<PAGE>

                                WAIVER AND AMENDMENT

                                                 Dated as of December 31, 1997

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, 
and that certain Letter Amendment dated as of December 30, 1996,  and that 
certain Waiver and Amendment dated as of March 31, 1997, the "1994 
Agreement") among Principal Mutual 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 and that certain 
Waiver and Amendment dated as of March 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"). Capitalized terms 
used and not otherwise defined herein shall have the meanings ascribed 
thereto in each Agreement.

     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 has further advised the Purchasers 
that the Company is likely to continue to be so in default under Section 5.16 
of each of the Agreements in the near future.  The Company has accordingly 
requested certain waivers and amendments relating to Section 5.16 of each of 
the Agreements. 

     In consideration of the premises herein set forth and the satisfaction 
of the Condition hereinafter described, the Company and the Purchasers hereby 
agree, effective upon the satisfaction of the Condition,  as follows:

          1.   The Purchasers 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.

1

<PAGE>

          1  Section 5.7 (g)(v) of each of the Agreements is hereby amended 
          and restated in its entirety as follows:

          (v)  at no time shall the aggregate amount then remaining unpaid
          on Debt secured by such Liens and Liens permitted by Section
          5.7(e) exceed the lesser of (i) $8,000,000 or (ii) an amount
          equal to 11.5% of Consolidated Net Tangible Assets.

     3.   Section 5.16 of each of the Agreements is hereby amended and restated
     in its entirety as follows:

               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:

               100% as of the close of each month on and prior to
               March 31, 1998;
                    
               115% as of the close of each month on and prior to June
               30, 1998; 
                    
               140% as of the close of each month on or prior to
               September 30, 1998;
                    
               190% as of the close of each month on and prior to
               December 31, 1998;
                    
               200% as of the close of each month thereafter. 

     4.   Section 5 of each of the Agreements is hereby amended by adding the
     following new sections 5.19 and 5.20 thereto:


                                      -2-

<PAGE>

               A.     EXISTING BANK INDEBTEDNESS.  If the Company shall 
                    modify any term or condition of the Existing Bank
                    Indebtedness Documents, the Company agrees to give
                    written notice of such modification to all Holders
                    promptly, but in any event within five days of the
                    date on which such modification is effected.

               A.     GUARANTY FROM FUTURE SUBSIDIARIES.  In addition to
                    causing the existing Subsidiaries to execute and
                    deliver the Guaranty, the Company 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.
     
               1  Section 6.1 of each of the Agreements is hereby amended (a)
                    by changing the reference to "5.18" in the third line of
                    subsection 6.1(c) to "5.19", and (b) by changing the
                    parenthetical statement "(individually or in the aggregate")
                    in the sixth and seventh lines of subsection 6.1(e) to
                    "(individually or in the aggregate, and including without
                    limitation the Existing Bank Indebtedness)".

               1  Section 8.1 of each of the Agreements is hereby amended by
                    adding thereto the following new definitions:

               "Existing Bank Indebtedness" shall mean the portion of the Debt
               of the Company incurred under or pursuant to the Existing Credit
               Agreement.
               
               "Existing Bank Indebtedness Documents" shall mean the Existing
               Credit Agreement, together with all instruments and documents
               related thereto, given to secure or evidence the Existing Bank
               Indebtedness, or otherwise executed in connection therewith.
               
               "Existing Credit Agreement" shall mean that certain Credit
               Agreement dated as of October 23, 1996 among the Company, The
               First National Bank of Boston, as Agent, and the other parties
               thereto, as the same may from time to time be amended or
               otherwise modified.  Reference herein to the amendment or other
               modification of the Existing Credit Agreement is not intended to
               waive or modify in any respect the covenant of the Company
               contained in Section 5.19 regarding the modification of the
               Existing Bank Indebtedness Documents.
               
               "Guaranty" shall mean the Guaranty of the Subsidiaries, the form
               of which is appended as Exhibit A to that certain Waiver and
               Amendment dated as of December 31, 1997, by and among the 
               Company and the Purchasers.


3

<PAGE>

This Waiver and Amendment shall become effective only upon the execution and 
delivery by each of the Subsidiaries of a Guaranty (the "Guaranty"), 
substantially in the form of Exhibit A hereto (the "Condition").

     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.

     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 Agreement, as amended by this Waiver 
and Amendment, constitutes a legal, valid and binding obligation of the 
Company, and the Guaranty has been duly authorized, executed and delivered by 
each Subsidiary and constitutes a legal, valid and binding obligation of each 
Subsidiary, 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, and there is no provision in the Articles 
of Incorporation or bylaws or partnership agreement, as the case may be, of 
any Subsidiary or in any indenture, contract, or agreement to which any 
Subsidiary is a party or by which any Subsidiary is bound nor any provision 
of law or any order of any court or governmental authority which  prohibits  
the execution and delivery by any Subsidiary of the Guaranty or the 
performance or observance by any Subsidiary of the terms and conditions of 
the Guaranty.  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.

     If you are in agreement with the foregoing, please so indicate by 
executing the form of acknowledgment set forth below.   In accordance with 
Section 7.1 of each of the Agreements, this Waiver and Amendment shall become 
a binding agreement between you and the Company with respect to each 
Agreement, and the amendments set forth herein shall take effect as of the 
date hereof with respect to such Agreement, upon the execution of the form of 
acknowledgement set forth below by the holders of at least 66 2/3% in the 
aggregate principal amount of the outstanding Notes (as defined in such 
Agreement) issued pursuant to such Agreement (the percentage of the aggregate 
principal amount of the outstanding Notes held by each of you being set forth 
on Schedule I hereof).

<PAGE>

                         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 MUTUAL LIFE INSURANCE COMPANY


By                            
  -----------------------------------

Its                              
   ----------------------------------

And                                
   ----------------------------------

Its                                  
   ----------------------------------


AS TO THE 1994 AGREEMENT:

NORTHERN LIFE INSURANCE COMPANY


By                                 
  -----------------------------------

Its                              
   ----------------------------------

<PAGE>

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
Relia Star Bankers Life Insurance Company, 
f/k/a Bankers Security Life Insurance Society

By                                 
  -----------------------------------

Its                              
   ----------------------------------

RELIASTAR UNITED SERVICES 
LIFE INSURANCE COMPANY

By                                 
  -----------------------------------

Its                              
   ----------------------------------

<PAGE>

     SCHEDULE I

     1994 AGREEMENT

<TABLE>
<CAPTION>
                                            Percentage of Principal Amount
            Holder                                Of Outstanding Notes
            ------                                --------------------
 <S>                                                     <C>
 Principal Mutual Life Insurance                          64%
   Company

 Northern Life Insurance Company                          20%

 Modern Woodmen of America                                12%

 Royal Neighbors of America                                4%
                                                         ----
                                                         100%
</TABLE>

     1996 AGREEMENT

<TABLE>
<CAPTION>
                                            Percentagee of Principal Amount
            Holder                                Of Outstanding Notes
            ------                                --------------------
 <S>                                                     <C>
 Principal Mutual Life Insurance                          70%
   Company

 Siglar & Co., as nominee for                             10%
   Bankers Security Life
   Insurance Society (n/k/a
   ReliaStar Life Insurance
   Company of New York)

 Siglar & Co., as nominee for                             20%
                                                          ---
   United Services Life Insurance

<PAGE>

 Company (n/k/a ReliaStar
 United Services Life Insurance
 Company)
                                                         100%
</TABLE>

<PAGE>

                                                                   EXHIBIT A

                                  FORM OF GUARANTY
                                          
                                     [TO COME]