section  5.9. Affiliate Transactions. The Borrower is not a party to any contracts or
agreements with any of its Affiliates on terms and conditions which are less favorable to the
Borrower than would be usual and customary in similar contracts or agreements between Persons not
affiliated with each other.



     Section  5.10. Compliance with Laws. The Borrower is in compliance with the requirements of
all federal, state and local laws, rules and regulations applicable to or pertaining to their
Property or business operations (including, without limitation, the Occupational Safety and Health
Act of 1970, the Americans with Disabilities Act of 1990, and laws and regulations establishing
quality criteria and standards for air, water, land and toxic or hazardous wastes and substances),
non-compliance with which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. The Borrower has not received notice to the effect that its operations are
not in compliance with any of the requirements of applicable federal, state or local environmental,
health and safety statutes and regulations or are the subject of any governmental investigation
evaluating whether any remedial action is needed to respond to a release of any toxic or hazardous
waste or substance into the environment, which non-compliance or remedial action, individually or
in the aggregate, could reasonably be expected to have a Material Adverse Effect.



     Section  5.11. Other Agreements. The Borrower is not in default under the terms of any
covenant, indenture or agreement of or affecting the Borrower or any of its Property, which default
if uncured could reasonably be expected to have a Material Adverse Effect.



     Section  5.12. No Default. No Default or Event of Default has occurred and is continuing.



-9-









 





Section
6.  Conditions Precedent.




     The obligation of FMB to make the Term Loan under this Agreement is subject to the following
conditions precedent:




     (a) each of the representations and warranties set forth in Section  5 hereof and in
the other Loan Documents shall be true and correct as of such time, except to the extent
the same expressly relate to an earlier date;




     (b) the Borrower shall be in compliance with the terms and conditions of the Loan
Documents, and no Default or Event of Default shall have occurred and be continuing or
would occur as a result of making such extension of credit;




     (c) such extension of credit shall not violate any order, judgment, or decree of any
court or other authority or any provision of law or regulation applicable to FMB
(including, without limitation, Regulation  U of the FRB) as then in effect.




     (d) FMB shall have received the following (and, with respect to all documents, each to
be properly executed and completed) and the same shall have been approved as to form and
substance by FMB:




     (i) this Agreement;




     (ii) the Note;




     (iii) copies (executed or certified as may be appropriate) of resolutions
of the Board of Directors or other governing body of the Borrower authorizing the
execution, delivery, and performance of the Loan Documents;




     (iv) articles of incorporation of the Borrower certified by the appropriate
governmental office of the state of its organization;




     (v) by-laws for the Borrower certified by an appropriate officer of such Person
acceptable to FMB;




     (vi) an incumbency certificate containing the name, title and genuine signature of the
Borrower’s Authorized Representatives;




     (vii) a good standing certificate for the Borrower dated as of a date no earlier than
30 days prior to the date hereof, from the appropriate governmental offices;



     (e) legal matters incident to the execution and delivery of the Loan Documents and to the
transactions contemplated hereby shall be satisfactory to FMB and its counsel; and FMB shall have
received the favorable written opinion of counsel for the Borrower in form and substance
satisfactory to FMB and its counsel;



-10-









 






     (f) FMB shall have received such evaluations and certifications, and shall have
conducted such due diligence, as it may reasonably require in order to satisfy itself as to
the financial condition of the Borrower and its Subsidiaries, and the lack of material
contingent liabilities of the Borrower and its Subsidiaries; and




     (g) FMB shall have received such other agreements, instruments, documents,
certificates and opinions as FMB may reasonably request.



Section
7. Covenants.




     The Borrower agrees that, so long as any credit is available to or in use by the Borrower
hereunder, except to the extent compliance in any case or cases is waived in writing by FMB:



     Section  7.1. Maintenance of Business. The Borrower shall, and shall cause each Bank
Subsidiary to, preserve and maintain its existence; provided, however, that the Borrower may cause
the merger of one or more Bank Subsidiaries provided that the merger is not an Unpermitted Change
of Control. The Borrower shall cause its Bank Subsidiaries to preserve and maintain their existence
as banks the deposits of which are insured by the FDIC.



     Section  7.2. Financial Reports. The Borrower shall, and shall cause the Parent to, furnish to
FMB and its duly authorized representatives such information respecting the business and financial
condition of the Borrower as FMB may reasonably request; provided however, that in no event shall
the Borrower be required to disclose any confidential correspondence or reports of supervisory
activity; and without any request, shall furnish to FMB:




     (a) as soon as available, and in any event within 45 days after the close of each
fiscal quarter of the Borrower, all call reports and other financial statements required to
be delivered by the Borrower and by each Subsidiary to any governmental authority or
authorities having jurisdiction over the Borrower or such Subsidiary and all schedules
thereto;




     (b) as soon as available, and in any event, within 120 days after the close of each
fiscal year of the Borrower, a copy of the consolidated balance sheet of the Borrower and
its Subsidiaries as of the close of such period and the consolidated statements of income,
retained earnings and cash flows of the Borrower and its Subsidiaries for such period, and
accompanying notes thereto, each in reasonable detail showing in comparative form the
figures for the previous fiscal year, accompanied by an unqualified opinion thereon of
McGladrey & Pullen, LLP or another firm of independent public accountants of recognized
standing, selected by the Borrower and reasonably satisfactory to FMB, to the effect that
the consolidated financial statements have been prepared in accordance with GAAP and
present fairly the consolidated financial condition of the Borrower and its Subsidiaries as
of the close of such fiscal year and the results of their operations and cash flows for the
fiscal year then ended and that an examination of such accounts in connection with such
consolidated financial statements has been made in accordance with generally accepted
auditing standards and,



-11-









 






accordingly, such examination included such tests of the accounting records and such other
auditing procedures as were considered necessary in the circumstances;




     (c) promptly upon the filing thereof (if any), copies of all registration statements,
Form 10- K, Form  10- Q, and Form 8- K reports and proxy statements which the Borrower
or any Subsidiary files with the Securities and Exchange Commission;




     (d) promptly upon the receipt or execution thereof, (i) notice  by the Borrower or any
Subsidiary that (1) it has received a request or directive from any federal or state
regulatory agency which requires it to submit a capital maintenance or restoration plan or
restricts the payment of dividends by any Subsidiary to the Borrower or (2) it has
submitted a capital maintenance or restoration plan to any federal or state regulatory
agency or has entered into a memorandum or agreement with any such agency, including,
without limitation, any agreement which restricts the payment of dividends by any
Subsidiary to the Borrower or otherwise imposes restrictions or requirements on it which
are not generally applicable to banks or thrifts or their holding
companies, and (ii) copies of any such plan, memorandum, or agreement, unless disclosure is prohibited by the
terms thereof and, after the Borrower or such Subsidiary has in good faith attempted to
obtain the consent of such regulatory agency, such agency will not consent to the
disclosure of such plan, memorandum, or agreement to FMB;




     (e) promptly after knowledge thereof shall have come to the attention of any
responsible officer of the Borrower, written notice of any notice received by the Borrower
which would prevent the Borrower from making payments on the Note or otherwise affect the
Borrower’s ability to fulfill its Obligations hereunder or of any threatened or pending
litigation or governmental proceeding or labor controversy against the Borrower or any
Subsidiary which, if adversely determined, would reasonably be expected to have a Material
Adverse Effect; and




     (f) as soon as available, and in any event within 45 days after the last day of each
calendar quarter, the Borrower shall deliver to FMB a written certificate in the form
attached hereto as Exhibit B signed by the chief financial officer of the Borrower, or
such other officer of the Borrower satisfactory to FMB, to the effect that to the best of
such officer’s knowledge and belief no Default or Event of Default has occurred during the
period covered by such statements or, if any such Default or Event of Default has occurred
during such period, setting forth a description of such Default or Event of Default and
specifying the action, if any, taken by the Borrower to remedy the same.



     Section  7.3. Inspection. The Borrower shall, and shall cause each Subsidiary to, permit FMB
and its duly authorized representatives and agents to visit and inspect any of the Properties,
corporate books and financial records of the Borrower and each Subsidiary, to examine and make
copies of the books of accounts and other financial records of the Borrower and each Subsidiary,
and to discuss the affairs, finances and accounts of the Borrower and each Subsidiary with, and to
be advised as to the same by, its officers, employees, and independent public accountants (and by
this provision the Borrower hereby authorizes such accountants to discuss with FMB the finances and
affairs of the Borrower and of each Subsidiary) at such reasonable



-12-









 




times and reasonable intervals as FMB may designate; provided however, that in no event shall the
Borrower be required to disclose any confidential correspondence or reports of supervisory
activity. In the absence of a Default or an Event of Default, FMB shall be responsible for the cost
of such inspection.




     Section  7.4. Compliance with Laws. The Borrower shall, and shall cause each Subsidiary to,
comply in all respects with the requirements of all federal, state, local, and foreign laws, rules,
regulations, ordinances and orders applicable to or pertaining to its Property or business
operations, where any such non-compliance, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or result in a Lien upon any of its Property.



     Section  7.5. Burdensome Contracts With Affiliates. The Borrower shall not enter into any
contract, agreement or business arrangement (including, without limitation, contracts for the sale
of any Property) with any of its Affiliates on terms and conditions which are less favorable to the
Borrower or such Subsidiary than would be usual and customary in similar contracts, agreements or
business arrangements between Persons not affiliated with each other.



     Section  7.6. No Changes in Fiscal Year. The Borrower shall not change its fiscal year from its present basis.



Section
8.  Events of Default and Remedies.




     Section  8.1. Events of Default. Any one or more of the following shall constitute an “Event of Default” hereunder:



     (a) default for a period of 15 days in the payment when due of all or any part of any
Obligation payable by the Borrower hereunder or under any other Loan Document (whether at
the stated maturity thereof or at any other time provided for in this Agreement), or
default for a period of 15 days shall occur in the payment when due of any other
indebtedness or obligation (whether direct, contingent or otherwise) of the Borrower owing
to FMB; or



     (b) default in the observance or performance of any other provision hereof which is
not remedied within 30 days after the earlier of (i) the  date on which such failure shall
first become known to any officer of the Borrower or (ii)  written notice thereof is given
to the Borrower by FMB; or



     (c) any representation or warranty made by the Borrower herein or in any statement or
certificate furnished by it pursuant hereto or in connection with any extension of credit
made hereunder, proves untrue in any material respect as of the date of the issuance or
making thereof and shall not be made good within 30 days after the earlier of (i) the date
on which such breach shall first become known to any officer of the Borrower or (ii)
written notice thereof is given to the Borrower by FMB; or




-13-











 






          (d) default shall occur under any Indebtedness for Borrowed Money issued,
assumed or guaranteed by the Borrower or any Subsidiary aggregating more than the
greater of (i) 5% of the Borrower’s capital or (ii) $250,000, or under any indenture,
agreement or other instrument under which the same may be issued, and such default
shall continue for a period of time sufficient to permit the acceleration of the maturity of
any such Indebtedness for Borrowed Money (whether or not such maturity is in fact
accelerated), or any such Indebtedness for Borrowed Money shall not be paid when due
(whether by lapse of time, acceleration or otherwise); or




          (e) any judgment or judgments, writ or writs, or warrant or warrants of
attachment, or any similar process or processes in an aggregate amount in excess of the
greater of (i) 5% of the Borrower’s capital (determined on a consolidated basis) or
(ii) $250,000, shall be entered or filed against the Borrower, any Subsidiary or against
any of their Property and which remains unvacated, unbonded, unstayed or unsatisfied for
a period of 30 days; or




          (f) dissolution or termination of the existence of the Borrower or an
Unpermitted Change of Control shall occur; or




          (g) the Borrower or any Bank Subsidiary which is a major bank subsidiary
under FRB regulations or interpretations shall (i) have entered involuntarily against it an
order for relief under the United States Bankruptcy Code, as amended, (ii) not pay, or
admit in writing its inability to pay, its debts generally as they become due, (iii) make an
assignment for the benefit of creditors, (iv) apply for, seek, consent to, or acquiesce in,
the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official
for it or any substantial part of its Property, (v) institute any proceeding seeking to have
entered against it an order for relief under the United States Bankruptcy Code, as
amended, to adjudicate it insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an
answer or other pleading denying the material allegations of any such proceeding filed
against it, (vi) take any corporate action in furtherance of any matter described in parts (i)
through (v) above, or (vii) fail to contest in good faith any appointment or proceeding
described in Section 8.1(h) hereof; or




          (h) a custodian, receiver, trustee, examiner, liquidator or similar official shall be
appointed for the Borrower or any Bank Subsidiary which is a major bank subsidiary under FRB
regulations or interpretations or any substantial part of its Property, or a proceeding described
in Section 8.1(g)(v) shall be instituted against the Borrower or any Bank Subsidiary which is a
major bank subsidiary under FRB regulations or interpretations, and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period of 30 days; or




          (i) any conservator or receiver shall be appointed for the Borrower or any Bank
Subsidiary which is a major bank subsidiary under FRB regulations or



-14-









 






interpretations under applicable federal or state law applicable to banks, thrifts, or their
holding companies.



          Section 8.2. Non-Bankruptcy Defaults. When any Event of Default other than those described in
subsection (g) or (h) or (i), of Section 8.1 hereof has occurred and is continuing, FMB shall, by
written notice to the Borrower: (a) terminate all obligations of FMB hereunder on the date stated
in such notice (which may be the date thereof); and (b) enforce any and all rights and remedies
available to FMB under the Loan Documents or applicable law; provided, however, that FMB may not
accelerate payment of the principal of or the accrued interest on the Note.




          Section 8.3. Bankruptcy Defaults. When any Event of Default described in subsection (g) or
(h) or (i) of Section 8.1 has occurred and is continuing, then the Note, including both principal
and interest, and all fees, charges and other Obligations payable hereunder and under the other
Loan Documents, shall immediately become due and payable without presentment, demand, protest or
notice of any kind, and the obligation of FMB to extend further credit pursuant to any of the
terms hereof shall immediately terminate. In addition, FMB may exercise any and all remedies
available to it under the Loan Documents or applicable law.




Section 9. Miscellaneous.




          Section 9.1. Non-Business Day. If any payment hereunder becomes due and payable on a day which
is not a Business Day, the due date of such payment shall be extended to the next succeeding
Business Day on which date such payment shall be due and payable. In the case of any payment of
principal falling due on a day which is not a Business Day, interest on such principal amount shall
continue to accrue during such extension at the rate per annum then in effect, which accrued amount
shall be due and payable on the next scheduled date for the payment of interest.




          Section 9.2. No Waiver, Cumulative Remedies. No delay or failure on the part of FMB or on the
part of the holder of the Obligations in the exercise of any power or right shall operate as a
waiver thereof or as an acquiescence in any default, nor shall any single or partial exercise of
any power or right preclude any other or further exercise thereof or the exercise of any other
power or right. The rights and remedies hereunder of FMB and of the holder of the Obligations are
cumulative to, and not exclusive of, any rights or remedies which any of them would otherwise
have.




          Section 9.3. Amendments, Etc. No amendment, modification, termination or waiver of any
provision of this Agreement or of any other Loan Document, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed
by FMB. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other
or further notice or demand in similar or other circumstances.




          Section 9.4. Costs and Expenses; Indemnification. The Borrower agrees to pay on demand the
costs and expenses of FMB in connection with the negotiation, preparation, execution and delivery
of this Agreement, the other Loan Documents and the other instruments




-15-









 




and documents to be delivered hereunder or thereunder, and in connection with the transactions
contemplated hereby or thereby, and in connection with any consents hereunder or waivers or
amendments hereto or thereto, including the fees and expenses of counsel for FMB with respect to
all of the foregoing (whether or not the transactions contemplated hereby are consummated). The
Borrower further agrees to pay to FMB or any other holder of the Obligations all costs and
expenses (including court costs and attorneys’ fees), if any, incurred or paid by FMB or any other
holder of the Obligations in connection with any Default or Event of Default or in connection with
the enforcement of this Agreement or any of the other Loan Documents or any other instrument or
document delivered hereunder or thereunder. The Borrower further agrees to indemnify FMB, and any
security trustee, and their respective directors, officers and employees, against all losses,
claims, damages, penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor, whether or not the indemnified Person is a
party thereto) which any of them may pay or incur arising out of or relating to any Loan Document
or any of the transactions contemplated thereby or the direct or indirect application or proposed
application of the proceeds of any extension of credit made available hereunder, other than those
which arise from the gross negligence or willful misconduct of the party claiming indemnification.
The Borrower, upon demand by FMB at any time, shall reimburse FMB for any legal or other expenses
incurred in connection with investigating or defending against any of the foregoing except if the
same is directly due to the gross negligence or willful misconduct of the party to be indemnified.
The obligations of the Borrower under this Section shall survive the termination of this
Agreement.




          Section 9.5. Documentary Taxes. The Borrower agrees to pay on demand any documentary, stamp
or similar taxes payable in respect of this Agreement or any other Loan Document, including
interest and penalties, in the event any such taxes are assessed, irrespective of when such
assessment is made and whether or not any credit is then in use or available hereunder.




          Section 9.6. Survival of Representations. All representations and warranties made herein or
in any of the other Loan Documents or in certificates given pursuant hereto or thereto shall
survive the execution and delivery of this Agreement and the other Loan Documents, and shall
continue in full force and effect with respect to the date as of which they were made as long as
any credit is in use or available hereunder.




          Section 9.7. Survival of Indemnities. All indemnities and other provisions relative to
reimbursement to FMB of amounts sufficient to protect the yield of FMB with respect to the Loans,
including, but not limited to, Sections 2.7 and 2.9 hereof, shall survive the termination of this
Agreement and the payment of the Note.




          Section 9.8. Notices. Except as otherwise specified herein, all notices hereunder shall be in
writing (including, without limitation, notice by telecopy) and shall be given to the relevant
party at its address or telecopier number set forth below, or such other address or telecopier
number as such party may hereafter specify by notice to the other given by United States certified
or registered mail, by telecopy or by other telecommunication device capable of creating a written
record of such notice and its receipt. Notices hereunder shall be addressed:




-16-









 





	 	 	 	 	 
	 

	 	to the Borrower at:
	 	to FMB at:
	 
	 

	 	First Interstate BancSystem, Inc.
	 	First Midwest Bank
	 

	 	401 North 31st Street
	 	One Pierce Place, Suite 1500
	 

	 	Billings, Montana 59116-0918
	 	Itasca, Illinois 60143
	 

	 	Attention:     Terrill R. Moore
	 	Attention:     Brian R. Callahan
	 

	 	Telephone:     (406) 255-5300
	 	Telephone:     (630) 875-7341
	 

	 	 	 	Telecopy:       (630) 875-7439





Each such notice, request or other communication shall be effective (i) if given by telecopier,
when such telecopy is transmitted to the telecopier number specified in this Section and a
confirmation of such telecopy has been received by the sender, (ii) if given by mail, five (5)
days after such communication is deposited in the mail, certified or registered with return
receipt requested, addressed as aforesaid or (iii) if given by any other means, when delivered at
the addresses specified in this Section; provided that any notice given pursuant to Section 1 or
Section 2 hereof shall be effective only upon receipt.




          Section 9.9. Construction. Nothing contained herein shall be deemed or construed to permit
any act or omission which is prohibited by the terms of any of the other Loan Documents, the
covenants and agreements contained herein being in addition to and not in substitution for the
covenants and agreements contained in the other Loan Documents.




          Section 9.10. Headings. Section headings used in this Agreement are for convenience of
reference only and are not a part of this Agreement for any other purpose.




          Section 9.11. Severability of Provisions. Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.




          Section 9.12. Counterparts. This Agreement may be executed in any number of counterparts, and
by different parties hereto on separate counterpart signature pages, and all such counterparts
taken together shall be deemed to constitute one and the same instrument.




          Section 9.13. Binding Nature, Governing Law, Etc. This Agreement shall be binding upon the
Borrower and its successors and assigns, and shall inure to the benefit of FMB and the benefit of
its successors and assigns, including any subsequent holder of the Obligations. The Borrower may
not assign its rights hereunder without the written consent of FMB. This Agreement constitutes the
entire understanding of the parties with respect to the subject matter hereof and any prior
agreements, whether written or oral, with respect thereto are superseded hereby. This
Agreement and the rights and duties of the parties hereto shall be governed by, and construed in
accordance with, the internal laws of the State of Illinois without regard to principles of
conflicts of laws.




-17-









 





          Section 9.14. Submission to Jurisdiction; Waiver of Jury Trial. The Borrower hereby submits to
the nonexclusive jurisdiction of the United States District Court for the Northern District of
Illinois and of any Illinois State court sitting in the City of Chicago for purposes of all legal
proceedings arising out of or relating to this Agreement, the other Loan Documents or the
transactions contemplated hereby or thereby. The Borrower irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such proceeding brought in such
a court has been brought in an inconvenient forum.
The Borrower and FMB each hereby irrevocably
waive any and all right to trial by jury in any legal proceeding arising out of or relating to any
Loan Document or the transactions contemplated thereby.




          Section 9.15. USA Patriot Act. FMB hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify, and record information that identifies the
Borrower, which information includes the name and address of the Borrower and other information
that will allow FMB to identify the Borrower in accordance with the Act.




[Signature Page to Follow]




-18-









 





          Upon your acceptance hereof in the manner hereinafter set forth, this Agreement shall
constitute a contract between us for the uses and purposes hereinabove set forth.




          Dated as of this 10th day of January, 2008.




	 	 	 	 	 	 	 
	 	 	First Interstate BancSystem, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	              /s/ Terrill R. Moore
 

Name   Terrill R. Moore
	 	 
	 

	 	 	 	Title     CFO &  EVP	 	 






          Accepted and agreed to at Itasca, Illinois, as of the day and year last above written.




	 	 	 	 	 	 	 	 	 
	 	 	First Midwest Bank	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By
	 	 	 	/s/ Brian R. Callahan	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name
	 	Brian R. Callahan
 

	 	 
	 

	 	 	 	Title
	 	S.V.P.
 

	 	 






-19-









 





Exhibit A




This obligation is not a deposit and is not insured by the

Federal Deposit Insurance Corporation or any federal agency.




Subordinated Term Note




			
	 	 	 
	$20,000,000	 	January 10, 2008






          For
Value
Received, the undersigned, First Interstate BancSystem,
Inc., a
Montana corporation (the “Borrower”), hereby promises to pay to the order of First Midwest Bank
(“FMB”) at its office at One Pierce Place, Itasca, Illinois, the principal sum of Twenty Million
and 00/100 Dollars ($20,000,000), payable in principal installments in the amounts and at the
times set forth in Section 1.1 of the Credit Agreement hereinafter mentioned, with all principal
not sooner paid due and payable on the Term Loan Final Maturity Date.




          This Note evidences the Term Loan made to the Borrower by FMB under that certain Credit
Agreement re: Subordinated Term Note dated as of January 10, 2008, between the Borrower and FMB
(said Credit Agreement, as the same may be amended, modified or restated from time to time, being
referred to herein as the “Credit Agreement”), and the Borrower hereby promises to pay interest at
the office described above on the Term Loan evidenced hereby at the rates and at the times and in
the manner specified therefor in the Credit Agreement.




          This Note is issued by the Borrower under the terms and provisions of the Credit Agreement,
and this Note and the holder hereof are entitled to all of the benefits provided for thereby or
referred to therein, to which reference is hereby made for a statement thereof. This Note may be
declared to be, or be and become, due prior to its expressed maturity, voluntary prepayments may
be made hereon subject to the conditions of the Credit Agreement, all in the events, on the terms
and with the effects provided in the Credit Agreement. All capitalized terms used herein without
definition shall have the same meanings herein as such terms are defined in the Credit Agreement.




          The Borrower hereby promises to pay all costs and expenses (including attorneys’ fees)
suffered or incurred by the holder hereof in collecting this Note or enforcing any rights in any
collateral therefor. The Borrower hereby waives presentment for payment and demand.
This Note
shall be construed in accordance with, and governed by, the internal laws of the State of Illinois
without regard to principles of conflicts of laws.




          The indebtedness of the Borrower evidenced by this Note, including the principal and premium,
if any, and interest shall be subordinate and junior in right of payment to its obligations under
bankers’ acceptances and letters of credit, and its obligations to its other creditors, including
its obligations to the Board of Governors of the Federal Reserve System and holders of the Senior
Debt. In the event of any insolvency, receivership, conservatorship, reorganization, readjustment
of debt, marshaling of assets and liabilities or similar proceedings or any liquidation or winding
up of or relating to the Borrower, whether voluntary or involuntary, all




 









 







such obligations shall be entitled to be paid in full before any payment shall be made on account
of the principal of, or premium, if any, or interest, on the Note. In the event of any such
proceedings, after payment in full of all sums owing on such prior obligations, the holder of the
Note together with any obligations of the Borrower ranking on a parity with the Note, shall be
entitled to be paid from the remaining assets of the Borrower the unpaid principal thereof and any
unpaid premium, if any, and interest before any payment or other distribution, whether in cash,
property, or otherwise, shall be made on account of any capital stock or any obligations of the
Borrower ranking junior to the Note. Nothing herein shall impair the obligation of the Borrower,
which is absolute and unconditional, to pay the principal of and any premium and interest on the
Note according to its terms.




	 	 	 	 	 	 	 	 	 
	 	 	First Interstate BancSystem, Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name
	 	 
 

	 	 
	 

	 	 	 	Title
	 	 
 

	 	 






-2-









 





Exhibit B




Compliance Certificate




To:       First Midwest Bank




          This Compliance Certificate is furnished to First Midwest Bank (“FMB”) pursuant to that
certain Credit Agreement re: Subordinated Term Note dated as of January 10, 2008, between First
Interstate BancSystem, Inc. and you (the “Credit Agreement”). Unless otherwise defined herein, the
terms used in this Compliance Certificate have the meanings ascribed thereto in the Credit
Agreement.




          The Undersigned hereby certifies that:





          1. I am the duly elected                                                     
                                                 of the
Borrower;




          2. I have reviewed the terms of the Credit Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the transactions and
conditions of the Borrower and its Subsidiaries during the accounting period covered by
the attached financial statements;




          3. The examinations described in paragraph 2 did not disclose, and I have no
knowledge of, the existence of any condition or the occurrence of any event which
constitutes a Default or Event of Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this Certificate,
except as set forth below;




          4. The information required by Section 7.2(a) of the Credit Agreement and
being furnished to you concurrently with this certificate are, to the best of my
knowledge, true, correct and complete as of the dates and for the periods covered thereby; and



          Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature
of the condition or event, the period during which it has existed and the action which the
Borrower has taken, is taking, or proposes to take with respect to each such condition or event:




	 	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 





 









 





          The foregoing certifications, together with the computations set forth in the Attachment
hereto and the financial statements delivered with this Certificate in support hereof, are
made and delivered this                      day of                                         ,           .




	 	 	 	 	 	 	 	 	 
	 	 	First Interstate BancSystem, Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name
	 	 
 

	 	 
	 

	 	 	 	Title
	 	 
 

	 	 







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