Dated as of March 31, 1998
WAIVER AND AMENDMENT
Principal Life Insurance Company, f/k/a
Principal Mutual Life Insurance Company
Northern Life Insurance Company
Modern Woodmen of America
Royal Neighbors of America
ReliaStar Life Insurance Company of New York
ReliaStar United Services Life Insurance Company
Ladies and Gentlemen:
Reference is made to (i) the Note Agreement dated as of December 2, 1994
(as amended by that certain Letter Amendment dated as of February 15, 1996,
that certain Letter Amendment dated as of December 30, 1996, that certain
Waiver and Amendment dated as of March 31, 1997, and that certain Waiver and
Amendment dated as of December 31, 1997, the "1994 Agreement") among
Principal Mutual Life Insurance Company, n/k/a Principal Life Insurance
Company ("Principal"), Northern Life Insurance Company ("Northern"), Modern
Woodmen of America ("MWA") and Royal Neighbors of America ("RNA", and
together with Principal, Northern and MWA, collectively the "1994
Purchasers") and The Rottlund Company, Inc., a Minnesota corporation (the
"Company"), pursuant to which the 1994 Purchasers purchased promissory notes
of the Company in the aggregate original principal amount of $25,000,000
(collectively, the "1994 Notes") and (ii) the Note Agreement dated as of
February 15, 1996 (as amended by that certain Letter Amendment dated as of
December 30, 1996, that certain Waiver and Amendment dated as of March 31,
1997, and that certain Waiver and Amendment dated as of December 31, 1997,
the "1996 Agreement", and together with the 1994 Agreement, collectively the
"Agreements" and each individually an "Agreement") among Principal, Bankers
Security Life Insurance Society, n/k/a ReliaStar Life Insurance Company of
New York ("Bankers") and United Services Life Insurance Company, n/k/a
ReliaStar United Services Life Insurance Company ("United", and together with
Principal and Bankers, collectively the "1996 Purchasers", and, together with
the 1994 Purchasers, collectively the "Purchasers"), pursuant to which the
1996 Purchasers purchased promissory notes of the Company in the aggregate
original principal amount of $10,000,000 (collectively, the "1996 Notes", and
together with the 1994 Notes, collectively the "Notes" and each individually
a "Note"). Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed thereto in each Agreement.
Reference is further made to the Waiver and Amendment dated as of March
31, 1997 (the "March 1997 Amendment") among the Purchasers and the Company
pursuant to which, among other things, the Company agreed that, under certain
circumstances, the 1994 Notes would bear interest at a rate of 12.61% per
annum and the 1996 Notes would bear interest at the rate of 9.92% per annum
(such interest rate with respect to each Note being herein referred to as the
"Amended Interest Rate" for such Note). The Company acknowledges that each
Note currently bears interest at the Amended Interest Rate applicable to such
Note, and that the references to "12.11%" and "14.11%" in the second
paragraph of Section 1.1 of the 1994 Agreement and in the 1994 Notes are
currently deemed to be "12.61%" and "14.61%", respectively, and the
references to "9.42%" and "11.42%" in the second paragraph of Section 1.1 of
the 1996 Agreement and in the 1996 Notes are currently deemed to be "9.92"
and "11.92%", respectively.
WAIVER
The Company has advised the Purchasers that the Company is at
present in default under Section 5.16 of each of the Agreements, which
defaults the Company hereby acknowledges. The Company hereby requests that
the Purchasers waive such defaults. The Purchasers each hereby waive the
defaults existing as of the date hereof under Section 5.16 of each of the
Agreements, and each Event of
Default arising directly therefrom. The foregoing waiver shall not extend to
any obligation of the Company not expressly so waived or impair any right of
the Purchasers consequent thereon.
AMENDMENTS
The parties have, in addition, agreed to amend certain other
provisions in each of the Agreements as follows:
1 The parties have agreed that in addition to each of the required
monthly prepayments of the Notes currently required by Section
2.1 of each of the Agreements, the Company shall, commencing with
the required monthly prepayment payable August 1, 1998 and
continuing with each such required monthly prepayment until
payment in full of the Notes, prepay the principal amount of the
Notes in an additional aggregate amount of $100,000 with each
such required monthly prepayment, such additional prepayment
amount to be applied pro rata to all Notes outstanding under both
Agreements. To facilitate the payment of such additional
required monthly prepayment together with the payment of the
required monthly prepayments currently required by Section 2.1 of
each of the Agreements, a revised amortization schedule for each
Agreement, attached as Exhibits A and B hereto, has been
prepared, based on the aggregate oustanding principal amount of
the 1994 Notes or the 1996 Notes, as the case may be, following
receipt of the required monthly prepayments currently required by
Section 2.1 of each of the Agreements through and including July
1, 1998. The parties agree that Exhibits A and B hereto are
subject to review for accuracy and verification by the Consultant
(as hereinafter defined) and to conversion by the Consultant for
consistency to a format indicating amounts expressed therein as
per $1,000,000 of original principal (as is the case with the
original amortization schedule attached as Schedule III to each
of the Agreements). The parties further agree that following
such review, verification, and conversion, new Exhibits A and B
hereto shall be forwarded to each Purchaser and to the Company
and thereby be deemed adopted in substitution for the Exhibits A
and B attached hereto. In addition, to further facilitate the
foregoing arrangements, Section 2.1 of each of the Agreements is
hereby amended and restated in its entirety as follows:
2.1 REQUIRED MONTHLY PREPAYMENT. The Company agrees that
on the first day of each month, on the dates indicated
on the Revised Amortization Schedule, it will prepay
the principal indebtedness evidenced by the Notes in
the amount specified for such date in the Revised
Amortization Schedule, subject to adjustment as
provided in Sections 2.2, 2.4. 2.5 and 2.7 hereof. No
premium shall be payable in connection with any
required prepayment made pursuant to this Section 2.1.
For purposes of this Section 2.1, any prepayment shall
be applied pro rata to all Notes then outstanding, and
any prepayment of less than all of the outstanding
principal amount of the Notes pursuant to Sections 2.2,
2.4, 2.5 or 2.7 hereof shall be deemed to be applied to
the amount of scheduled principal prepayments in
inverse order of their maturity.
1 Each of the Agreements is hereby amended to add thereto the following
new Section 2.7:
1.1 OTHER REQUIRED PREPAYMENTS. In the event the Company shall
propose to make a payment to effect a permanent reduction
in the Bank Indebtedness or a reduction of the aggregate
principal amount of loans, advances and other financial
accommodations available to the Company under the Bank
Indebtedness Documents, or in the event the Company
shall propose to permit or suffer to occur a set off in
payment or satisfaction of the Bank Indebtedness or any
portion thereof, the Company shall, on the date of such
payment or set off, effect a prepayment of the
principal amount of the Notes then outstanding, such
prepayment to be in an aggregate amount equal to such
outstanding principal amount of the Notes multiplied by
a fraction, the numerator of which shall be the amount
of the payment or set off to be made with respect to
the Bank Indebtedness and the denominator of which
shall be the principal amount of the Bank Indebtedness
outstanding immediately prior to the payment or set
off, together with accrued interest on the principal
amount to be so prepaid to the date of such prepayment,
and the Make-Whole Premium, if any. Contemporaneously
with such prepayment, the Company shall provide each
Holder written notice by facsimile transmission stating
whether any Make-Whole Premium is payable in connection
with such prepayment, and containing a reasonably
detailed computation of any such Make-Whole Premium or
the basis for determining that no such Make-Whole
Premium is payable.
1 Section 5.4 of each of the Agreements is hereby amended by adding the
following new sentence as the second sentence thereof:
So long as the Notes bear interest at the Amended
Interest Rate, neither the Company nor any Subsidiary
will engage in business in any location or area other
than a location or area in the States of Florida,
Indiana, Iowa, Minnesota or New Jersey.
1 Section 5.5 of each of the Agreements is amended and restated in its
entirety as follows:
1.1 CONSOLIDATED TANGIBLE NET WORTH. The Company shall
at all times maintain Consolidated Tangible Net Worth in
the amount not less than (i) the sum of $24,750,000 PLUS
70% of the positive Consolidated Net Income, if any, for
each Fiscal Quarter commencing on or after April 1, 1997,
LESS (ii) the aggregate amount of net losses, net of
applicable tax effect, realized in any sales of real
property referred to in and permitted by Section 5.9(e)
hereof, but only to the extent such net losses do not
exceed $1,000,000 in the aggregate.
1 The proviso at the end of Section 5.6 of each of the Agreements is
hereby amended by adding the following new sentences at the end
thereof:
For purposes of determining whether the Company and its
Subsidiaries are in compliance with the foregoing
clause (i), with respect to determining the amount of
Consolidated Current Debt as of the last day of any
Fiscal Quarter, the aggregate amount of Bank
Indebtedness outstanding on the first Business Day of
the next Fiscal Quarter shall be deemed the aggregate
amount of Bank Indebtedness outstanding as of the last
day of such preceding Fiscal Quarter. The Company
shall provide such documentation as any Holder may
reasonably request confirming the amount of Bank
Indebtedness which, in accordance with the foregoing
sentence, is deemed to be outstanding as of the last
day of any Fiscal Quarter.
1 Section 5.9 of each of the Agreements is hereby amended (i) by
deleting the word "and" at the end of subsection (c), (ii) by adding
the word "and" at the end of subsection (d), and (iii) by adding
thereto the following new subsection (e):
a the Company may sell all or any portion of the real
property it owns in Inver Grove Heights,
Minnesota, which real property is described in
Schedule V hereto and which the Company refers to
as "Arbor Pointe", for a purchase price of not
less than the appraised value of the portion
proposed to be sold, such purchase price to be
payable in connection with a sale consummated
pursuant to and in accordance with the terms of
that certain Purchase Agreement dated as of April
1, 1998 between the Company as the seller and Xxxx
Companies US, Inc. as the purchaser.
1
Section 5.13(i) of each of the Agreements is hereby amended and
restated in its entirety as follows:
i LEVERAGE RATIO CERTIFICATES. As soon as available and
in any event within 15 days after the close of any
Fiscal Quarter, a Leverage Ratio Certificate,
correctly setting forth whether the Company and
the Subsidiary have met each of the Rate
Adjustment Financial Tests and setting forth
computations (in sufficient detail) required to
establish whether the Rate Adjustment Financial
Tests have been so met, all in reasonable detail
and certified as complete and correct by a
financial officer of the Company;
1 Section 5.13 of each of the Agreements is hereby amended (i) by
changing the lettering of subsection (j) to (k), and (ii) by adding
thereto the following new subsection (j):
a MEETINGS WITH HOLDERS. So long as the Notes bear
interest at the Amended Interest Rate, the Company, at
such times as any Holder may reasonably request (but no
more frequently than once each Fiscal Quarter with
respect to such Holder), will at its expense arrange
for a meeting of a representative of such Holder with
Xxxxx Xxxxxx, Xxxxxxx Xxxxxx and such other members of
the Company's senior management as such Holder may
reasonably request to discuss the finances and affairs
of the Company and its Subsidiaries. This covenant is
in addition to, and not in substitution for, other
covenants in the Sections 5.13 with respect to the
provision by the Company of information, visits and
inspections, and other similar matters.
1 Section 5.16 of each of the Agreements is hereby amended and restated
in its entirety as follows:
5.16 FIXED CHARGES. The Company shall maintain, as of the
close of each month, Net Income Available for Fixed
Charges for the immediately preceding twelve-month
period of at least the following percentages of Fixed
Charges for such twelve-month period:
75% as of the close of each month on and prior to June 30, 1998;
100% as of the close of each month on or prior to
September 30, 1998;
150% as of the close of each month on and prior to
December 31, 1998; and
200% as of the close of each month thereafter.
1 Section 5.19 of each of the Agreements is hereby amended and restated
in its entirety as follows:
5.19 BANK INDEBTEDNESS DOCUMENTS. In addition to the
financial covenants set forth in this Agreement,
the financial covenants set forth in the Bank
Indebtedness Documents (the "Incorporated
Covenants") are incorporated by reference into
this Agreement as if stated herein in full,
together with all defined terms used therein,
PROVIDED, however, that (i) such Incorporated
Covenants, as incorporated herein, shall run in
favor of the Holders, rather than to the parties
set forth in the Bank Indebtedness Documents, and
(ii) any amendments to, waivers as to, or
expiration or cancellation of (by cancellation,
amendment or termination of the Bank Indebtedness
Documents or otherwise) such Incorporated
Covenants and defined terms used therein shall be
deemed to amend, waive compliance with, or
terminate, as the case may be, such Incorporated
Covenants, as incorporated herein, only if
approved or consented to by the Holders; and
PROVIDED FURTHER that if the Bank Indebtedness
Documents are (i) amended to add additional
covenants or modify existing covenants providing
greater protection under the Bank Indebtedness
Documents, or (ii) renewed or replaced by
financing on terms that
contain covenants affording protection to the Holders
substantially equivalent to, or greater than, the
protection provided by the Incorporated Covenants,
such new or amended covenants shall be deemed
incorporated herein as Incorporated Covenants. So
long as the Notes bear interest at the Amended
Interest Rate, the Company shall not pay any
additional consideration (including, without
limitation, any increase in interest rate or
increase or imposition of any fee) under the Bank
Indebtedness Documents in respect of any financial
accommodation required to be made by any lender
thereunder without making a proportionate payment to
the Holders based upon the relative principal
amounts of the Notes then outstanding (provided,
however, that no such payment shall be required to
be made to the Holders with respect to any fee
payable in connection with the amendment,
contemporaneously with the execution and delivery of
the March 1998 Amendment, of the Existing Credit
Agreement). In addition, if the Company shall
renew, extend, substitute, refinance or replace any
Bank Indebtedness or if the Company shall modify any
term or condition of any Bank Indebtedness
Documents, the Company shall give written notice
thereof, together with copies of the Bank
Indebtedness Documents relevant thereto, to all
Holders promptly, but in any event within five days
of the date on which such renewal, extension,
substitution, refinancing, replacement or
modification is effected.
1 Section 5.20 of each of the Agreements is hereby amended and restated
in its entirety as follows:
A. GUARANTIES. In addition to causing the existing
Subsidiaries to execute and deliver the Guaranty, the
Company (i) will promptly secure the execution and
delivery of a guaranty substantially in the form of the
Guaranty from each Subsidiary as may hereafter be
formed and organized, and (ii) will not permit the Bank
Indebtedness to be guaranteed by any other person or
entity unless the obligations of the Company under the
Notes and this Agreement shall be guaranteed by such
person or entity on substantially the same terms and
conditions.
1 Section 6.1 of each of the Agreements is hereby amended (i) by
changing the reference to "5.19" in the third line thereof to "5.20",
and (ii) by changing the parenthetical statement "(individually or in
the aggregate, and including without limitation the Existing Bank
Indebtedness)" to "(individually or in the aggregate, and including
without limitation the Bank Indebtedness)."
1 The definition of "Make-Whole Premium" in Section 8.1 of each of the
Agreements is hereby amended and restated as follows:
"Make-Whole Premium" shall mean, with respect to a
prepayment of the Notes prior to maturity or an acceleration
of the maturity thereof, the excess, if any, of (i) the
Calculated Amount (as hereinafter defined), over (ii) the
principal amount of the Notes to be prepaid or accelerated
(the "Prepaid Principal"). In no event shall the Make-Whole
Premium be less than zero. For purposes hereof, the
"Calculated Amount" shall mean an amount determined by (1)
calculating, as of the date of determination, the present
value of all payments of principal and interest, as
scheduled on the Original Amortization Schedule and
reflecting the Original Interest Rate, which would have been
avoided by any such prepayment or acceleration if payments
had theretofore been made in accordance with the Original
Amortization Schedule and reflecting the Original Interest
Rate (such payments, the present value of which are being
determined, being herein referred to as the "Pro Forma
Payments"), such present value to be determined by
discounting the Pro Forma Payments from the scheduled
payment date to the date of the prepayment or acceleration
at a rate equal to the Formula Yield (such present value
being herein referred to as the "Pro Forma Present Value
Amount"), (2) calculating, as of the date of determination,
the aggregate amount of principal payments included in such
Pro Forma Payments (such amount being herein referred to as
the "Pro Forma Principal Amount"), (3) dividing the Pro
Forma Present Value Amount by the Pro Forma Principal
Amount, rounding the resulting number to five decimal places
(such resulting number being herein referred to as the
"Price"), and (4) multiplying the amount of Prepaid
Principal by the Price.
1 Section 8.1 of each of the Agreements is hereby amended by adding
thereto the following new definitions:
"Amended Interest Rate" with respect to any Note shall mean
the Amended Interest Rate with respect to such Note as
defined in the March 1998 Amendment.
"Bank Indebtedness" shall mean the Existing Bank
Indebtedness and any renewal, extension, substitution,
refinancing, or replacement thereof.
"Bank Indebtedness Documents" shall mean all documents
governing Bank Indebtedness and all other instruments and
documents related thereto given to secure or evidence the
Bank Indebtedness or otherwise executed in connection
therewith, including without limitation the Existing Bank
Indebtedness Documents.
"March 1998 Amendment" shall mean that certain Waiver and
Amendment dated as of March 31, 1998, by and among the
Company and the Purchasers.
"Original Amortization Schedule" shall mean the original
amortization schedule attached to this Agreement as Schedule
III.
"Original Interest Rate" with respect to any Note shall mean
the Original Interest Rate with respect to such Note as
defined in the March 1998 Amendment.
"Rate Adjustment Financial Tests" shall mean the Rate
Adjustment Financial Tests as defined in the March 1998
Amendment.
"Revised Amortization Schedule" shall mean the revised
amortization schedule attached to this Agreement as Schedule
IV.
1 Exhibit A hereto is hereby adopted as "Schedule IV" to the 1994
Agreement, and Exhibit B hereto is hereby adopted as "Schedule IV" to
the 1996 Agreement. Exhibit C hereto is hereby adopted as "Schedule
V" to each of the Agreements.
OTHER AGREEMENTS
As an inducement to and in consideration of the agreement by the Purchasers to
waive the existing defaults under and to amend certain provisions of the
Agreements as set forth herein, the Company hereby agrees with the Purchasers as
follows:
INTEREST RATES. Notwithstanding anything in the Agreements, the Notes, or
the March 1997 Amendment to the contrary:
i if as of the close of any Fiscal Quarter commencing on or
after April 1, 1998 the Company and its Subsidiaries shall
fail to meet any of the financial tests set forth in
Schedule I hereto (collectively, the "Rate Adjustment
Financial Tests") as disclosed in the Leverage Ratio
Certificate referred to in Section 5.13(i) of each of the
Agreements (each a "Leverage Ratio Certificate") for such
Fiscal Quarter, or if the Company fails to deliver the
Leverage Ratio Certificate for such Fiscal Quarter to the
Holders in accordance with Section 5.13(i) of each of the
Agreements (and, in such event, in addition to any other
rights the Holders may exercise under Section 6 of each
Agreement), then, effective as of the first day of and
during the Fiscal Quarter immediately following the Fiscal
Quarter to which the Leverage Ratio Certificate applies
(where the Company delivers such Leverage Ratio Certificate)
or would apply (where the Company fails to do so), as the
case may be, each Note shall bear interest at the Amended
Interest Rate for such Note, and, in connection therewith,
the references to "12.11%" and "14.11%" in the second
paragraph of Section 1.1 of the 1994 Agreement and in the
1994 Notes shall accordingly be deemed to be "12.61% and
"14.61%", respectively, and the references to "9.42%" and
"11.42%" in the second paragraph of Section 1.1 of the 1996
Agreement and in the 1996 Notes shall accordingly be deemed
to be "9.92%" and "11.92%," respectively; and
i if as of the close of any Fiscal Quarter commencing on or
after April 1, 1998, the Company and its Subsidiaries shall
meet each of the Rate Adjustment Financial Tests as
disclosed in the Leverage Ratio Certificate for such Fiscal
Quarter, and if no Default or Event of Default then exists
under the Agreement, then effective as of the first day of
and during the Fiscal Quarter immediately following the
Fiscal Quarter to which the Leverage Ratio Certificate
applies, the 1994 Notes shall bear interest at the rate of
12.11% per annum, and the 1996 Notes shall bear interest at
the rate of 9.42% per annum (such interest rate with respect
to each Note being herein referred to as the "Original
Interest Rate" for
such Note), and, in connection therewith, the references to
"12.11% and "14.11%" in the second paragraph of Section 1.1 of
the 1994 Agreement and in the 1994 Notes and the references to
"9.42%" and "11.42%" in the second paragraph of Section 1.1 of
the 1996 Agreement and in the 1996 Notes shall be deemed
unchanged.
In connection therewith, the Company hereby confirms and agrees that the
amount of each combined installment of principal and interest payable on the
Notes has been (and, following any change in interest rates in accordance
with the foregoing provisions, shall be) adjusted to reflect the foregoing
arrangements, but the portion of each such combined installment allocable to
principal shall remain unchanged, and that default in the payment of
interest, as calculated in accordance with the foregoing arrangements, shall
constitute an Event of Default under Section 6.1 of each of the Agreements.
The Company further agrees to execute, at the request of the Holders or any
of them, addenda to the Notes evidencing the foregoing arrangements.
CONSULTANT REVIEW. The Company acknowledges that the Purchasers intend
to retain a consultant (the "Consultant") to conduct an operational and
management review and to review the Company's budget for the Fiscal Year
ending March 31, 1999, as well as pro forma financial statements and
projections prepared by the Company for the Fiscal Year ending March 31 of
each 1999, 2000 and 2001 (the "Review"), such Review to be conducted solely
for the benefit and at the sole discretion of the Purchasers. The Purchasers
shall choose and retain such Consultant, subject to such Consultant being
reasonably acceptable to the Company (provided, however, that (i) unless the
Purchasers shall have received notice from the Company of its rejection of
such Consultant within five Business Days of the Company's receipt of notice
of the intention of the Purchasers to retain such Consultant, such Consultant
shall be deemed acceptable to the Company, and (ii) if the Company shall
reject the Consultant initially so chosen by the Purchasers, the Purchasers
shall have the right, in their sole discretion and without submitting such
choice to the Company for approval, to choose and retain another Consultant).
The Company shall pay any retainer required by such Consultant
contemporaneously with the retention of such Consultant. The Company shall
pay promptly, and in any event within 30 days of receipt of an invoice
therefor or upon demand, all reasonable costs and expenses, not to exceed
$50,000 in the aggregate, incurred or expended by the Purchasers with respect
to the retention of and the services provided by such Consultant (it being
understood and agreed, however, that such $50,000 limitation shall neither
apply to nor affect the Company's obligation to so pay additional costs and
expenses so incurred as a result of the Company's failure to cooperate with
such Consultant as contemplated by this provision, the Company's failure to
provide promptly any information reasonably requested by such Consultant, or
the failure of such Consultant to complete its inquiries in one visit to the
Company by the Consultant's representatives). The Company shall cooperate
with such Consultant in connection with the Review, and, without limiting the
generality of the foregoing, shall make its management available for
consultations with such Consultant and allow such Consultant free access to
the Company's books and records, in each case at any reasonable time during
regular business hours. The Purchasers shall make available to the Company
a report, to be prepared by the Consultant, of the results of the Review.
AMENDMENT FEE. The Company shall pay to the Purchasers an amendment fee
in the aggregate amount of $226,020.00 (the "Amendment Fee") payable in six
equal monthly installments of $37,670.00 each on the first day of each month
commencing August 1, 1998 through and including January 1, 1999. Each such
installment of such Amendment Fee shall be paid to the Purchasers pro rata in
accordance with the respective unpaid principal amounts of the Notes they
hold. Any default in the payment of any such installment of the Amendment
Fee shall constitute an Event of Default under Section 6.1 of each of the
Agreements.
EXPENSES. The Company hereby confirms its obligations under Section 9.6
of each of the Agreements to pay promptly, and in any event within 30 days of
receipt of an invoice therefor or upon demand, all out-of-pocket expenses of
the Holders in connection with this Waiver and Amendment and the matters
covered hereby (including, without limitation, the reasonable fees and
expenses of counsel to the Holders and travel expenses of representatives of
the Holders incurred in connection with the negotiation of this Waiver and
Amendment).
SURVIVAL OF OBLIGATIONS, ETC.. The obligations of the Company to make
the payments contemplated by the foregoing provisions shall survive payment
of the Notes and the termination of the Agreements. In addition to any
payment default specifically referred to in the foregoing provisions, any
default by the Company in the performance or observance or breach by the
Company of any of the foregoing provisions shall constitute an Event of
Default under Section 6.1 of each of the Agreements.
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Purchasers that (i) except as
disclosed herein, no Default or Event of Default has occurred and is
continuing, (ii) this Waiver and Amendment has been duly authorized, executed
and delivered by the Company and each of this Waiver and Amendment and each
Agreement, as amended by this Waiver and Amendment, constitutes a legal,
valid and binding obligation of the Company, and (iii) there is no provision
in the Articles of Incorporation of the Company or in its bylaws or in any
indenture, contract or agreement to which the Company is a party or by which
it is bound nor any provision of law or any order of any court or
governmental authority which prohibits the execution and delivery by the
Company of this Waiver and Amendment, the performance or observance by the
Company of the terms and conditions of this Waiver and Amendment, or the
performance or observance by the Company of the terms and conditions of the
Agreements, as modified by the amendments set forth in this Waiver and
Amendment. All representations and warranties contained herein or made in
writing by the Company in connection herewith shall survive the execution and
delivery hereof. It shall be deemed to be an Event of Default under each
Agreement if any of such representations or warranties proves to be false in
any material respect as of the date hereof.
MISCELLANEOUS
Except as specifically amended hereby, all terms and conditions of each
of the Agreements shall remain in full force and effect. This Waiver and
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be an original, but all of which constitute but one agreement.
This Waiver and Amendment shall be governed by and enforced in accordance
with Minnesota law.
If you are in agreement with the foregoing, please so indicate by
executing the form of acknowledgment set forth below, whereupon this Waiver
and Amendment shall become a binding agreement among you and the Company.
Very truly yours
THE ROTTLUND COMPANY, INC.
By
-----------------------------------------
Its
----------------------------------------
Agreed to as of the date first above written.
As to the 1994 Agreement and the 1996 Agreement:
PRINCIPAL LIFE INSURANCE COMPANY
By
--------------------------------
Its
-----------------------------
And
--------------------------------
Its
-----------------------------
As to the 1994 Agreement:
NORTHERN LIFE INSURANCE COMPANY
By
---------------------------------
Its
------------------------------
MODERN WOODMEN OF AMERICA
By
---------------------------------
Its
------------------------------
And
--------------------------------
Its
-----------------------------
ROYAL NEIGHBORS OF AMERICA
By
---------------------------------
Its
------------------------------
And
--------------------------------
Its
----------------------------
As to the 1996 Agreement:
RELIASTAR LIFE INSURANCE COMPANY
OF NEW YORK, successor by merger to
ReliaStar Bankers Life Insurance Company,
f/k/a Bankers Security Life Insurance Society
By
---------------------------------
Its
------------------------------
RELIASTAR UNITED SERVICES
LIFE INSURANCE COMPANY
By
--------------------------------
Its
------------------------------
ACKNOWLEDGMENT
Each of the undersigned, as a guarantor under the Guaranty (as defined
in each of the Agreements), hereby acknowledges all modifications, amendments
and waivers of provisions of the Agreements set forth in the foregoing Waiver
and Amendment, and confirms and agrees that such modifications, amendments
and waivers do not discharge, affect, reduce or impair its liability under
the Guaranty, including its liability thereunder for payment of the Notes and
the performance of all covenants contained in the Agreements.
Each of the undersigned represents that all such modifications, amendments
and waivers, together with the foregoing Waiver and Amendment, have been duly
executed by a duly authorized officer of the Company, and are valid
obligations of the Company legally binding upon the Company in accordance
with their respective terms.
NORTH COAST MORTGAGE, INC.
By:
-----------------------------------
Xxxxxxxx X. Xxxxxxx,
Chief Financial Officer
ROTTLUND HOMES OF FLORIDA, INC.
By:
-----------------------------------
Xxxxxxxx X. Xxxxxxx, Vice President
ROTTLUND HOMES OF INDIANA, INC.
By:
-----------------------------------
Xxxxxxxx X. Xxxxxxx, Vice President
ROTTLUND HOMES OF INDIANA
LIMITED PARTNERSHIP
By Rottlund Homes of Indiana, Inc.,
Its General Partner,
By:
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Xxxxxxxx X. Xxxxxxx, Vice President
ROTTLUND HOMES OF IOWA, INC.
By:
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Xxxxxxxx X. Xxxxxxx,
Chief Financial Officer
ROTTLAND HOMES OF NEW JERSEY, INC.
By:
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Xxxxxxxx X. Xxxxxxx,
Executive Vice President
SCHEDULE I
RATE ADJUSTMENT FINANCIAL TESTS
CONSOLIDATED TANGIBLE NET WORTH. Consolidated Tangible Net Worth in an
amount not less than $24,103,922 plus 70% of the positive Consolidated Net
Income, if any, for each Fiscal Quarter commencing on or after January 1,
1996.
LEVERAGE RATIO. Ratio of (i) the sum of Consolidated Current Debt and
Consolidated Funded Debt to (ii) Consolidated Tangible Assets in excess of
62% on and prior to December 31, 1998 and 57% thereafter.
FIXED CHARGES. Net Income Available for Fixed Charges for the
immediately preceding twelve-month period of at least 200% of Fixed Charges
for such twelve-month period.
EXHIBIT A
SCHEDULE IV TO 1994 AGREEMENT
(Amounts expressed are aggregate amounts with respect to all 1994 Notes
outstanding)
[SEE ATTACHED]
EXHIBIT B
SCHEDULE IV TO 1996 AGREEMENT
(Amounts expressed are aggregate amounts with respect to all 1996 Notes
outstanding)
[SEE ATTACHED]
EXHIBIT C
DESCRIPTIONS
OF
ARBOR POINTE REAL PROPERTY
[SEE ATTACHED]
