SIXTH MODIFICATION
OF
CREDIT AGREEMENT
This Sixth Modification of Credit Agreement ("Agreement") is made
this 10th day of July, 1998, among THE ROTTLUND COMPANY, INC., a
Minnesota corporation ("Borrower"), BANKBOSTON, N.A., formerly known
as THE FIRST NATIONAL BANK OF BOSTON, a national bank association
having its principal place of business at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 ("BKB"), and BANKBOSTON N.A., as Agent (the
"Agent") for itself and the other lending institutions which are or
may become parties to the Credit Agreement (as hereinafter defined).
W I T N E S S E T H:
IN CONSIDERATION OF TEN AND NO/100 DOLLARS ($10.00) and other
good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned Borrower and BKB hereby
covenant and agree as follows:
1. RECITALS. The following Recitals are true and correct as of
the date of this Agreement.
(a) The Borrower, BKB and the Agent entered into that
certain Credit Agreement dated as of October 23, 1996, and that
certain First Modification of Credit Agreement dated November 19,
1996, that certain Second Modification of Credit Agreement dated
December 24, 1996, that certain Third Modification of Credit Agreement
dated January 28, 1997, that certain Fourth Modification of Credit
Agreement dated June 25, 1997, and that certain Fifth Modification of
Credit Agreement dated January 15, 1998 (the foregoing Credit
Agreement, as modified, is referred to herein as "Credit Agreement").
(b) The parties to the Credit Agreement wish to further
amend and modify the Credit Agreement.
(c) All terms not otherwise defined herein shall have the
same meaning as in the Credit Agreement.
2. The Credit Agreement is hereby modified as follows:
(a) By substituting "$25,000,000"for "$23,850,000" in
Section 10.1;
(b) By substituting "March 31, 1998" for "June 30, 1996" in
Section 10.1; and
(c) By deleting the provisions of Section 10.3 in their
entirety and by substituting in lieu thereof "EBITDA TO INTEREST
EXPENSE. The Borrower will not permit the ratio of (a) EBITDA for any
fiscal quarter to (b) Interest Incurred for such period to be less
than the ratio set forth below:
PERIOD PERMITTED RATIO
Quarter ending March 31, 1998 Waived
Quarter ending June 30, 1998 1.30:1
Quarter ending September 30, 1998 2.10:1
Quarter ending December 31, 1998 2.30:1
For the quarter ending March 31, 1999 and continuing to Maturity
Date such ratio shall be tested for each period of four consecutive
fixed quarters and shall be no less than 2.00:1."
3. The Effective Date of this Sixth Modification shall be as of
March 31, 1998 so that, without limitation, compliance with all
covenants contained in the Credit Agreement shall be determined from
modifications contained herein.
4. BKB waives the covenants contained in Section 10.2 of the
Credit Agreement for the period June 30, 1998, through September 30,
1998. The parties hereto acknowledge and agree that the waiver
provided in the preceding sentence will terminate and, beginning on
October 1, 1998, the covenants contained in Section 10.2 of the Credit
Agreement shall be maintained and enforced.
5. Except as modified hereby, the terms and conditions of the
Credit Agreement shall remain in full force and effect and the
Borrower hereby ratifies the terms and conditions thereof.
6. By its execution hereof, Borrower warrants and represents
that there does not, as of the date hereof, exist a default, event of
default or event or circumstance with which the passage of time or
giving of notice, or both, would constitute a default or event of
default under any of the Loan Documents. By its execution hereof,
Borrower reaffirms, as of the date hereof, all of the representations,
warranties and indemnities contained in the Loan Documents except to
the extent any of the representations or warranties speak to a
specific earlier date, or the facts on which any of them were based
have been changed by transactions contemplated or permitted by the
Loan Documents. As of the date hereof, Borrower has no defense,
offset or counterclaim against the indebtedness evidenced or secured
by any of the Loan Documents, as amended, or against the Agent or the
Banks.
7. This Agreement may be executed in any number of counterparts
each of which shall be deemed an original.
IN WITNESS WHEREOF, the undersigned Borrower and Agent have
hereunto caused this instrument to be executed by their duly
authorized corporate officers and their seal to be affixed hereto as
of the day and year first above written.
THE ROTTLUND COMPANY, INC., a
Minnesota corporation
By: ______________________________
Title: _____________________________
BANKBOSTON, N.A.
By: ______________________________
The undersigned guarantors hereby agree to all modifications of
the Credit Agreement and hereby ratify and reaffirm their respective
Subsidiary Guaranty dated as of the day and year first above written.
NORTHCOAST MORTGAGE, INC.
By: ______________________________
Its: ______________________________
ROTTLUND HOMES OF FLORIDA, INC.
By: ________________________________
Its: ________________________________
ROTTLUND HOMES OF INDIANA, INC.
By: Rottlund Homes of Indiana, Inc.,
Its General Partner
By: ____________________________
Its: ____________________________
ROTTLUND HOMES OF INDIANA
LIMITED PARTNERSHIP
By: ________________________________
Its: ________________________________
ROTTLUND HOMES OF IOWA, INC.
By: ________________________________
Its. ________________________________
ROTTLUND HOMES OF NEW JERSEY
By: ________________________________
Its: ________________________________
