Exhibit 10.10.1

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

          THISAMENDED AND RESTATED CREDIT AGREEMENT is made as of the 30th day of April,1999, and is by and among COMMUNITY FIRST BANKSHARES, INC., a Delawarecorporation with offices located in Fargo, North Dakota (the “Borrower”),HARRIS TRUST AND SAVINGS BANK (“Harris”) and NORWEST BANK MINNESOTA, NATIONALASSOCIATION (“Norwest;” Harris and Norwest each referred to herein as a “Bank”and collectively as “Banks”), and Norwest as agent for the Banks (in suchcapacity, the “Agent”).

RECITALS

          WHEREAS,the Borrower has requested the Banks (i) to establish a back-up revolving lineof credit, for the benefit of the Borrower in the amount of $35,000,000.00, and(ii) to make a reducing revolving term loan to the Borrower in the amount of$10,000,000.00;

          WHEREAS,the Banks are willing to grant said requests, subject to the provisions of thisCredit Agreement;

          NOW,THEREFORE, in consideration of the premises and of the mutual agreementsherein, the parties agree as follows:

          SECTION1  Definitions

          Inaddition to those terms defined in the above Recitals, as used herein:

1.1     “Advance”shall mean a Credit Advance or a Term Loan Advance.

1.2     “Agreement”shall mean this Credit Agreement and all amendments and supplements heretowhich may from time to time become effective hereafter.

1.3     “BankGroup” shall mean the Borrower and the Subsidiary Banks.

1.4     “BaseRate” shall mean the “base” or “prime” rate of interest established by Norwestas in effect and announced from time to time.

1.5     “BaseRate Borrowing” shall mean those Advances bearing interest at all times at avariable rate determined by reference to the Base Rate.

1.6     “BorrowedMoney” shall mean funds obtained by incurring contractual indebtedness, butshall not include money borrowed from any Bank.

1.7     “Business Day” shall mean (i) for allpurposes other than those described in the following clause (ii), any day onwhich the Agent is open for transacting substantially all of its commercialbusiness, and (ii) with respect to all notices and determinations in connectionwith, and payments of principal of and interest on, Eurodollar Borrowings, anyBusiness Day described in preceding clause (i) on which trading by and betweenbanks in United States Dollar deposits in the London Interbank Eurodollarmarket is transacted.

1.8     “ClosingDate” shall mean the date on which this Agreement is fully executed anddelivered to the Agent.

1.9     “CoreCapital” shall mean the sum of the consolidated total equity of the Bank Groupplus capital and trust preferred Securities.

1.10   “Credit”shall mean a revolving line of credit established by the Banks for the benefitof the Borrower in the aggregate amount of $35,000,000.00.

1.11   “CreditAdvance” shall mean an advance of funds under the Credit.

1.12   “CreditExpiration Date” shall mean April 30, 2000.

1.13   “CreditPercentages” shall mean, relative to any Bank, the percentages identified assuch set forth opposite the signature block for such Bank on the last page ofthis Agreement.

1.14   “CurrentNotes” shall mean the promissory notes of the Borrower substantially in theform of attached Exhibits A-1 and A-2, evidencing Credit Advances under theCredit.

1.15   “EurodollarBorrowing” shall mean those Advances bearing interest at all times during therelevant Interest Period at a fixed rate determined by reference to theEurodollar Rate.

1.16   “EurodollarRate” shall mean, with respect to any Interest Period for any EurodollarBorrowing, the rate per annum (rounded up to the nearest one-sixteenth of onepercent) equal to the offered quotation to the Agent in the London InterbankEurodollar market for United States Dollar deposits for delivery on the firstday of such Interest Period, for the number of days in such Interest Period,and in an amount comparable to the principal amount of the related EurodollarBorrowing to be outstanding during such Interest Period, determined as ofapproximately 12:00 Noon, Minneapolis time, two Business Days before thebeginning of such Interest Period.

1.17   “Eventsof Default” shall mean any and all events of default described in Section 8hereof.

1.38   “FederalFunds Borrowing” shall mean those Advances bearing interest at all times at avariable rate determined by reference to the Federal Funds Rate.

1.19   “Federal Funds Rate” shall mean the overnightmarket rate quoted to the Agent at approximately 12:00 Noon, Minneapolis time,each Business Day by dealers in the Federal Funds market for the offering ofdollars to the Agent for deposit, as such rate may increase or decrease fromtime to time.

1.20   “GAAP”shall mean Generally Accepted Accounting Principles applied on a basisconsistent with those reflected in the financial statements referred to inSection 5.8 hereof.

1.21   “InterestPayment Date” shall mean (i) as to any Eurodollar Borrowing in respect of whichan Interest Period of one, two or three months has been selected, the last dayof such Interest Period, and (ii) as to any Eurodollar Borrowing in respect ofwhich an Interest Period of six months has been selected, the last day of thefirst three month period falling within such Interest Period and the last dayof such Interest Period.

1.22   “InterestPeriod” means, with respect to any Eurodollar Borrowing, (a) initially, theperiod commencing on, as the case may be, the date on which such EurodollarBorrowing is made or the date on which such Eurodollar Borrowing results fromthe conversion of a Base Rate Borrowing or a Federal Funds Borrowing and endingone, two, three or six months thereafter, as selected in a notice of borrowing,continuance or conversion as provided in Sections 2.1, 2.3, 2.4 or 3.4 hereof,and (b) thereafter, each period commencing on the last day of the immediatelypreceding Interest Period and ending one, two, three or six months thereafter,as selected by irrevocable notice to the Agent (which notice must be receivedby the Agent before 12:00 Noon, Minneapolis time, three Business Days beforethe last day of the then current Interest Period with respect to suchEurodollar Borrowing); provided, however, that (i) if any Interest Period wouldotherwise end on a day that is not a Business Day, that Interest Period shallbe extended to the next succeeding Business Day unless the result of suchextension would be to carry such Interest Period into another calendar month,in which event such Interest Period shall end on the immediately precedingBusiness Day, (ii) the Borrower may not select an Interest Period that wouldotherwise extend beyond the Credit Expiration Date (with respect to the Credit),or the Term Loan Maturity Date (with respect to the Term Loan), (iii) if nonotice is given with respect to selection on an Interest Period as providedabove, the affected Eurodollar Borrowing shall be converted to a Base RateBorrowing on the last day of the Interest Period then in effect and (iv) anyInterest Period that begins on the last Business Day of a calendar month (or ona date for which there is no numerically corresponding day in the calendarmonth at the end of such Interest Period) shall end on the last Business Day ofa calendar month.

1.23   “MajorityBanks” shall mean any group of banks which, in the aggregate, has commitmentsof 66-67% or more of the aggregate amount of the Credit and the Term Loan.

1.24   “PermittedLiens” shall mean (i) liens in favor of Norwest as agent for the Banks on a prorata basis, (ii) liens existing as of the Closing Date and disclosed to theBanks in writing, (iii) liens for taxes not delinquent or which theBorrower is contesting in good faith in a manner that prevents enforcement ofthe matters being contested and for which adequate reserves have been provided,and (iv) purchase money liens securing indebtedness otherwise permitted underthis Agreement, but only extending to the goods so acquired.

1.25   “Prior Loan Agreement” shall mean thatcertain Credit Agreement dated as of January 23, 1998 and amended by amendmentsdated as of July 2, 1998 and January 22, 1999 made between the Borrower,Norwest, Harris, Bank of America National Trust and Savings Association and theAgent.

1.26   “ReserveAdjusted Eurodollar Rate” shall mean, for any Interest Period, a rate per annum(rounded upward, if necessary, to the next higher 1/16 of 1%) equal to the rateobtained by dividing (i) the Eurodollar Rate for such Interest Period by (ii) apercentage equal to 1 minus the Reserve Requirement in effect from time to timeduring such Interest Period.

1.27   “ReserveRequirement” shall mean, relative to the Interest Period applicable to anyEurodollar Borrowing, a percentage (expressed as a decimal) equal to theaggregate maximum reserve requirement (including all basic, supplemental,marginal and other reserves and taking into account any transitions,adjustments or other scheduled changes in reserve requirements during suchinterest Period) on the first day of such Interest Period as specified underF.R.S. Board Regulation D or any other F.R.S. Board regulation then in effectwhich prescribes reserve requirements applicable to non-personal time deposits(as currently defined in such Regulation D), applicable to the class of banksof which the Banks are members, on deposits of the type used as a reference indetermining the Reserve Adjusted Eurodollar Rate and having a maturityapproximately equal to such Interest Period.

1.28   “SubsidiaryBanks” shall mean each bank for which 51% or more of its voting stock iscontrolled directly, or indirectly via a subsidiary, by the Borrower.

1.29   “TangibleEquity Capital” shall mean the sum of perpetual preferred stock, common stocksurplus and undivided profits, capital reserves, and net unrealized holdinggains (and losses) on “available-for-sale” securities, as disclosed in theSubsidiary Banks’ Call Reports.

1.30   “TermLoan” shall mean a reducing revolving term loan made by the Banks to theBorrower in an aggregate amount not exceeding $10,000,000.00.

1.31   “TermLoan Advance” shall mean an advance of funds under the Term Loan.

1.32   “TernLoan Maturity Date” shall mean January 23, 2006.

1.33   “TermLoan Percentages” shall mean, relative to any Bank, the percentages identifiedas such set forth opposite the signature block for such Bank on the last pageof this Agreement.

1.34   “TermNotes” shall mean the promissory notes of the Borrower substantially in theform of attached Exhibits B-1 and B-2, evidencing the Term Loan.

1.35.  “Tier1 Core Capital” shall mean the core capital elements set forth by the FederalReserve Board in 12 CFR Parts 208 and 225.

1.36   “Tier2 Supplementary Capital” shall mean the allowance for loan and lease losses, asdisclosed in the Subsidiary Banks, Call Reports.

1.37   “Total Liabilities” shall mean the aggregateamount of the Borrower’s total liabilities.. less capital and trust preferred securities to the extentincluded as total liabilities.

          SECTION 2  The Credit

2.1     Subject to the otherprovisions of this Agreement, each Bank shall make Credit Advances to theBorrower under The Credit from time to time from the effective date hereofuntil the Credit Expiration Date in aggregate principal amounts not exceedingsuch Bank’s Credit Percentage of THIRTY-FIVE MILLION AND NO/100 DOLLARS($35,000,000.00), at any one time outstanding. Each Credit Advance will be requested to the Agent in writing by anauthorized officer of the Borrower.  Theproceeds of the initial Credit Advance shall be used for the exclusive purposeof paying off any indebtedness outstanding under Section 2 of the Prior LoanAgreement.  Each request (other than therequest for the initial Credit Advance) shall be accompanied by a Notice ofBorrowing, substantially in the form of attached Exhibit C, stating (amongother things) that the proceeds of the requested Credit Advance will be usedonly to pay commercial paper notes at maturity.  Each Credit Advance shall be made on a Business Day, and shall becomprised of either a Base Rate Borrowing, a federal Funds Borrowing, or(provided there exists no Event of Default) a Eurodollar Borrowing, asrequested by the Borrower.  Any CreditAdvance for which the Borrower fails to specify at the time of the relatedrequest either a Base Rate Borrowing, a Federal Funds Borrowing or a EurodollarBorrowing shall be a Base Rate Borrowing. Requests for Credit Advances must be received by the Agent no later than12:00 Noon, Minneapolis time, on the day of an Credit Advance comprised of aBase Rate Borrowing or a Federal Funds Borrowing, and no later than 12:00 Noon,Minneapolis time, on the third Business Day immediately preceding an CreditAdvance comprised of a Eurodollar Borrowing. The person making the request may ask the Agent to quote an indicationof the Eurodollar Rate which would be applicable to the Credit Advance for anInterest Period specified by such person. If the person does not immediately accept the quoted Eurodollar Rate,the related Credit Advance shall be a Base Rate Borrowing.  If the quoted Eurodollar Rate is immediatelyaccepted, the requested Credit Advance shall be a Eurodollar Borrowing;provided, however, that each Credit Advance comprised of a Eurodollar Borrowingshall be in the amount of $5,000,000.00, or a greater amount in increments of$1,000,000.00.  Each request for anadvance shall be deemed a representation and warranty by the Borrower that therepresentations and warranties set forth in Section 5 hereof are true as of thedate of such request.  Each CreditAdvance will be evidenced by a notation on each Bank’s records, which shall beconclusive evidence of such Credit Advance, and by the related CurrentNote.  Within the limits of the Creditand subject to the terms and conditions hereof, the Borrower may borrow, prepaypursuant to Section 2.11 hereof and reborrow pursuant to this Section 2.1.

2.2     The Agent shall notify each Bank of eachrequest for a Credit Advance by telephone or fax no later than 1:00 p.m.,Minneapolis time on the day on which the Agent received the request.  Subject to the notice requirements ofSection 2.1 hereof and to the further provisions of this Section 2.2, the Agentwill make the Credit Advance to the Borrower no later than 4:40 p.m.,Minneapolis time, on the Business Day requested by the Borrower.  On or before 3.30 p.m., Minneapolis time, onsuch Business Day, each Bank shall deposit with the Agent same-day funds in anamount equal to such Bank’s Percentage of the related Credit Advance.  Such deposit will be made to an accountwhich the Agent shall specify from time to time by notice to the Banks.  To the extent funds are received from theBanks in accordance with this Section 2.2, the Agent shall make such fundsavailable to the Borrower by wire transfer to the account(s) the Borrower shallhave designated to the Agent at or before the time of the related request.

2.3     EurodollarBorrowings may be continued as such upon the expiration of an Interest Periodwith respect thereto by compliance with the notice provisions set forth inSections 1.22 and 2.1 hereof, provided, however, that Eurodollar Borrowings maynot be continued as such when any Event of Default exists, but (subject to theBank’s rights under Section 8 hereof) shall be automatically converted to BaseRate Borrowings on the last day of the existing Interest Period.  If the Borrower shall fail to notify theBank of its desire to continue a Eurodollar Borrowing, as described in thefirst sentence of this Section 2.3, such borrowing shall be automaticallyconverted to a Base Rate Borrowing on the last day of the existing InterestPeriod.

2.4     Forso long as there exists no Event of Default, and subject to the dollarrestrictions specified in Section 2.1 hereof, the Borrower may elect to convertany Base Rate Borrowing or Federal Funds Borrowing to a Eurodollar Borrowing bycompliance with the notice provisions set forth in Sections 1.22 and 2.1hereof.  The Borrower may elect toconvert any Eurodollar Borrowing to a Base Rate Borrowing or Federal FundsBorrowing on the last day of the related Borrow Interest Period by compliancewith the notice provisions set forth in Sections 1.22 and 2.1 hereof.

2.5     Subjectto the provisions of Section 2.7 hereof, interest on that portion of theoutstanding principal of the Current Note comprised of Base Rate Borrowingsshall be calculated at an annual rate equal to the Base Rate in effect fromtime to time, and shall change as and when the Base Rate changes.  Subject to the provisions of Section 2.7hereof, interest on that portion of the outstanding principal of the CurrentNote comprised of Federal Funds Borrowings shall be calculated at all annualrate equal to one percent (1.0%) in excess of the Federal Funds Rate in effectfrom time to time, and shall change as and when the Federal Funds Ratechanges.  Interest  shall be calculated on the basis of theactual number of days elapsed in a year of 365 days.

2.6     Subjectto the provisions of Section 2.7 hereof, interest on the unpaid principal ofEurodollar Borrowings shall be calculated for each Interest Period at a fixedannual rate equal to the sum, of the Reserve Adjusted Eurodollar Ratedetermined for such Interest Period plus one percent (1.0%).  Interest shall be calculated on the basis ofthe actual number of days elapsed in a year of 360 days.

2.7     Notwithstandingthe provisions of Sections 2.5 and 2.6 hereof, for so long as there exists anyEvent of Default, interest on the Current Notes shall accrue at an annual rateof two percent (2.0%) in excess of the rate which would otherwise apply to theCurrent Notes.

2.8     Intereston the unpaid principal of Base Rate Borrowings and Federal Funds Borrowingsshall be payable monthly, commencing May 23, 1999, and continuing on the sameday of each succeeding month, and on the Credit Expiration Date.

2.9     Interest on the unpaid principal of eachEurodollar Borrowing shall be payable in arrears on the related InterestPayment Date.

2.10   Theprincipal of tile Current Notes shall be repayable on the Credit ExpirationDate.

2.11   TheBorrower may at any time prepay Base Rate Borrowings and Federal FundsBorrowings in whole or from time to time in part without premium orpenalty.  The Borrower may prepay anyEurodollar Borrowing only in its entirety and only on the last day of therelevant Interest Period.

2.12   Ifthe Agent or any Bank determines (which determination shall be conclusive andbinding upon the Borrower) that by reason of circumstances affecting theInterbank Eurodollar market, adequate and reasonable means do not exist forascertaining the Eurodollar Rate for any Interest Period with respect to (i) aproposed Eurodollar Borrowing or (ii) the continuation of Eurodollar Borrowingsbeyond the expiration of the then current Interest Period with respect thereto,the Agent shall forthwith give immediate notice of such determination to theBorrower at least one Business Day before, as the case may be, the requestedborrowing date for such Eurodollar Borrowings on the last day of such InterestPeriod.  If such notice is given, (i)any requested Eurodollar Borrowing shall be made as Base Rate Borrowings and(ii) any outstanding Eurodollar Borrowings shall be converted, on the last dayof the then-current Interest Period with respect thereto, to Base RateBorrowings.  Until such notice has beenwithdrawn by the Agent, no further Eurodollar Borrowings shall be made, norshall the Borrower have the right to convert Base Rate Borrowings or FederalFunds Borrowings into Eurodollar Borrowings.

2.13   Notwithstandingany other provision hereof, if any law, regulation, treaty or directive or anychange therein or in the interpretation or application thereof by anygovernmental authority, agency or instrumentality or any court makes itunlawful for any Bank to make or maintain Eurodollar Borrowings as contemplatedby this Agreement, such Bank and the Agent shall give notice (by telephoneconfirmed in writing) thereof to the Borrower, and (i) such Bank’s commitmentto make Eurodollar Borrowings shall forthwith be canceled, (ii) eachthen-outstanding Eurodollar Borrowing (if any) shall automatically be convertedto a Base Rate Borrowing on the last day of the then-current Interest Periodfor such Eurodollar Borrowing or within such earlier period as required by law,and (iii) such Bank shall thereafter make any requested Eurodollar Borrowingavailable as a Base Rate Borrowing.  TheBorrower hereby agrees promptly to pay such Bank, upon demand, any additionalamount necessary to compensate such Bank for any costs incurred by such Bank inmaking any conversion of Eurodollar Borrowings in accordance with this Section2.13, including (but not limited to) any interest or fees payable by such Bankto lenders of funds obtained by it in order to make or maintain such EurodollarBorrowings (the Bank’s notice of such costs, as certified to the Borrower, tobe conclusive absent manifest error).

2.14   The Borrower shall pay the Agent, in advanceon a calendar quarter basis, on behalf of the Banks a facility fee ofone-quarter of one percent (0.25%) of the amount of the Credit, based on actualnumber of days elapsed in a year of 365 days.

          SECTION3  The Term Loan

3.1     Subjectto the other provisions of this Agreement, each Bank shall make Term LoanAdvances to the Borrower under the Term Loan from time to time from theeffective date hereof until the Term Loan Maturity Date in aggregate principalamounts at any one time outstanding not exceeding such Bank’s Term LoanPercentage of the Maximum Term Loan Amount determined pursuant to Section 3.2hereof.  Each Term Loan Advance will berequested to the Agent in writing by an authorized officer of the Borrower on aNotice of Borrowing substantially in the form of Exhibit C hereto.  The proceeds of the initial Term LoanAdvance shall be used for the exclusive purpose of paying off any indebtednessoutstanding under Section 3 of the Prior Loan Agreement.  Requests for Term Loan Advances must bereceived by the Agent no later than 12:00 Noon, Minneapolis time, on the day ofa Term Loan Advance comprised of a Base Rate Borrowing or a Federal FundsBorrowing, and no later than 12:00 Noon, Minneapolis time, on the thirdBusiness Day immediately preceding a Term Loan Advance comprised of aEurodollar Borrowing.

3.2     TheMaximum Term Loan Amount shall initially be $10,000,000.00 from the date ofthis Agreement through June 30, 1999. The Maximum Term Loan Amount shall thereafter be reduced in semi-annualincrements of $714,000.00 each, commencing June 30, 1999 and continuing on thelast day of each consecutive December and June thereafter.  Within such Maximum Term Loan Amount andsubject to the terms and conditions of this Agreement, the Borrower may borrow,repay and reborrow under the Term Loan.

3.3     TheAgent shall promptly notify each Bank of the Borrower’s request for a TermAdvance, and the amount of the term Loan Advance.  Subject to the further provisions of this Section 3.3, the Agentwill fund the Term Loan Advance no later than 4:30 p.m., Minneapolis time, onthe Business Day requested by the Borrower. On or before 3:30 p.m., Minneapolis time, on such Business Day, eachBank shall deposit with the Agent same-day funds constituting such Bank’s TermLoan Percentage of the Term Loan Advance. Such deposit will be made to an account which the Agent shall specify bynotice to the Banks.  To the extentfunds are received from the Banks in accordance with this Section 3.3, theAgent shall make such funds available to the Borrower by wire transfer to theaccount(s) the Borrower shall have designated to the Agent at or before thetime of the related request.

3.4         The Term Loan shall be comprised ofBase Rate Borrowings, Federal Funds Borrowings, and/or Eurodollar Borrowings;provided, however, that Eurodollar Borrowings shall be in the amount of$5,000,000.00, or a greater amount in increments of$1,000,000.00; provided, further, that no Eurodollar Borrowing may be in anamount, or for an Interest Period, which would cause the Borrower to make aprepayment of such Eurodollar Borrowing prior to the last day of such InterestPeriod in order to comply with the principal repayment schedule set forth inSection 3.8 hereof subject to the provisions of Section 3.5 hereof, interest onthat portion of the unpaid principal of the Term Note comprised of a Base RateBorrowing shall be calculated at an annual rate equal to the Base Rate ineffect from time to time, and shall change as and when the Base Rate changes;interest on that portion of the unpaid principal of the Term Note comprised ofa Federal Funds Borrowing shall be calculated at an annual rate equal to oneand one-quarter percent (1.25%) in excess of the Federal funds Rate in effectfrom time to time, and shall change as and when the Federal Funds Rate changes;and, interest on that portion of the unpaid principal of the Term Notecomprised of a Eurodollar Borrowing shall be calculated for each InterestPeriod at a fixed annual rate equal to the sum of the Reserve AdjustedEurodollar Rate determined for such Interest Period plus one and one-quarterpercent (1.25%).  Reference is herebymade to Sections 1.22, 2.1, 2.3 and 2.4 for statements of the terms relating tonotice requirements for the creation, continuance or conversion of Base RateBorrowings, Federal Funds Borrowings and Eurodollar Borrowings.  Interest on the Term Note shall becalculated on basis of the actual number of days elapsed in a year of 360 days.

3.5     Notwithstandingthe provisions of Section 3.4 hereof, for so long as there exists any Event ofDefault, interest on the Term Note shall accrue at an annual rate of twopercent (2.0%) in excess of the rate which would otherwise apply to the TermNote.

3.6     Intereston the unpaid principal of Base Rate Borrowings and federal Funds Borrowingsshall be payable quarterly, commencing June 3 0, 1999, and continuing on thelast day of each succeeding calendar quarter, and on the Term Loan MaturityDate.

3.7     Intereston the unpaid principal of each Eurodollar Borrowing shall be payable inarrears on the related Interest Payment Date.

3.8     Theprincipal of the Term Notes shall be repayable in semi-annual installments,commencing June 30, 1999 and continuing on the last day of each consecutiveDecember and June thereafter through and including December 31, 2005, eachinstallment in the amount, if any, necessary to reduce the aggregate principaloutstanding under the Term Loan to the new Maximum Term Loan Amount, to beallocated amount the Term Notes pro rata. On January 23, 2006 all then-remaining outstanding principal of the TermLoan shall be due and payable.

3.9     TheBorrower may at any time prepay Base Rate Borrowings and Federal FundsBorrowings in whole or from time to time in part without premium orpenalty.  Reference is hereby made toSection 2.11 for statements of the terms pursuant to which Eurodollar Borrowingsmay be prepaid.  Prepayments shall beapplied to scheduled installments in chronological order of their maturities.

3.10   TheBorrower shall pay to the Agent in arrears on a calendar quarter basis, onbehalf of the Banks within seven calendar days of receipt of the related feestatement, a fee (the “Unused Term Loan Fee”) calculated at an annual rateequal to two-tenths of one percent (0.20%) of the average daily unused portionof the Term Loan.  The Unused Term LoanFee shall be calculated on the basis of actual number of days elapsed in a yearof 360 days.  As used herein, the term“unused portion” shall mean the difference between the applicable Maximum TermLoan Amount and the outstanding principal balance of the Term Loan as of thedate of determination.

          SECTION 4  Conditions Precedent

4.1     TheBorrower represents that the following documents, delivered to the Agent inconnection with the Prior Loan Agreement, have not been amended or rescindedand remain in full force and effect.

          A.      A copy, certified by the Secretary ofState of Delaware, of the Borrower’s Certificate of Incorporation and allamendments thereto, together with a certificate (as of the Closing Date) of anofficer of the Borrower to the effect that such Certificate of Incorporationhas not been amended since the date of certification by the Secretary of State;

          B.       A certified (as of the Closing Date) copyof the Borrower’s By-laws;

4.2     TheBorrower shall deliver the following to the Agent, in form and contentacceptable to the Agent, on or before the Closing Date:

          A.      A certified (as of the Closing Date) copyof resolutions of the Borrower’s board of directors authorizing the execution,delivery and performance of this Agreement, the Current Notes, the Term Note,and each other document to be delivered pursuant hereto;

          B.       A certificate (as of the Closing Date) ofan officer of the Borrower as to the incumbency and signatures of the officersof the Borrower signing this Agreement, the Current Notes, the Term Note, andeach other document to be delivered pursuant hereto;

          C.      The Current Notes, duly executed by theBorrower;

          D.      The Term Notes, duly executed by theBorrower;

          E.       All instruments and documents comprisingsubordinated debt issued by the Borrower and remaining unpaid as of the ClosingDate; and,

4.3     The Banks shall not be obligated to fund anyrequested Advance unless:

          A.      The representations and warrantiescontained in Section 5 hereof are true and accurate on and as of such date;and,

          B.       No Event of Default, and no event whichmight become an Event of Default after the lapse of time or the giving ofnotice and the lapse of time, has occurred and is continuing or will exist uponthe date of such funding.

          SECTION5  Representations and Warranties

          To induce the Banks to enter into thisAgreement, the Borrower represents and warrants to the Banks as follows:

5.1     The Borrower is a corporation, dulyorganized, existing and in good standing under the laws of the State ofDelaware.

5.2     The Borrower is authorized to transactbusiness in the states of Delaware and North Dakota and in any other statewhere Borrower has been advised by its legal counsel to register as a foreigncorporation.

5.3     EachSubsidiary Bank is authorized to transact business in the respective statewhere its banking office is located.

5.4     Theexecution, delivery and performance of this Agreement, the Current Notes, andthe Term Notes by the Borrower are within its corporate powers, have been dulyauthorized, and are not in contravention of law, or the terms of the Borrower’sCertificate of Incorporation or By-laws, or of any undertaking to which theBorrower is a party or by which it is bound.

5.5     Theproperty of the Borrower is not subject to any lien except liens disclosed inwriting to the Banks prior to the Closing Date.

5.6     Nolitigation or Governmental proceeding is pending or, to the knowledge of theofficers of the Borrower, threatened against the Borrower which could have amaterial adverse effect on the financial condition or business of the Borrower.

5.7     Allauthorizations of governmental agencies, bodies or authorities which arenecessary to permit the transactions contemplated by this letter agreement havebeen obtained and are in full force and effect, and no further approval,consent, order or authorization of or designation, registration, declaration orfiling with any governmental authority is required in connection withconsummation of the transactions contemplated by this letter agreement.

5.8     Asof the date of this Agreement, there exists no event of default under the PriorLoan Agreement, nor does there exist any event which, with the giving of noticeor the passage of time (or both), could become such an event of default.

5.9     Allfinancial statements delivered to the Banks by or on behalf of Borrower,including any schedules and notes pertaining thereto, have been prepared inaccordance with GAAP consistently applied, and fully and fairly present thefinancial condition of the Borrower at the dates thereof and the results ofoperations for the periods covered thereby, and there have been no materialadverse changes in the consolidated financial condition or business of theBorrower from December 31, 1998 to the date hereof.

5.10   TheBorrower’s use of the proceeds of the Advances will not result in a violationof Regulation U issued by the Board of Governors of the Federal Reserve System.

          SECTION 6  Affirmative Covenants

          TheBorrower covenants and agrees that, for so long as the Credit or the Tem Loanremain in existence or any indebtedness remains outstanding under the Current Notesor the Term Notes, unless the Majority Banks (via the Agent) shall otherwiseconsent in writing, it will:

6.1     Paywhen due (and cause each other member of the Bank Group to pay when due) alltaxes assessed against it or its respective property, except to the extent andfor so long as contested in good faith in a manner that prevents enforcement ofthe matters being contested for which adequate reserves have been provided.

6.2     Maintain(and cause each other member of the Bank Group to maintain) its respectivecorporate existence and comply in all material respects with all laws andregulations applicable thereto,

6.3     Furnishdirectly to the Banks:

          A.      As soon as available, and in any eventwithin 90 days after the end of each fiscal year of the Borrower, the annualfinancial statements of the Borrower, with the unqualified opinion of certifiedpublic accountants acceptable to the Agent, all such statements to be preparedon a basis consistent with the accounting practices reflected in any previouslysubmitted financial statement.  All suchfinancial statements shall be prepared on a consolidated and consolidatingbasis for the Borrower and each other member of the Bank Group.

          B.       As soon as available, and in any eventwithin 90 days after the end of each fiscal year of the Borrower, the AnnualReport of Domestic Bank Holding Companies (FR Y-6) required by the FederalReserve Bank.

          C.      As soon as available, and in any eventwithin 60 days after the end of each fiscal quarter of the Borrower, thecomplete Consolidated Report for Multi-Bank Holding Companies (FR Y-9C)required to be filed by the Borrower with the Federal Reserve Bank in theFederal Reserve District where the Borrower is located.

          D.      As soon as available, and in any eventwithin 60 days after the end of each fiscal quarter of the Borrower, thecomplete Parent Company Only Financial Statement for Multi-Bank HoldingCompanies (FR Y-9LP) required by the Federal Reserve Bank.

          E.       As soon as available, and in any eventwithin 45 days after the end of each quarter of each fiscal year of theBorrower, a Borrower’s Compliance Certificate (attached hereto as Exhibit D) ofthe Secretary or Treasurer of the Borrower (i) certifying that to the best ofhis knowledge, no Event of Default or event which with the giving of notice orlapse of time, or both, would constitute an Event of Default has occurred andis continuing or, if an Event of Default or such event has occurred and iscontinuing, a statement as to the nature thereof and the action which is proposedto be taken with respect thereto, and (ii) with computationsdemonstratingcompliance with the covenants contained in Sections 7.1 through 7.6 hereof.

          F.       Within 15 days after the end of eachmonth, (i) the internally prepared balance sheet of the Subsidiary Banks as ofthe end of such month, prepared on a consolidated basis, and (ii) theinternally prepared income statement of Subsidiary Banks as of the end of such month, prepared on aconsolidating basis.  All of theforegoing shall be prepared in accordance with the requirements imposed byapplicable regulatory authorities and applied on a basis consistent with theaccounting practices reflected in any previous similar statements.

          G.      Within 45 days after the end of eachfiscal quarter of the Subsidiary Banks, a summary, for the Bank Group as awhole, of the Watch List or Problem Loan Reports internally generated by theBorrower.

          H.      Immediately after obtaining knowledgethereof, notice in writing of any litigation wherein any person asserts anyclaim against any member of the Bank Group in excess of $500,000.00, and noticein writing of any proceedings before any governmental or regulatory agencyinvolving any member of the Bank Group which, if decided adversely for anymember of the Bank Group, would have a material adverse affect upon thebusiness or operations of any member of the Bank Group (including withoutlimitation, the issuance or proposed issuance of any Memorandum ofUnderstanding, Cease and Desist Order, or other regulatory action, agreement orunderstanding, with respect to any member of the Bank Group by any federal orstate regulatory agency having jurisdiction or control over any member of theBank Group).

          I.        Prompt notice in writing of anynegotiations to sell more than 5% of the capital stock or assets of any memberof the Bank Group, together with copies of any buy/sell agreement.

          J.        A copy of the Annual Board of DirectorsExamination Report published by any member of the Bank Group, if so requestedby the Agent or the Banks.

          K.      As soon as available, but withoutduplication of any other requirements set forth in this Section 6.3, such otherinformation respecting the financial condition and results of operation of anymember of the Bank Group (i) as required by law to be furnished to anyregulatory authority having jurisdiction over any member of the Bank Group(including without limitation 10Q and 10K reports), and (ii) as the Agent orany Bank may from time to time reasonably request; provided, however, that theprovisions of this Section 6.3(K) shall not apply to any information or reportswhich are prohibited from disclosure pursuant to applicable law or regulation.

          L.       Prompt notice in writing of any changesof the Borrower’s executive management personnel.

          M.      Promptly upon knowledge thereof, notice tothe Agent in writing of the occurrence of any event which has or might, afterthe lapse of time or the giving of notice and the lapse of time, become anEvent of Default.

 

6.4     Maintain(and cause each other member of the Bank Group to maintain) its equipment realestate and other properties in good condition and repair (normal wear and tearexcepted), and pay and discharge or cause to be paid and discharged when due,the cost of repairs to or maintenance of the same, and will pay or cause to bepaid all rental or mortgage payments due on such real estate.

6.5     Causeits properties (and the properties of each other member of the Bank Group) ofan insurable nature to be adequately insured by reputable and solvent insurancecompanies against loss or damages customarily insured against by personsoperating similar properties, and similarly situated, and carry such otherinsurance (including blanket bond coverage, errors and omissions coverage, andbusiness interruption insurance) as usually carried by persons engaged in thesame or similar businesses and similarly situated.

6.6     Keep true, complete and accurate books,records and accounts in accordance with GAAP.

6.7     Causeeach Subsidiary Bank to be and remain categorized as “well capitalized,” asdefined by the regulatory agencies having jurisdiction over the SubsidiaryBanks.

          SECTION7  Negative Covenants

          Withoutthe written consent of the Majority Banks (via the Agent), for so long as theCredit or the Term Loan remains in existence or any indebtedness remainsoutstanding under the Current Notes or the Term Notes, the Borrower will not:

7.1     Permitthe consolidated Tier I Core Capital of the Bank Group to be less than thegreater of (i) 5.25% of the difference of consolidated total assets minusconsolidated intangible assets and all goodwill, or (ii) the minimum requiredby any regulatory agency having jurisdiction over the Bank Group so that theyare considered by such agency to be well capitalized.

7.2     Permitthe consolidated Tier I Core Capital of The Bank Group to be less than thegreater of (i) $300,000,000 or (ii) the minimum amount required by anyregulatory agency having jurisdiction over The Bank Group so that they areconsidered by such agency to be well capitalized.

7.3     Permitthe consolidated amount of the Bank Group’s non-performing assets to be greaterthan the sum of 15% of the Bank Group’s consolidated Tier I Core Capital plusthe Bank Group’s consolidated Tier 2 Supplementary Capital at any time.

7.4     Permitthe Bank Group’s consolidated net income as a percentage of its consolidatedtotal assets to be less than 1.0% as of the end of each fiscal quarter, basedupon a moving two-quarter average for the period ending June 30, 1999, a movingthree-quarter average for the period ending September 30, 1999, and for eachquarter thereafter a moving four-quarter average, including the current fiscalquarter reported plus the applicable number of immediately preceding fiscalquarters.

7.5     Permit the difference between theconsolidated book value of the Subsidiary Banks’ securities portfolio, minusthe consolidated market value of those securities classified in the“held-to-maturity” category, when expressed as an unrealized securities loss,to be more than 15% of the Subsidiary Banks’ consolidated Tangible EquityCapital as of the end of any fiscal quarter.

7.6     Permitits ratio of Total Liabilities to Core Capital to be greater than 40% as of theend of any fiscal quarter.

7.7     Permitthe consolidated amount of the Bank Group’s non-performing assets to be greaterthan 100% of the Bank Group’s consolidated allowance for loan and lease losses.

7.8     Grantor suffer a lien upon any of its personal property assets (including withoutlimitation stock in any Subsidiary Bank), other than Permitted Liens.

7.9     Enterinto any transaction of merger or consolidation, or transfer, sell, assign,lease or otherwise dispose of (other than in the ordinary course of business)all or a substantial part of its properties or assets, or any of its notes oraccounts receivable, or any stock or any assets or properties necessary ordesirable for the proper conduct of its business, or change the nature of itsbusiness or wind up, liquidate or dissolve, or agree to do any of theforegoing.

7.10   Purchaseany stock or other securities of, or make any loans or advances of credit to,or make any investments or acquire any controlling interest whatsoever in, anyother corporation, bank, or non-bank institution other than the SubsidiaryBanks existing as such as of the Closing Date, except in the ordinary course ofbusiness where such purchase, loan, advance, investment or acquisition isspecifically authorized by any federal or state regulatory agency havingjurisdiction or control over the Borrower or the Subsidiary Banks and where theaggregate asset size of such acquisition does not exceed $250,000,000; providedthat the Agent and the Banks will not unreasonably withhold consent so long asthe proforma effect of such action does not create a violation of thisAgreement.

7.11   Repurchaseor retire any stock of the Subsidiary Banks, or pay a dividend with respect toany class of its stock, if the proforma effect of such repurchase, retirementor dividend payment would be a violation of this Agreement.

7.12   Issueany debt or equal instruments of any type or class other than common stock anddebt expressly subordinated (on written terms, acceptable to the Banks) toindebtedness owed to the Banks.

7.13   Makeany modification to any instrument creating or evidencing subordinated debt, ormake any prepayment of subordinated debt.

7.14   Assume,guarantee, endorse or otherwise become directly or indirectly liable inconnection with the obligations of any other person or entity, except for theendorsement of negotiable instruments in the ordinary course of business,guaranties of lease obligations of the Borrower’s subsidiaries in the ordinarycourse of business, and existing guaranties in favor of Community First ServiceCorporation, Community First Properties, Inc., Community Insurance, Inc., orany other subsidiary of which the Borrower owns, directly or indirectly, atleast 80% of the common stock.

7.15   Incur any indebtedness other than (i)subordinated indebtedness referred to in Section 7.12 hereof, (ii) unsecuredindebtedness owed to Norwest as of the Closing Date, and (iii) otherindebtedness acceptable to the Majority Banks.

          SECTION 8  Events of Default

8.1     Upon the occurrence of anyof the following Events of Default:

          A.      Default in any payment of interest or ofprincipal on any Current Note or the Term Note or the when due, and continuancethereof for 10 calendar days;

          B.       The failure of the Borrower to pay anyfee when due in accordance with the provisions of this Agreement, andcontinuance of such failure for 10 calendar days;

          C.      Default in the observance or performanceof any one or more of the covenants set forth in Section 6.7 or in Section 7hereof,

          D.      Default in the observance or performanceof any other agreement of the Borrower set forth herein (i.e., other than thoseaddressed in Sections 8.1(A), 8.1(B) or 8.2(C) hereof), and continuance thereoffor 30 calendar days;

          E.       Default in any payment of interest or ofprincipal on any other promissory note (i.e., other than the Current Notes andthe Term Note) made by the Borrower and held by any of the Banks, andcontinuance thereof for 10 calendar days;

          F.       Default by the Borrower in the payment ofany other indebtedness for Borrowed Money in an amount exceeding $500,000.00 orin the observance or performance of any term, covenant or agreement of theBorrower in any agreement relating to any such indebtedness of the Borrower,the effect of which default is to permit the holder of such indebtedness todeclare the same due prior to the date fixed for its payment under the terms thereof;

          G.      Any judgment or judgments, writ or writs,or warrantor warrants of attachment, or any similar process or processes, theaggregate amount of which (after reduction by the amount covered by insurance)exceeds $500,000.00, shall be entered or filed against the Borrower or anySubsidiary Bank or against any of its property and which remains unvacated,unbonded, unstayed or unsatisfied for a period of 30 calendar days;

          H.      Any representation or warranty made by theBorrower herein, or in any statement or certificate furnished by the Borrowerhereunder is untrue in any material respect; or,

          I.        Theissuance or proposed issuance, against any member of the Bank Group, of anycease and desist order, memorandum of understanding or capital maintenanceagreement by any federal or state regulator agency having jurisdiction orcontrol over such member; provided, however, that this Section 8.1(1) shall notapply to supervisory actions outstanding against any institution as of the dateof acquisition of such institution by the Borrower then, or at any timethereafter, unless such Event of Default is remedied, the Majority Banks (viathe Agent) may, by notice in writing to the Borrower, terminate the Credit andthe Term Loan and declare the Current Notes and the Term Notes to be due andpayable, or any or all of the foregoing, whereupon the Credit and Term Loanshall terminate forthwith and the Current Notes and the Term Notes shallimmediately become due and payable, or any or all of the foregoing, as the casemay be.

8.2     Uponthe occurrence of any of the following Events of Default:

Any member of the Bank Group becomesinsolvent or bankrupt, or makes an appointment for the benefit of creditors orconsents to the appointment of a custodian, trustee or receiver for itself orfor the greater part of its properties; or a custodian, trustee or receiver isappointed for any member of the Bank Group or, for the greater part of itsproperties without its consent, and is not discharged within 60 calendar days;or bankruptcy, reorganization or liquidation proceedings are instituted by oragainst any member of the Bank Group and, if instituted against it, areconsented to by it or remain undismissed for 60 calendar days; then the Creditand the Term Loan shall automatically terminate and the Current Notes and theTerm Notes shall automatically become immediately due and payable, withoutnotice or demand.

8.3     Inaddition to its other obligations as set forth in this Agreement, if theindebtedness evidenced by the Current Notes or the Term Notes is acceleratedpursuant to Sections 8.1 or 8.2 hereof, the borrower shall immediately pay theBanks a premium in respect of Eurodollar Borrowings outstanding as of suchdate.  The premium on each suchEurodollar Borrowing shall be calculated as follows:

The amount of interest that would haveaccrued on the Eurodollar Borrowing (from the date of acceleration to the lastday of the relevant Interest Period) computed at an annual rate equal to (i)the rate then in effect with respect to the Eurodollar Borrowing, minus(ii) the yield (including both interest and discount) on a hypothetical UnitedStates Treasury Security that could be purchased on the date of accelerationand maturing on (or about) the last day of the relevant Interest Period, providedthat no premium shall be payable (and no credit or rebate shall be given) ifthe yield described in clause (ii) above exceeds the rate described in clause(i).

          SECTION9  The Agent

9.1     Each Bank hereby appoints Norwest as itsAgent under and for the purpose of this Agreement,  the Current Notes, the Term Notes, and each other relateddocument.  Each Bank authorized theAgent to act on behalf of such Bank under this Agreement, the Current Notes,the Term Notes, and each other related document and, in the absence of otherwritten instructions from the Majority Banks received from time to time by theAgent (with respect to which the Agent agrees that it will comply, except asotherwise provided in this Section 9 or as otherwise advised by counsel thatsuch compliance would be unlawful), to exercise such powers hereunder andthereunder as are specially delegated to or required of the Agent by the termshereof and thereof, together with such powers as may be reasonably incidentalthereto.  Notwithstanding any otherprovision in this Agreement, the Agent shall not, without the prior writtenconsent of each Bank, (i) increase the amount of the Credit, the CreditPercentages, the amount of the Term Loan, or the Term Loan Percentages, (ii)modify any interest rate or fee applicable to the Current Notes or the TermNotes, (iii) modify the Credit Expiration Date, the Term Loan Maturity Date,the last day of any Interest Period or the date on which any payment in respectof the Current Notes or the Term Note is due, (iv) forgive all or any portionof any payment of principal or interest due under the Current Notes or the TermNote, or (v) modify any provision of this sentence.  All other provisions set forth in this Agreement, other thanthose specified in the immediately preceding sentence, may be modified onlywith the approval of the Majority Banks. The Agent is hereby expressly authorized by the Banks without herebylimiting any implied authority, (i) to receive on behalf of the Banks allpayments of principal of and interest on the Advances and the Term Loan, andall other amounts due to the Banks hereunder, and promptly to distribute toeach Bank its proper share of each payment so received, and (ii) to give noticeon behalf of each of the Banks to the Borrower of any Event of Defaultspecified in this Agreement of which the Agent has actual knowledge acquired inconnection with its agency hereunder. Each Bank hereby indemnities (which indemnity shall survive any terminationof this Agreement) the Agent, in its capacity as Agent, prorataaccording to such Bank’s Credit Percentage and Term Loan Percentage, from andagainst any and all liabilities, obligations, losses, damages, claims, costs orexpenses of any kind or nature whatsoever which may at any time be imposed on,incurred by, or asserted against, the Agent in any way relating to or arisingout of this Agreement, the Current Notes, the Term, Notes, and any otherrelated document, including reasonable attorneys’ fees, and as to which theAgent is not reimbursed by the Borrower; provided, however, that no Bank shallbe liable for the payment of any portion of such liabilities, obligations,losses, damages, claims, costs or expenses which are determined by a court ofcompetent jurisdiction in a final proceeding to have resulted solely from theAgent’s gross negligence or willful misconduct.  The Agent shall not be required to take any action hereunder,under the Current Notes, the Term Notes, or under any other related document,or to prosecute or defend any suit in respect of this Agreement, the CurrentNotes, the Term Notes, or any other related document, unless it is indemnifiedhereunder to its satisfaction.  If anyindemnity in favor of the Agent shall be or become, in the Agentsdetermination, inadequate, the Agent may call for additional indemnificationfrom the Banks and cease to do the acts indemnified against hereunder untilsuch additional indemnity is given.

9.2     Unless the Agent shall have been notifiedby telephone, confirmed in writing, by any Bank by 3:00 p.m., Minneapolis time,on the day of the making of any Advance that such Bank will not make availablethe amount which would constitute its Credit Percentage or Term Loan Percentageof such Advance on the date specified therefor, the Agent may assume that suchBank has made such amount available to the Agent and, in reliance upon suchassumption, make available to the Borrower a corresponding amount.  If and to the extent that such Bank shallnot have made such amount available to the Agent, such Bank and Borrowerseverally agree to repay the Agent forthwith on demand such correspondingamount together with interest thereon, for each day from the date the Agentmade such amount available to the Borrower to the date such amount is repaid tothe Agent, at the interest rate applicable at the time of such Advance to theextent such Advance is repaid by the Borrower and at the Federal Funds Rate tothe extent such Advance is repaid by such Bank.

9.3     Neitherthe Agent nor any of its directors, officers, employees or agents shall beliable to any Bank for any action taken or omitted to be taken by the Agentunder this Agreement or any other related document, or in connection herewithor therewith, except for its own willful misconduct or gross negligence, norresponsible for any recitals or warranties herein or therein, nor for theeffectiveness, enforceability, validity or due execution of this Agreement orany other related document, nor for the creation, perfection or priority of anyliens purported to be created by any related documents, or the validity,genuineness, enforceability, existence, value or sufficiency of any collateralsecurity, nor to make any inquiry respecting the performance by the Borrower ofits obligations hereunder or under any other related document.  Any such inquiry which may be made by theAgent shall not obligate it to make any further inquiry or to take anyaction.  The Agent shall be entitled torely upon advice of counsel concerning legal maters and upon any notice, consent,certificate, statement or writing which the Agent believes to be genuine and tohave been presented by a proper person.

9.4     TheAgent may resign as such at any time upon at least 30 days’ prior notice to theBorrower and all Banks, if the Agent at any time shall resign, the MajorityBanks may appoint another Bank as a successor Agent which shall thereuponbecome the Agent hereunder.  If nosuccessor Agent shall have been so appointed by the Majority Banks, and shallhave accepted such appointment, within 30 days after the retiring Agents’giving notice of resignation, then the retiring Agent may, on behalf of theBanks, appoint a successor Agent, which shall be one of the Banks or acommercial banking institution organized under the laws of the United States(or any state thereof or a U.S. branch or agency of a commercial banking,institution, and having a combined capital and surplus of at least$500,000,000.  Upon the acceptance ofany appointment as agent hereunder by a successor Agent, such successor Agentshall be entitled to receive from any retiring Agent such documents of transferand assignment as such successor Agent may reasonably request, and shallthereupon succeed to and become vested with all rights, powers, privileges andduties of the retiring Agent and the retiring Agent shall be discharged fromits duties and obligation under this Agreement After any retiring Agent’sresignation hereunder as the Agent, the provisions of this Section 9 shallcontinue to inure to its benefit as to any actions taken or omitted to be takenby it while it was the Agent under this Agreement.

9.5     Norwestshall have the same rights and powers with respect to (i) loans made by it orany of its affiliates, and (ii) promissory notes held by it or any of itsaffiliates as any other Bank and may prosecute the same as if it were not theAgent.  Norwest and its affiliate mayaccept deposits from lend money to, and generally engage in any kind ofbusiness with the Borrower or any affiliate of the Borrower as if Norwest werenot the Agent hereunder.

9.6     Each Bank acknowledges that it has,independently of the Agent and each other Bank, and based on such Bank’s reviewof the financial information of the Borrower, this Agreement, the other relateddocuments (the terms and provisions of which being satisfactory to such Bank)and such other documents, information and investigations as such Bank hasdeemed appropriate, made its own credit decision to enter into thisAgreement.  Each Bank also acknowledgesthat it will, independently of the Agent and each other Bank, and based on suchother documents, information and investigations as it shall deem appropriate atany time, continue to make its own credit decisions as to exercising or notexercising from time to time any rights and privileges available to it underthis Agreement or any other related document.

9.7     Exceptas permitted under the terms and conditions of this Section 9.7 or, withrespect to participations, under Section 9.8 hereof, no Bank may sell, assignor transfer its rights or obligations under this Agreement or its interest inany Current Note or any Term Note.  AnyBank, at any time upon at least five (5) Business Days’ prior written notice tothe Agent and the Borrower, may assign such Bank’s Current Note or Term Note,or a portion thereof (so long as any such portion is not less than$2,500,000.00 and is in equal percentages of such assigning Bank’s interest inthe Credit and the Term Loan), to a domestic bank (an “Applicant”) on any date(the “Adjustment Date”) selected by such Bank, but only so long as theBorrowers and the Agent shall have provided their prior written approval ofsuch proposed Applicant, which prior written approval will not be unreasonablywithheld.  Notwithstanding theforegoing, (i) assignments may be made by a Bank to another Bank already aparty to this Agreement in an amount not less than $1,000,000.00, and (ii) nosuch consent of the Borrower shall be required to sale of an interest to anaffiliate of a Bank or, in any event, if an Event of Default shall exist.  Upon receipt of such approval and to confirmthe status of each additional Bank as a party to this Agreement and to evidencethe assignment in accordance herewith:

          A.      The Agent, the Borrower, the assigningBank and such Applicant shall, on or before the Adjustment Date, execute anddeliver to the Agent an Assignment Certificate in substantially the form ofExhibit E (an “Assignment Certificate”);

          B.       The affected Borrower will execute anddeliver to the Agent, for delivery by the Agent in accordance with the terms ofthe Assignment Certificate, (i) a new Current Note payable to the order of theApplicant in an amount corresponding to the applicable commitment acquired bysuch Applicant, (ii) a new Current Note payable to the order of the assigningBank in an amount corresponding to the retained Credit Percentage, (iii) a newTerm Note payable to the order of the Applicant in an amount corresponding tothe applicable commitment acquired by such Applicant, and (iv) a new Term Notepayable to the order of the assigning Bank in an amount corresponding to theretained Term Loan Percentage.  Such newnotes shall be in an aggregate principal amount equal to the aggregateprincipal amount of the notes to be replaced by such new notes, shall be datedthe effective date of such assignment and shall otherwise be in the form of thenotes to be replaced thereby.  Such newnotes shall be issued in substitution for, but not in satisfaction or paymentof, the notes being replaced thereby and such new notes shall be treated asnotes for purposes of this Agreement; and,

          C.      The assigning Bank shall pay to theapplicable Agent an administrative fee of $2,500.00.

Upon the execution and delivery of suchAssignment Certificate and such new Current Notes and Term Notes,and effective as of the effective date thereof, (i) this Agreement shall bedeemed to be amended to the extent, and only to the extent, necessary toreflect the addition of such additional Bank and the resulting adjustment ofthe Credit Percentages and Term Loan Percentages arising therefrom, (ii) theassigning Bank shall be relieved of all obligations hereunder to the extent ofthe reduction of the assigning Bank’s Credit Percentages and Term LoanPercentage, and (iii) the Applicant shall become a party hereto and shall beentitled to all rights, benefits and privileges accorded to a Bank herein andin each other document or instrument executed pursuant hereto and subject toall obligations of a Bank hereunder, including, without limitation, the rightto approve or disapprove actions which, in accordance with the terms hereof,require the approval of the Majority Banks or all Banks.  Promptly after the execution of anyAssignment Certificate, a copy thereof shall be delivered by the Agent to eachBank and to the Borrowers.  In order tofacilitate the addition of additional Banks hereto, the Borrower and the Banksshall cooperate fully with the Agent in connection therewith and shall provideall reasonable assistance requested by the Agent relating thereto, including,without limitation, the furnishing of such written materials and financialinformation regarding the Borrower as the Agent may reasonably request, theexecution of such documents as the Agent may reasonably request with respectthereto, and the participation by officers of the Borrower, and the Banks in ameeting or teleconference call with any Applicant upon the request of theAgent.

9.8     Inaddition to the rights granted in Section 9.7 hereof, each Bank may grantparticipations in all or a portion of its Current Note or its Term Note to anydomestic or foreign commercial bank (having a branch office in the UnitedStates), insurance company, financial institution or an affiliate of suchBank.  No holder of any suchparticipation, however, shall be entitled to require any Bank to take or omitto take any action hereunder except those actions described in Section 9.1hereof requiring consent of all Banks. The Banks shall not, as among the ]Borrowers, the Agent and the Banks,be relieved of any of their respective obligations hereunder as a result of anysuch grant of a participation.  TheBorrowers hereby acknowledge and agree that any participation described in thisSection 9.8 may rely upon, and possess all rights under, any opinions, certificates,or other instruments or documents delivered under or in connection with anyLoan Document, except as set forth in this Section 9.8, no Bank may grant anyparticipation in the Credit or the Term Loan.

9.9     EachBank hereby agrees with each other Bank that if such Bank shall receive andretain any payment, whether by set-off or application of deposit balances orotherwise (“Set-off”), in respect of any Advance, in excess of its ratableshare of payments based on its Credit Percentage and its Term Loan Percentage,then such Bank shall purchase for cash at face value, but without recourse,ratably from each of the other Banks such amount of the Advances, orParticipations therein, held by each such other Banks (or interest therein) asshall be necessary to cause such Bank to share such excess payment ratably withall the other Banks; provided, however, that if any such purchase is made byany Bank, and if such excess payment or part thereof is thereafter recoveredfrom such purchasing Bank, the related purchases from the other Banks shall berescinded ratably and the purchase price restored as to the portion of suchexcess payment so recovered, but without interest.

9.10   All payments of principal, interest and feesunder this Agreement shall be applied pro rata to the Banks in the sameproportions that the aggregate obligations owed to each Bank under thisAgreement bear to the aggregate obligations owed to all Banks under thisAgreement without priority or preference among the Banks or between the Creditand the Term Loan.  The obligations ofthe Banks to indemnify the Agent set out on Section 9.1 of this Agreement shallbe pro rata according to the proportions that each Bank’s Credit Percentage andTerm Loan Percentage bears to the aggregate total of all Banks’ CreditPercentages and Term Loan Percentages.

          SECTION10  Miscellaneous

10.1   Theprovisions of this Agreement shall be in addition to those of any guaranty,pledge or security agreement, note or other evidence of liability held by theBanks, all of which shall be construed as complementary to each other.  Nothing herein contained shall prevent theBanks from enforcing any or all of the rights and remedies available to them atlaw, in equity or by agreement.

10.2   Fromtime to time, the Borrower will execute and deliver (or cause to be executedand delivered) to the Agent such additional documents and will provide suchadditional information as the Banks may reasonably require to carry out theterms of this Agreement and be informed of the status and affairs of theBorrower and the other members of the Bank Group.

10.3   TheBorrower will pay all expenses, including the reasonable fees and expenses oflegal counsel for each of the Banks, including without limitation the allocatedcosts of in-house counsel, incurred in connection with the administration,amendment, modification or enforcement of this Agreement, the Current Notes,the Term Notes, and the other documents described herein.

10.4   Anynotices or consents required or permitted by this Agreement shall be in writingand shall be deemed delivered if delivered in person or if sent by UnitedStates mail, postage prepaid, or telegraph or telex, as follows, unless suchaddress is changed by written notice hereunder:

| A.     | If  to the Borrower;                                                                      |
|--------|-------------------------------------------------------------------------------------------|
|   |                                                                                      |
|   |      Community  First Bankshares, Inc.                           |
|   |      P.O. Box 6022                                               |
|   |      Fargo,  North Dakota 58108-6022                             |
|   |      Attention.  Mark A. Anderson, Executive Vice President |