Document:

Prepared by MerrillDirect

Exhibit
10.1

 

 

 

 

 

 

 

 

 

COMMUNITY FIRST BANKSHARES, INC.

ANNUAL INCENTIVE PLAN

2000

 

	
  2000 AIP

  

  	 
  	 
  	 
  
	
  GROUP

  

  	 
  	
  TARGET INCENTIVE

  

  	
  MAXIMUM

  

  
	
       I
  	
  CEO
  	
  50%
  	
  100%
  
	 
  	 
  	 
  	 
  
	
       II
  	
  VICE CHAIRS/EVP’S
  	
  35%
  	
  70%
  
	 
  	 
  	 
  	 
  
	
       III
  	
  SVP’S
  	
  25%
  	
  50%
  
	 
  	 
  	 
  	 
  
	
       IV
  	
  VP’S
  	
  15%
  	
  30%
  

 

	
  SPLIT 50% INTERNAL & 50% EXTERNAL

  

  	 
  	 
  
	 
  	
  TARGET

  

  	
  INTERNAL

  

  	
  EXTERNAL

  

  
	
            I
  	
  50%
  	
  25%
  	
  25%
  
	 
  	 
  	 
  	 
  
	
            II
  	
  35%
  	
  17.5%
  	
  17.5%
  
	 
  	 
  	 
  	 
  
	
            III
  	
  25%
  	
  12.5%
  	
  12.5%
  
	 
  	 
  	 
  	 
  
	
            IV
  	
  15%
  	
  7.5%
  	
  7.5%
  

 

	
  INTERNAL AWARD CALCULATION

  

  	 
  

Based
on performance versus plan EPS as target.

No award if less than 90% of plan.

Double internal amount @ 110% of plan (see schedule).

Round up at .5 (plan) and down at <.5.

 

	 
  	 
  	 
  	
  Award % of Base Salary

  

  	 
  
	
   
  % of Plan

  

  	
  Fully Diluted

  EPS

  

  	
   
  I

  

  	
   
  II

  

  	
   
  III

  

  	
   
  IV

  

  
	

90.00%

  	
  $1.530
  	
  0.000%
  	
  0.000%
  	
  0.000%
  	
  0.000%
  
	

91.00%

  	
  $1.547
  	
  2.500%
  	
  1.750%
  	
  1.250%
  	
  0.750%
  
	

92.00%

  	
  $1.564
  	
  5.000%
  	
  3.500%
  	
  2.500%
  	
  1.500%
  
	

93.00%

  	
  $1.581
  	
  7.500%
  	
  5.250%
  	
  3.750%
  	
  2.250%
  
	

94.00%

  	
  $1.598
  	
  10.000%
  	
  7.000%
  	
  5.000%
  	
  3.000%
  
	

95.00%

  	
  $1.615
  	
  12.500%
  	
  8.750%
  	
  6.250%
  	
  3.750%
  
	

96.00%

  	
  $1.632
  	
  15.000%
  	
  10.500%
  	
  7.500%
  	
  4.500%
  
	

97.00%

  	
  $1.649
  	
  17.500%
  	
  12.250%
  	
  8.750%
  	
  5.250%
  
	

98.00%

  	
  $1.666
  	
  20.000%
  	
  14.000%
  	
  10.000%
  	
  6.000%
  
	

99.00%

  	
  $1.683
  	
  22.500%
  	
  15.750%
  	
  11.250%
  	
  6.750%
  
	

100.00%

  	
  $1.700
  	
  25.000%
  	
  17.500%
  	
  12.500%
  	
  7.500%
  
	

101.00%

  	
  $1.717
  	
  27.500%
  	
  19.250%
  	
  13,750%
  	
  8.250%
  
	

102.00%

  	
  $1.734
  	
  30.000%
  	
  21.000%
  	
  15.000%
  	
  9.000%
  
	

103.00%

  	
  $1.751
  	
  32.500%
  	
  22.750%
  	
  16.250%
  	
  9.750%
  
	

104.00%

  	
  $1.768
  	
  35.000%
  	
  24.500%
  	
  17,500%
  	
  10.500%
  
	

105.00%

  	
  $1.785
  	
  37.500%
  	
  26.250%
  	
  18.750%
  	
  11.250%
  
	

106.00%

  	
  $1.802
  	
  40.000%
  	
  28.000%
  	
  20.000%
  	
  12.000%
  
	

107.00%

  	
  $1.819
  	
  42.500%
  	
  29.750%
  	
  21.250%
  	
  12.750%
  
	

108.00%

  	
  $1.836
  	
  45.000%
  	
  31.500%
  	
  22.500%
  	
  13.500%
  
	

109.00%

  	
  $1.853
  	
  47.500%
  	
  33.250%
  	
  23.750%
  	
  14.250%
  
	

110.00%

  	
  $1.870
  	
  50.000%
  	
  35.000%
  	
  25.000%
  	
  15.000%
  

 

	
  EXTERNAL AWARD CALCULATION

  

  	 
  

SNL
peer group (30 banks) for current performance year based on group as of
12/31/98.

Combines
incentive for Return on Equity (ROE) and Total Shareholder Return (TSR) (see
matrix).

SNL 20 Bank Group

 

	

Percentile

  	

85th or higher

  	

100%

  	

150%

  	

200%

  
	

ROE

  	

50th*

  	

50%

  	

100%

  	

150%

  
	 

  	

49th or lower

  	

0%

  	

50%

  	

100%

  
	 

  	 

  	

49th or lower

  	

50th *

  	

85th or higher

  
	 

  	 

  	 

  	 

  	

Percentile TSR

  

 

*Award will be prorated from 50th%
to 85th%.

External
award calculation:

	 
  	 
  	 
  	
  % of Salary at Performance Level

  

  
	 
  	
  Target

  

  	 
  	
  50%

  

  	
  100%
  	
  150%
  	
  20%
  
	
  I
  	
  25%
  	 
  	
  12.5%
  	
  25%
  	
  37.5%
  	
  50%
  
	
  II
  	
  17.5%
  	 
  	
  8.75%
  	
  17.5%
  	
  26.25%
  	
  35%
  
	
  III
  	
  12.5%
  	 
  	
  6.25%
  	
  12.5%
  	
  18.75%
  	
  25%
  
	
  IV
  	
  7.5%
  	 
  	
  3.75%
  	
  7.5%
  	
  11.25%
  	
  15%
  

The
Selected
Peer Group reflects our selection of the 29 other institutions
most like the subject institution to be used as a peer group in comparing
relative compensation levels.  The
automated process searches in sequence for:

	
  1.
  	
  Banks in the same state within 40% of total
  assets.
  
	
  2.
  	
  Banks in the same region within 40% of
  total assets.
  
	
  3.
  	
  Banks in the same state within 80% of total
  assets.
  
	
  4.
  	
  Banks in the same region within 80% of
  total assets.
  
	
  5.
  	
  Any bank within 40% of total assets.
  
	
  6.
  	
  Any bank within 80% of total assts.
  
	
  7.
  	
  Banks closest in asset size.
  

If
at any point in the sequence 29 banks are found, the sequence stops and those
banks form the Selected Peer Group.  If
step six is reached and there are still not 29 other banks, the banks closest
in asset size any where in the country are chosen to round out the peer group.Prepared by MerrillDirect

Exhibit 10.10.1

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

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

RECITALS

          WHEREAS,
the Borrower has requested the Banks (i) to establish a back-up revolving line
of 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 this
Credit Agreement;

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

          SECTION
1  Definitions

          In
addition 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 hereto
which may from time to time become effective hereafter.

1.3     “Bank
Group” shall mean the Borrower and the Subsidiary Banks.

1.4     “Base
Rate” shall mean the “base” or “prime” rate of interest established by Norwest

as in effect and announced from time to time.

1.5     “Base
Rate Borrowing” shall mean those Advances bearing interest at all times at a

variable rate determined by reference to the Base Rate.

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

1.7     “Business Day” shall mean (i) for all
purposes other than those described in the following clause (ii), any day on
which the Agent is open for transacting substantially all of its commercial
business, and (ii) with respect to all notices and determinations in connection
with, and payments of principal of and interest on, Eurodollar Borrowings, any
Business Day described in preceding clause (i) on which trading by and between
banks in United States Dollar deposits in the London Interbank Eurodollar
market is transacted.

1.8     “Closing
Date” shall mean the date on which this Agreement is fully executed and
delivered to the Agent.

1.9     “Core
Capital” shall mean the sum of the consolidated total equity of the Bank Group
plus capital and trust preferred Securities.

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

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

1.12   “Credit
Expiration Date” shall mean April 30, 2000.

1.13   “Credit
Percentages” shall mean, relative to any Bank, the percentages identified as
such set forth opposite the signature block for such Bank on the last page of
this Agreement.

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

1.15   “Eurodollar
Borrowing” shall mean those Advances bearing interest at all times during the
relevant Interest Period at a fixed rate determined by reference to the
Eurodollar Rate.

1.16   “Eurodollar
Rate” shall mean, with respect to any Interest Period for any Eurodollar
Borrowing, the rate per annum (rounded up to the nearest one-sixteenth of one
percent) equal to the offered quotation to the Agent in the London Interbank
Eurodollar market for United States Dollar deposits for delivery on the first
day 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 Eurodollar
Borrowing to be outstanding during such Interest Period, determined as of
approximately 12:00 Noon, Minneapolis time, two Business Days before the
beginning of such Interest Period.

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

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

1.19   “Federal Funds Rate” shall mean the overnight
market 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 of
dollars to the Agent for deposit, as such rate may increase or decrease from
time to time.

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

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

1.22   “Interest
Period” means, with respect to any Eurodollar Borrowing, (a) initially, the
period commencing on, as the case may be, the date on which such Eurodollar
Borrowing is made or the date on which such Eurodollar Borrowing results from
the conversion of a Base Rate Borrowing or a Federal Funds Borrowing and ending
one, 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 immediately
preceding Interest Period and ending one, two, three or six months thereafter,
as selected by irrevocable notice to the Agent (which notice must be received
by the Agent before 12:00 Noon, Minneapolis time, three Business Days before
the last day of the then current Interest Period with respect to such
Eurodollar Borrowing); provided, however, that (i) if any Interest Period would
otherwise end on a day that is not a Business Day, that Interest Period shall
be extended to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another calendar month,
in which event such Interest Period shall end on the immediately preceding
Business Day, (ii) the Borrower may not select an Interest Period that would
otherwise 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 no
notice is given with respect to selection on an Interest Period as provided
above, the affected Eurodollar Borrowing shall be converted to a Base Rate
Borrowing on the last day of the Interest Period then in effect and (iv) any
Interest Period that begins on the last Business Day of a calendar month (or on
a date for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of
a calendar month.

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

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

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

1.26   “Reserve
Adjusted 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 rate
obtained by dividing (i) the Eurodollar Rate for such Interest Period by (ii) a
percentage equal to 1 minus the Reserve Requirement in effect from time to time
during such Interest Period.

1.27   “Reserve
Requirement” shall mean, relative to the Interest Period applicable to any
Eurodollar Borrowing, a percentage (expressed as a decimal) equal to the
aggregate 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 such
interest Period) on the first day of such Interest Period as specified under
F.R.S. Board Regulation D or any other F.R.S. Board regulation then in effect
which prescribes reserve requirements applicable to non-personal time deposits
(as currently defined in such Regulation D), applicable to the class of banks
of which the Banks are members, on deposits of the type used as a reference in
determining the Reserve Adjusted Eurodollar Rate and having a maturity
approximately equal to such Interest Period.

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

1.29   “Tangible
Equity Capital” shall mean the sum of perpetual preferred stock, common stock
surplus and undivided profits, capital reserves, and net unrealized holding
gains (and losses) on “available-for-sale” securities, as disclosed in the
Subsidiary Banks’ Call Reports.

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

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

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

1.33   “Term
Loan Percentages” shall mean, relative to any Bank, the percentages identified
as such set forth opposite the signature block for such Bank on the last page
of this Agreement.

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

1.35.  “Tier
1 Core Capital” shall mean the core capital elements set forth by the Federal
Reserve Board in 12 CFR Parts 208 and 225.

1.36   “Tier
2 Supplementary Capital” shall mean the allowance for loan and lease losses, as
disclosed in the Subsidiary Banks, Call Reports.

1.37   “Total Liabilities” shall mean the aggregate
amount of the Borrower’s total 
liabilities.. less capital and trust preferred securities to the extent
included as total liabilities.

          SECTION 2  The Credit

2.1     Subject to the other
provisions of this Agreement, each Bank shall make Credit Advances to the
Borrower under The Credit from time to time from the effective date hereof
until the Credit Expiration Date in aggregate principal amounts not exceeding
such 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 an
authorized officer of the Borrower.  The
proceeds of the initial Credit Advance shall be used for the exclusive purpose
of paying off any indebtedness outstanding under Section 2 of the Prior Loan
Agreement.  Each request (other than the
request for the initial Credit Advance) shall be accompanied by a Notice of
Borrowing, substantially in the form of attached Exhibit C, stating (among
other things) that the proceeds of the requested Credit Advance will be used
only to pay commercial paper notes at maturity.  Each Credit Advance shall be made on a Business Day, and shall be
comprised of either a Base Rate Borrowing, a federal Funds Borrowing, or
(provided there exists no Event of Default) a Eurodollar Borrowing, as
requested by the Borrower.  Any Credit
Advance for which the Borrower fails to specify at the time of the related
request either a Base Rate Borrowing, a Federal Funds Borrowing or a Eurodollar
Borrowing shall be a Base Rate Borrowing. 
Requests for Credit Advances must be received by the Agent no later than
12:00 Noon, Minneapolis time, on the day of an Credit Advance comprised of a
Base Rate Borrowing or a Federal Funds Borrowing, and no later than 12:00 Noon,
Minneapolis time, on the third Business Day immediately preceding an Credit
Advance comprised of a Eurodollar Borrowing. 
The person making the request may ask the Agent to quote an indication
of the Eurodollar Rate which would be applicable to the Credit Advance for an
Interest 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 immediately
accepted, the requested Credit Advance shall be a Eurodollar Borrowing;
provided, however, that each Credit Advance comprised of a Eurodollar Borrowing
shall be in the amount of $5,000,000.00, or a greater amount in increments of
$1,000,000.00.  Each request for an
advance shall be deemed a representation and warranty by the Borrower that the
representations and warranties set forth in Section 5 hereof are true as of the
date of such request.  Each Credit
Advance will be evidenced by a notation on each Bank’s records, which shall be
conclusive evidence of such Credit Advance, and by the related Current
Note.  Within the limits of the Credit
and subject to the terms and conditions hereof, the Borrower may borrow, prepay
pursuant to Section 2.11 hereof and reborrow pursuant to this Section 2.1.

2.2     The Agent shall notify each Bank of each
request 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 of
Section 2.1 hereof and to the further provisions of this Section 2.2, the Agent
will 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, on
such Business Day, each Bank shall deposit with the Agent same-day funds in an
amount equal to such Bank’s Percentage of the related Credit Advance.  Such deposit will be made to an account
which the Agent shall specify from time to time by notice to the Banks.  To the extent funds are received from the
Banks in accordance with this Section 2.2, the Agent shall make such funds
available to the Borrower by wire transfer to the account(s) the Borrower shall
have designated to the Agent at or before the time of the related request.

2.3     Eurodollar
Borrowings may be continued as such upon the expiration of an Interest Period
with respect thereto by compliance with the notice provisions set forth in
Sections 1.22 and 2.1 hereof, provided, however, that Eurodollar Borrowings may
not be continued as such when any Event of Default exists, but (subject to the
Bank’s rights under Section 8 hereof) shall be automatically converted to Base
Rate Borrowings on the last day of the existing Interest Period.  If the Borrower shall fail to notify the
Bank of its desire to continue a Eurodollar Borrowing, as described in the
first sentence of this Section 2.3, such borrowing shall be automatically
converted to a Base Rate Borrowing on the last day of the existing Interest
Period.

2.4     For
so long as there exists no Event of Default, and subject to the dollar
restrictions specified in Section 2.1 hereof, the Borrower may elect to convert
any Base Rate Borrowing or Federal Funds Borrowing to a Eurodollar Borrowing by
compliance with the notice provisions set forth in Sections 1.22 and 2.1
hereof.  The Borrower may elect to
convert any Eurodollar Borrowing to a Base Rate Borrowing or Federal Funds
Borrowing on the last day of the related Borrow Interest Period by compliance
with the notice provisions set forth in Sections 1.22 and 2.1 hereof.

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

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

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

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

2.9     Interest on the unpaid principal of each
Eurodollar Borrowing shall be payable in arrears on the related Interest
Payment Date.

2.10   The
principal of tile Current Notes shall be repayable on the Credit Expiration
Date.

2.11   The
Borrower may at any time prepay Base Rate Borrowings and Federal Funds
Borrowings in whole or from time to time in part without premium or
penalty.  The Borrower may prepay any
Eurodollar Borrowing only in its entirety and only on the last day of the
relevant Interest Period.

2.12   If
the Agent or any Bank determines (which determination shall be conclusive and
binding upon the Borrower) that by reason of circumstances affecting the
Interbank Eurodollar market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for any Interest Period with respect to (i) a
proposed Eurodollar Borrowing or (ii) the continuation of Eurodollar Borrowings
beyond the expiration of the then current Interest Period with respect thereto,
the Agent shall forthwith give immediate notice of such determination to the
Borrower at least one Business Day before, as the case may be, the requested
borrowing date for such Eurodollar Borrowings on the last day of such Interest
Period.  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 day
of the then-current Interest Period with respect thereto, to Base Rate
Borrowings.  Until such notice has been
withdrawn by the Agent, no further Eurodollar Borrowings shall be made, nor
shall the Borrower have the right to convert Base Rate Borrowings or Federal
Funds Borrowings into Eurodollar Borrowings.

2.13   Notwithstanding
any other provision hereof, if any law, regulation, treaty or directive or any
change therein or in the interpretation or application thereof by any
governmental authority, agency or instrumentality or any court makes it
unlawful for any Bank to make or maintain Eurodollar Borrowings as contemplated
by this Agreement, such Bank and the Agent shall give notice (by telephone
confirmed in writing) thereof to the Borrower, and (i) such Bank’s commitment
to make Eurodollar Borrowings shall forthwith be canceled, (ii) each
then-outstanding Eurodollar Borrowing (if any) shall automatically be converted
to a Base Rate Borrowing on the last day of the then-current Interest Period
for such Eurodollar Borrowing or within such earlier period as required by law,
and (iii) such Bank shall thereafter make any requested Eurodollar Borrowing
available as a Base Rate Borrowing.  The
Borrower hereby agrees promptly to pay such Bank, upon demand, any additional
amount necessary to compensate such Bank for any costs incurred by such Bank in
making any conversion of Eurodollar Borrowings in accordance with this Section
2.13, including (but not limited to) any interest or fees payable by such Bank
to lenders of funds obtained by it in order to make or maintain such Eurodollar
Borrowings (the Bank’s notice of such costs, as certified to the Borrower, to
be conclusive absent manifest error).

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

          SECTION
3  The Term Loan

3.1     Subject
to the other provisions of this Agreement, each Bank shall make Term Loan
Advances to the Borrower under the Term Loan from time to time from the
effective date hereof until the Term Loan Maturity Date in aggregate principal
amounts at any one time outstanding not exceeding such Bank’s Term Loan
Percentage of the Maximum Term Loan Amount determined pursuant to Section 3.2
hereof.  Each Term Loan Advance will be
requested to the Agent in writing by an authorized officer of the Borrower on a
Notice of Borrowing substantially in the form of Exhibit C hereto.  The proceeds of the initial Term Loan
Advance shall be used for the exclusive purpose of paying off any indebtedness
outstanding under Section 3 of the Prior Loan Agreement.  Requests for Term Loan Advances must be
received by the Agent no later than 12:00 Noon, Minneapolis time, on the day of
a Term Loan Advance comprised of a Base Rate Borrowing or a Federal Funds
Borrowing, and no later than 12:00 Noon, Minneapolis time, on the third
Business Day immediately preceding a Term Loan Advance comprised of a
Eurodollar Borrowing.

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

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

3.4         The Term Loan shall be comprised of
Base 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 an
amount, or for an Interest Period, which would cause the Borrower to make a
prepayment of such Eurodollar Borrowing prior to the last day of such Interest
Period in order to comply with the principal repayment schedule set forth in
Section 3.8 hereof subject to the provisions of Section 3.5 hereof, interest on
that portion of the unpaid principal of the Term Note comprised of a Base Rate
Borrowing shall be calculated at an annual rate equal to the Base Rate in
effect 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 of
a Federal Funds Borrowing shall be calculated at an annual rate equal to one
and one-quarter percent (1.25%) in excess of the Federal funds Rate in effect
from 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 Note
comprised of a Eurodollar Borrowing shall be calculated for each Interest
Period at a fixed annual rate equal to the sum of the Reserve Adjusted
Eurodollar Rate determined for such Interest Period plus one and one-quarter
percent (1.25%).  Reference is hereby
made to Sections 1.22, 2.1, 2.3 and 2.4 for statements of the terms relating to
notice requirements for the creation, continuance or conversion of Base Rate
Borrowings, Federal Funds Borrowings and Eurodollar Borrowings.  Interest on the Term Note shall be
calculated on basis of the actual number of days elapsed in a year of 360 days.

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

3.6     Interest
on the unpaid principal of Base Rate Borrowings and federal Funds Borrowings
shall be payable quarterly, commencing June 3 0, 1999, and continuing on the
last day of each succeeding calendar quarter, and on the Term Loan Maturity
Date.

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

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

3.9     The
Borrower may at any time prepay Base Rate Borrowings and Federal Funds
Borrowings in whole or from time to time in part without premium or
penalty.  Reference is hereby made to
Section 2.11 for statements of the terms pursuant to which Eurodollar Borrowings
may be prepaid.  Prepayments shall be
applied to scheduled installments in chronological order of their maturities.

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

          SECTION 4  Conditions Precedent

4.1     The
Borrower represents that the following documents, delivered to the Agent in
connection with the Prior Loan Agreement, have not been amended or rescinded
and remain in full force and effect.

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

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

4.2     The
Borrower shall deliver the following to the Agent, in form and content
acceptable to the Agent, on or before the Closing Date:

          A.      A certified (as of the Closing Date) copy
of 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) of
an officer of the Borrower as to the incumbency and signatures of the officers
of the Borrower signing this Agreement, the Current Notes, the Term Note, and
each other document to be delivered pursuant hereto;

          C.      The Current Notes, duly executed by the
Borrower;

          D.      The Term Notes, duly executed by the
Borrower;

          E.       All instruments and documents comprising
subordinated debt issued by the Borrower and remaining unpaid as of the Closing
Date; and,

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

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

          B.       No Event of Default, and no event which
might become an Event of Default after the lapse of time or the giving of
notice and the lapse of time, has occurred and is continuing or will exist upon
the date of such funding.

          SECTION
5  Representations and Warranties

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

5.1     The Borrower is a corporation, duly
organized, existing and in good standing under the laws of the State of
Delaware.

5.2     The Borrower is authorized to transact
business in the states of Delaware and North Dakota and in any other state
where Borrower has been advised by its legal counsel to register as a foreign
corporation.

5.3     Each
Subsidiary Bank is authorized to transact business in the respective state
where its banking office is located.

5.4     The
execution, delivery and performance of this Agreement, the Current Notes, and
the Term Notes by the Borrower are within its corporate powers, have been duly
authorized, and are not in contravention of law, or the terms of the Borrower’s
Certificate of Incorporation or By-laws, or of any undertaking to which the
Borrower is a party or by which it is bound.

5.5     The
property of the Borrower is not subject to any lien except liens disclosed in
writing to the Banks prior to the Closing Date.

5.6     No
litigation or Governmental proceeding is pending or, to the knowledge of the
officers of the Borrower, threatened against the Borrower which could have a
material adverse effect on the financial condition or business of the Borrower.

5.7     All
authorizations of governmental agencies, bodies or authorities which are
necessary to permit the transactions contemplated by this letter agreement have
been obtained and are in full force and effect, and no further approval,
consent, order or authorization of or designation, registration, declaration or
filing with any governmental authority is required in connection with
consummation of the transactions contemplated by this letter agreement.

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

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

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

          SECTION 6  Affirmative Covenants

          The
Borrower covenants and agrees that, for so long as the Credit or the Tem Loan
remain in existence or any indebtedness remains outstanding under the Current Notes
or the Term Notes, unless the Majority Banks (via the Agent) shall otherwise
consent in writing, it will:

6.1     Pay
when due (and cause each other member of the Bank Group to pay when due) all
taxes assessed against it or its respective property, except to the extent and
for so long as contested in good faith in a manner that prevents enforcement of
the 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 respective
corporate existence and comply in all material respects with all laws and
regulations applicable thereto,

6.3     Furnish
directly to the Banks:

          A.      As soon as available, and in any event
within 90 days after the end of each fiscal year of the Borrower, the annual
financial statements of the Borrower, with the unqualified opinion of certified
public accountants acceptable to the Agent, all such statements to be prepared
on a basis consistent with the accounting practices reflected in any previously
submitted financial statement.  All such
financial statements shall be prepared on a consolidated and consolidating
basis for the Borrower and each other member of the Bank Group.

          B.       As soon as available, and in any event
within 90 days after the end of each fiscal year of the Borrower, the Annual
Report of Domestic Bank Holding Companies (FR Y-6) required by the Federal
Reserve Bank.

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

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

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

          F.       Within 15 days after the end of each
month, (i) the internally prepared balance sheet of the Subsidiary Banks as of
the end of such month, prepared on a consolidated basis, and (ii) the
internally prepared income statement of 
Subsidiary Banks as of the end of such month, prepared on a
consolidating basis.  All of the
foregoing shall be prepared in accordance with the requirements imposed by
applicable regulatory authorities and applied on a basis consistent with the
accounting practices reflected in any previous similar statements.

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

          H.      Immediately after obtaining knowledge
thereof, notice in writing of any litigation wherein any person asserts any
claim against any member of the Bank Group in excess of $500,000.00, and notice
in writing of any proceedings before any governmental or regulatory agency
involving any member of the Bank Group which, if decided adversely for any
member of the Bank Group, would have a material adverse affect upon the
business or operations of any member of the Bank Group (including without
limitation, the issuance or proposed issuance of any Memorandum of
Understanding, Cease and Desist Order, or other regulatory action, agreement or
understanding, with respect to any member of the Bank Group by any federal or
state regulatory agency having jurisdiction or control over any member of the
Bank Group).

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

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

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

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

          M.      Promptly upon knowledge thereof, notice to
the Agent in writing of the occurrence of any event which has or might, after
the lapse of time or the giving of notice and the lapse of time, become an
Event of Default.

 

6.4     Maintain
(and cause each other member of the Bank Group to maintain) its equipment real
estate and other properties in good condition and repair (normal wear and tear
excepted), 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 be
paid all rental or mortgage payments due on such real estate.

6.5     Cause
its properties (and the properties of each other member of the Bank Group) of
an insurable nature to be adequately insured by reputable and solvent insurance
companies against loss or damages customarily insured against by persons
operating similar properties, and similarly situated, and carry such other
insurance (including blanket bond coverage, errors and omissions coverage, and
business interruption insurance) as usually carried by persons engaged in the
same or similar businesses and similarly situated.

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

6.7     Cause
each Subsidiary Bank to be and remain categorized as “well capitalized,” as
defined by the regulatory agencies having jurisdiction over the Subsidiary
Banks.

          SECTION
7  Negative Covenants

          Without
the written consent of the Majority Banks (via the Agent), for so long as the
Credit or the Term Loan remains in existence or any indebtedness remains
outstanding under the Current Notes or the Term Notes, the Borrower will not:

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

7.2     Permit
the consolidated Tier I Core Capital of The Bank Group to be less than the
greater of (i) $300,000,000 or (ii) the minimum amount required by any
regulatory agency having jurisdiction over The Bank Group so that they are
considered by such agency to be well capitalized.

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

7.4     Permit
the Bank Group’s consolidated net income as a percentage of its consolidated
total assets to be less than 1.0% as of the end of each fiscal quarter, based
upon a moving two-quarter average for the period ending June 30, 1999, a moving
three-quarter average for the period ending September 30, 1999, and for each
quarter thereafter a moving four-quarter average, including the current fiscal
quarter reported plus the applicable number of immediately preceding fiscal
quarters.

7.5     Permit the difference between the
consolidated book value of the Subsidiary Banks’ securities portfolio, minus
the 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 Equity
Capital as of the end of any fiscal quarter.

7.6     Permit
its ratio of Total Liabilities to Core Capital to be greater than 40% as of the
end of any fiscal quarter.

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

7.8     Grant
or suffer a lien upon any of its personal property assets (including without
limitation stock in any Subsidiary Bank), other than Permitted Liens.

7.9     Enter
into 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 or
accounts receivable, or any stock or any assets or properties necessary or
desirable for the proper conduct of its business, or change the nature of its
business or wind up, liquidate or dissolve, or agree to do any of the
foregoing.

7.10   Purchase
any 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, any
other corporation, bank, or non-bank institution other than the Subsidiary
Banks existing as such as of the Closing Date, except in the ordinary course of
business where such purchase, loan, advance, investment or acquisition is
specifically authorized by any federal or state regulatory agency having
jurisdiction or control over the Borrower or the Subsidiary Banks and where the
aggregate asset size of such acquisition does not exceed $250,000,000; provided
that the Agent and the Banks will not unreasonably withhold consent so long as
the proforma effect of such action does not create a violation of this
Agreement.

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

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

7.13   Make
any modification to any instrument creating or evidencing subordinated debt, or
make any prepayment of subordinated debt.

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

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

          SECTION 8  Events of Default

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

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

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

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

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

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

          F.       Default by the Borrower in the payment of
any other indebtedness for Borrowed Money in an amount exceeding $500,000.00 or
in the observance or performance of any term, covenant or agreement of the
Borrower in any agreement relating to any such indebtedness of the Borrower,
the effect of which default is to permit the holder of such indebtedness to
declare 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, the
aggregate amount of which (after reduction by the amount covered by insurance)
exceeds $500,000.00, shall be entered or filed against the Borrower or any
Subsidiary 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 the
Borrower herein, or in any statement or certificate furnished by the Borrower
hereunder is untrue in any material respect; or,

          I.        The
issuance or proposed issuance, against any member of the Bank Group, of any
cease and desist order, memorandum of understanding or capital maintenance
agreement by any federal or state regulator agency having jurisdiction or
control over such member; provided, however, that this Section 8.1(1) shall not
apply to supervisory actions outstanding against any institution as of the date
of acquisition of such institution by the Borrower then, or at any time
thereafter, unless such Event of Default is remedied, the Majority Banks (via
the Agent) may, by notice in writing to the Borrower, terminate the Credit and
the Term Loan and declare the Current Notes and the Term Notes to be due and
payable, or any or all of the foregoing, whereupon the Credit and Term Loan
shall terminate forthwith and the Current Notes and the Term Notes shall
immediately become due and payable, or any or all of the foregoing, as the case
may be.

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

Any member of the Bank Group becomes
insolvent or bankrupt, or makes an appointment for the benefit of creditors or
consents to the appointment of a custodian, trustee or receiver for itself or
for the greater part of its properties; or a custodian, trustee or receiver is
appointed for any member of the Bank Group or, for the greater part of its
properties without its consent, and is not discharged within 60 calendar days;
or bankruptcy, reorganization or liquidation proceedings are instituted by or
against any member of the Bank Group and, if instituted against it, are
consented to by it or remain undismissed for 60 calendar days; then the Credit
and the Term Loan shall automatically terminate and the Current Notes and the
Term Notes shall automatically become immediately due and payable, without
notice or demand.

8.3     In
addition to its other obligations as set forth in this Agreement, if the
indebtedness evidenced by the Current Notes or the Term Notes is accelerated
pursuant to Sections 8.1 or 8.2 hereof, the borrower shall immediately pay the
Banks a premium in respect of Eurodollar Borrowings outstanding as of such
date.  The premium on each such
Eurodollar Borrowing shall be calculated as follows:

The amount of interest that would have
accrued on the Eurodollar Borrowing (from the date of acceleration to the last
day 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 United
States Treasury Security that could be purchased on the date of acceleration
and maturing on (or about) the last day of the relevant Interest Period, provided
that no premium shall be payable (and no credit or rebate shall be given) if
the yield described in clause (ii) above exceeds the rate described in clause
(i).

          SECTION
9  The Agent

9.1     Each Bank hereby appoints Norwest as its
Agent under and for the purpose of this Agreement,  the Current Notes, the Term Notes, and each other related
document.  Each Bank authorized the
Agent 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 other
written instructions from the Majority Banks received from time to time by the
Agent (with respect to which the Agent agrees that it will comply, except as
otherwise provided in this Section 9 or as otherwise advised by counsel that
such compliance would be unlawful), to exercise such powers hereunder and
thereunder as are specially delegated to or required of the Agent by the terms
hereof and thereof, together with such powers as may be reasonably incidental
thereto.  Notwithstanding any other
provision in this Agreement, the Agent shall not, without the prior written
consent of each Bank, (i) increase the amount of the Credit, the Credit
Percentages, 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 Term
Notes, (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 respect
of the Current Notes or the Term Note is due, (iv) forgive all or any portion
of any payment of principal or interest due under the Current Notes or the Term
Note, or (v) modify any provision of this sentence.  All other provisions set forth in this Agreement, other than
those specified in the immediately preceding sentence, may be modified only
with the approval of the Majority Banks. 
The Agent is hereby expressly authorized by the Banks without hereby
limiting any implied authority, (i) to receive on behalf of the Banks all
payments of principal of and interest on the Advances and the Term Loan, and
all other amounts due to the Banks hereunder, and promptly to distribute to
each Bank its proper share of each payment so received, and (ii) to give notice
on behalf of each of the Banks to the Borrower of any Event of Default
specified in this Agreement of which the Agent has actual knowledge acquired in
connection with its agency hereunder. 
Each Bank hereby indemnities (which indemnity shall survive any termination
of this Agreement) the Agent, in its capacity as Agent, pro rata
according to such Bank’s Credit Percentage and Term Loan Percentage, from and
against any and all liabilities, obligations, losses, damages, claims, costs or
expenses 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 arising
out of this Agreement, the Current Notes, the Term, Notes, and any other
related document, including reasonable attorneys’ fees, and as to which the
Agent is not reimbursed by the Borrower; provided, however, that no Bank shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, claims, costs or expenses which are determined by a court of
competent jurisdiction in a final proceeding to have resulted solely from the
Agent’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 Current
Notes, the Term Notes, or any other related document, unless it is indemnified
hereunder to its satisfaction.  If any
indemnity in favor of the Agent shall be or become, in the Agents
determination, inadequate, the Agent may call for additional indemnification
from the Banks and cease to do the acts indemnified against hereunder until
such additional indemnity is given.

9.2     Unless the Agent shall have been notified
by 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 available
the amount which would constitute its Credit Percentage or Term Loan Percentage
of such Advance on the date specified therefor, the Agent may assume that such
Bank has made such amount available to the Agent and, in reliance upon such
assumption, make available to the Borrower a corresponding amount.  If and to the extent that such Bank shall
not have made such amount available to the Agent, such Bank and Borrower
severally agree to repay the Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date the Agent
made such amount available to the Borrower to the date such amount is repaid to
the Agent, at the interest rate applicable at the time of such Advance to the
extent such Advance is repaid by the Borrower and at the Federal Funds Rate to
the extent such Advance is repaid by such Bank.

9.3     Neither
the Agent nor any of its directors, officers, employees or agents shall be
liable to any Bank for any action taken or omitted to be taken by the Agent
under this Agreement or any other related document, or in connection herewith
or therewith, except for its own willful misconduct or gross negligence, nor
responsible for any recitals or warranties herein or therein, nor for the
effectiveness, enforceability, validity or due execution of this Agreement or
any other related document, nor for the creation, perfection or priority of any
liens purported to be created by any related documents, or the validity,
genuineness, enforceability, existence, value or sufficiency of any collateral
security, nor to make any inquiry respecting the performance by the Borrower of
its obligations hereunder or under any other related document.  Any such inquiry which may be made by the
Agent shall not obligate it to make any further inquiry or to take any
action.  The Agent shall be entitled to
rely upon advice of counsel concerning legal maters and upon any notice, consent,
certificate, statement or writing which the Agent believes to be genuine and to
have been presented by a proper person.

9.4     The
Agent may resign as such at any time upon at least 30 days’ prior notice to the
Borrower and all Banks, if the Agent at any time shall resign, the Majority
Banks may appoint another Bank as a successor Agent which shall thereupon
become the Agent hereunder.  If no
successor Agent shall have been so appointed by the Majority Banks, and shall
have accepted such appointment, within 30 days after the retiring Agents’
giving notice of resignation, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, which shall be one of the Banks or a
commercial 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 of
any appointment as agent hereunder by a successor Agent, such successor Agent
shall be entitled to receive from any retiring Agent such documents of transfer
and assignment as such successor Agent may reasonably request, and shall
thereupon succeed to and become vested with all rights, powers, privileges and
duties of the retiring Agent and the retiring Agent shall be discharged from
its duties and obligation under this Agreement After any retiring Agent’s
resignation hereunder as the Agent, the provisions of this Section 9 shall
continue to inure to its benefit as to any actions taken or omitted to be taken
by it while it was the Agent under this Agreement.

9.5     Norwest
shall have the same rights and powers with respect to (i) loans made by it or
any of its affiliates, and (ii) promissory notes held by it or any of its
affiliates as any other Bank and may prosecute the same as if it were not the
Agent.  Norwest and its affiliate may
accept deposits from lend money to, and generally engage in any kind of
business with the Borrower or any affiliate of the Borrower as if Norwest were
not 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 review
of the financial information of the Borrower, this Agreement, the other related
documents (the terms and provisions of which being satisfactory to such Bank)
and such other documents, information and investigations as such Bank has
deemed appropriate, made its own credit decision to enter into this
Agreement.  Each Bank also acknowledges
that it will, independently of the Agent and each other Bank, and based on such
other documents, information and investigations as it shall deem appropriate at
any time, continue to make its own credit decisions as to exercising or not
exercising from time to time any rights and privileges available to it under
this Agreement or any other related document.

9.7     Except
as permitted under the terms and conditions of this Section 9.7 or, with
respect to participations, under Section 9.8 hereof, no Bank may sell, assign
or transfer its rights or obligations under this Agreement or its interest in
any Current Note or any Term Note.  Any
Bank, at any time upon at least five (5) Business Days’ prior written notice to
the 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 in
the 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 the
Borrowers and the Agent shall have provided their prior written approval of
such proposed Applicant, which prior written approval will not be unreasonably
withheld.  Notwithstanding the
foregoing, (i) assignments may be made by a Bank to another Bank already a
party to this Agreement in an amount not less than $1,000,000.00, and (ii) no
such consent of the Borrower shall be required to sale of an interest to an
affiliate of a Bank or, in any event, if an Event of Default shall exist.  Upon receipt of such approval and to confirm
the status of each additional Bank as a party to this Agreement and to evidence
the assignment in accordance herewith:

          A.      The Agent, the Borrower, the assigning
Bank and such Applicant shall, on or before the Adjustment Date, execute and
deliver to the Agent an Assignment Certificate in substantially the form of
Exhibit E (an “Assignment Certificate”);

          B.       The affected Borrower will execute and
deliver to the Agent, for delivery by the Agent in accordance with the terms of
the Assignment Certificate, (i) a new Current Note payable to the order of the
Applicant in an amount corresponding to the applicable commitment acquired by
such Applicant, (ii) a new Current Note payable to the order of the assigning
Bank in an amount corresponding to the retained Credit Percentage, (iii) a new
Term Note payable to the order of the Applicant in an amount corresponding to
the applicable commitment acquired by such Applicant, and (iv) a new Term Note
payable to the order of the assigning Bank in an amount corresponding to the
retained Term Loan Percentage.  Such new
notes shall be in an aggregate principal amount equal to the aggregate
principal amount of the notes to be replaced by such new notes, shall be dated
the effective date of such assignment and shall otherwise be in the form of the
notes to be replaced thereby.  Such new
notes shall be issued in substitution for, but not in satisfaction or payment
of, the notes being replaced thereby and such new notes shall be treated as
notes for purposes of this Agreement; and,

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

Upon the execution and delivery of such
Assignment Certificate and such new Current Notes and Term Notes,
and effective as of the effective date thereof, (i) this Agreement shall be
deemed to be amended to the extent, and only to the extent, necessary to
reflect the addition of such additional Bank and the resulting adjustment of
the Credit Percentages and Term Loan Percentages arising therefrom, (ii) the
assigning Bank shall be relieved of all obligations hereunder to the extent of
the reduction of the assigning Bank’s Credit Percentages and Term Loan
Percentage, and (iii) the Applicant shall become a party hereto and shall be
entitled to all rights, benefits and privileges accorded to a Bank herein and
in each other document or instrument executed pursuant hereto and subject to
all obligations of a Bank hereunder, including, without limitation, the right
to 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 any
Assignment Certificate, a copy thereof shall be delivered by the Agent to each
Bank and to the Borrowers.  In order to
facilitate the addition of additional Banks hereto, the Borrower and the Banks
shall cooperate fully with the Agent in connection therewith and shall provide
all reasonable assistance requested by the Agent relating thereto, including,
without limitation, the furnishing of such written materials and financial
information regarding the Borrower as the Agent may reasonably request, the
execution of such documents as the Agent may reasonably request with respect
thereto, and the participation by officers of the Borrower, and the Banks in a
meeting or teleconference call with any Applicant upon the request of the
Agent.

9.8     In
addition to the rights granted in Section 9.7 hereof, each Bank may grant
participations in all or a portion of its Current Note or its Term Note to any
domestic or foreign commercial bank (having a branch office in the United
States), insurance company, financial institution or an affiliate of such
Bank.  No holder of any such
participation, however, shall be entitled to require any Bank to take or omit
to take any action hereunder except those actions described in Section 9.1
hereof 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 any
such grant of a participation.  The
Borrowers hereby acknowledge and agree that any participation described in this
Section 9.8 may rely upon, and possess all rights under, any opinions, certificates,
or other instruments or documents delivered under or in connection with any
Loan Document, except as set forth in this Section 9.8, no Bank may grant any
participation in the Credit or the Term Loan.

9.9     Each
Bank hereby agrees with each other Bank that if such Bank shall receive and
retain any payment, whether by set-off or application of deposit balances or
otherwise (“Set-off”), in respect of any Advance, in excess of its ratable
share 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, or
Participations therein, held by each such other Banks (or interest therein) as
shall be necessary to cause such Bank to share such excess payment ratably with
all the other Banks; provided, however, that if any such purchase is made by
any Bank, and if such excess payment or part thereof is thereafter recovered
from such purchasing Bank, the related purchases from the other Banks shall be
rescinded ratably and the purchase price restored as to the portion of such
excess payment so recovered, but without interest.

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

          SECTION
10  Miscellaneous

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

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

10.3   The
Borrower will pay all expenses, including the reasonable fees and expenses of
legal counsel for each of the Banks, including without limitation the allocated
costs 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   Any
notices or consents required or permitted by this Agreement shall be in writing
and shall be deemed delivered if delivered in person or if sent by United
States mail, postage prepaid, or telegraph or telex, as follows, unless such
address 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
  

 

 

	
  B.
  	
  If
  to the Agent:
  
	 
  	 
  
	 
  	
       Norwest
  Bank Minnesota, National Association Norwest Center
  
	 
  	
       Sixth Street
  & Marquette Avenue
  
	 
  	
       Minneapolis,
  Minnesota 55479-0015
  
	 
  	
       Attention:  Sidney W. Bennett, Vice President
  

 

                    C.      If to the Banks:

                                        The
address set forth below the signature
line for each Bank.

10.5   The
Banks shall have the right at all times to enforce the provisions of this
Agreement, the Current Notes, the Term Notes, and the other documents described
herein in strict accordance with the terms hereof and thereof, notwithstanding
any conduct or custom on the part of the Banks in refraining from so doing at
any time or times.  The failure of the
Banks at any time or times to enforce its rights under such provisions,
strictly in accordance with the same, shall not be construed as having created
a custom in any way or manner contrary to specific provisions of this Agreement
or as having in any way or manner modified or waived the same.  All rights and remedies of the Bank are
cumulative and concurrent and the exercise of one right or remedy shall not be deemed
a waiver or release of any other right or remedy.

10.7   This
Agreement shall inure to the benefit of, and shall be binding upon, the
respective successors and permitted assigns of the parties hereto.  The Borrower has no right to assign any of
its rights or obligations hereunder without the prior written consent of each
of the Banks.  This Agreement, and the
documents executed and delivered pursuant hereto, constitute the entire
agreement between the parties, and may be amended only by a writing signed on
behalf of each party.  This Agreement
supersedes and replaces the Prior Loan Agreement.

10.8   If
any provision of this Agreement shall be held invalid under any applicable
laws, such invalidity shall not affect any other provision of this Agreement
that can be given effect without the invalid provision, and, to this end, the
provisions hereof are severable.

10.9   This
Agreement may be executed in any number of counterparts, each of which shall

be deemed an original, but which taken together shall constitute one and the
same instrument.

10.10 The
substantive laws of the State of Minnesota shall govern the construction of
this Agreement and the rights and remedies of the parties hereto.

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

	
  NORWEST BANK MINNESOTA,
  	
  COMMUNITY FIRST
  
	
   
  NATIONAL ASSOCIATION, Agent
  	
   
  BANKSHARES, INC.
  

 

	
  By:

  

  	 
  	
  By:  /s/  Mark Anderson

  

  
	
  Sidney W. Bennett, Vice President
  	 
  	
      Mark A. Anderson,
  
	 
  	 
  	
      Vice
  Chairman
  
	 
  	 
  	 
  
	 
  	 
  	
  By:  /s/  Thomas R. Anderson

  

  
	 
  	 
  	
      Thomas
  R. Anderson
  
	 
  	 
  	
      Senior
  Vice President

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