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                                 FIRST MODIFICATION
                                         OF
                                  CREDIT AGREEMENT
     
     
          This First Modification of Credit Agreement ("Agreement") is made this
     19th day of November, 1996, among THE ROTTLUND COMPANY, INC., a Minnesota
     corporation ("Borrower"), THE FIRST NATIONAL BANK OF BOSTON, a national
     banking association having its principal place of business at 100 Federal
     Street, Boston, Massachusetts 02110, ("FNBB") and THE FIRST NATIONAL BANK
     OF BOSTON, 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 is hereby
     acknowledged, the undersigned Borrower and FNBB hereby covenant and agree
     and follows:
     
          .    RECITALS.  The following Recitals are true and correct as of the
     date of this Agreement:
     
               ()   The Borrower, FNBB and the Agent entered into a Credit
     Agreement, dated as of October 23, 1996 ("Credit Agreement").
     
               ()   The parties to the Credit Agreement wish to amend and modify
     the Credit Agreement. 
     
               ()   All terms not otherwise defined herein shall have the same
     meaning as in the Credit Agreement.
     
          .    The Credit Agreement is hereby modified as follows:
     
               ()   The following definition shall be added to Section 1 of the
     Credit Agreement:
     
                    "ADDITIONAL REVOLVING CREDIT NOTE.  The Revolving Credit
                    Note in the amount of $4,000,000.00 dated November 19, 1996
                    made by the Borrower to the order of FNBB."
               ()   By adding the following at the end of the definition of
     Revolving Credit Note(s):  ",including the Additional Revolving Credit
     Note."
     
               (c)  By adding the following section to the Credit Agreement:
     
                         "Section 1.2   TEMPORARY NUMERICAL SUBSTITUTION.     
                  Beginning on November 19, 1996 and continuing until 
                  January 31, 1997, all references in the Credit Agreement to
                  $18,000,000.00 shall be deleted and replaced with 
                  $22,000,000.00.  From and after January 31, 1997, all such
                  references will revert to $18,000,000.00."
     
               (d)  The second sentence of Section 2.1 shall be deleted in its
     entirety.
     

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               (e)  The following shall be added at the end of Section 2.1 of
     the Credit Agreement:
     
                       "The portion of the Obligations evidenced by the 
                       Additional Revolving Credit Note including all accrued 
                       and unpaid interest thereon shall be due and payable, 
                       however, on January 31, 1997."
     
               (f)  By deleting the following clause from the first sentence of
     Section 2.3:  ", dated as of the Effective Date."
     
          3.   Except as modified hereby, the undersigned hereby ratify and
     reaffirm the terms and conditions of the Credit Agreement.
     
          4.   Borrower shall pay a fee in the amount of $20,000.00 to FNBB
     contemporaneous with the execution hereof. 
     
          5.   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 hereunto cause
     this instrument to be executed by its duly authorized corporate officers
     and its seal to be affixed hereto as of the day and year first above
     written.
     
                              THE ROTTLUND COMPANY, INC., a Minnesota
                              corporation
     
     
     
                              By:________________________________
                              Title:_____________________________
     
     
                                                    THE FIRST NATIONAL BANK
                                  OF BOSTON, a national banking association
     
     
     
                              By:________________________________
                                   KEVIN C. HAKE, Director