Document:

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                                                                   EXHIBIT 10.16

                         STANDSTILL AND VOTING AGREEMENT

         This STANDSTILL AGREEMENT (this "Agreement") is made as of March 6,
2000 by and among David C. Prosser, J. Alexander Fjelstad III, Thomas E.
Prosser, Pamela Prosser Snyder, Daniel F. Prosser, the David C. Prosser 1995
Unitrust, the David C. Prosser 1996 Unitrust, the David C. Prosser 1997
Unitrust, the David C. and Margaret F. Prosser Foundation, the Daniel F. Prosser
Irrevocable Trust, the Pamela Prosser Snyder Irrevocable Trust, and the Thomas
Prosser Irrevocable Trust (collectively, the "Prosser Group") and RTW, Inc., a
Minnesota corporation (the "Company").

         For good and valuable consideration, the receipt of which is hereby
acknowledged, each member of the Prosser Group and the Company agree as follows:

         1. CERTAIN DEFINITIONS. Unless the context otherwise requires, the
following terms, for all purposes of this Agreement, shall have the meanings
specified in this Section 1:

         "Affiliate" of any Person shall mean any Person that directly or
indirectly, through one or more intermediaries, controls or is controlled by or
is under common control with, such Person. For purposes of this Agreement, if
any member of the Prosser Group is part of a group with respect to holding or
voting RTW common stock and such group has or is obligated to report the
existence of such group under the Securities Exchange Act of 1934 on Schedule
13D, all other Persons who are members of such group shall be deemed an
Affiliate of the Prosser Group.

         "Outstanding Voting Stock" shall mean the common stock of the Company
and any other securities convertible into Common Stock of the Company having the
power to vote in the election of directors of the Company then outstanding or
the power to vote on any other matters that properly come before the
shareholders of the Company.

         "Person" shall mean any individual, partnership, joint venture,
corporation, trust or unincorporated organization, a group required to report
its existence on Schedule 13D under the Securities Exchange Act of 1934 due to
its ownership of 5% or more of Company Voting Stock, or any business entity or
governmental authority, in any case whether acting in an individual, fiduciary
or other capacity.

         "Voting Power" shall mean the number of votes entitled to then be cast
by the holder of all of the Outstanding Voting Stock of the Company upon any
proposed action or election of directors of the Company.

         "Voting Stock" shall mean the common stock of the Company outstanding,
assuming the exercise or conversion of all outstanding securities convertible
into or exercisable or exchangeable for common stock of the Company and further
assuming the issuance of all shares of common stock of the Company reserved for
issuance pursuant to stock options whether or not yet granted, and any other
securities issued by the Company having the power to vote in the

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election of directors or upon any other proposed action of the Company. When
this Agreement refers to Voting Stock held or voted by one or more members of
the Prosser Group such reference includes the shares of Voting Stock listed
under Column B of Schedule 1 hereto.

         2.       COVENANTS OF THE PROSSER GROUP.

         2.1. Standstill Provisions. For a period of two years following the
date of this Agreement, each member of the Prosser Group shall not (and shall
not permit any Affiliate to), directly or indirectly:

                  (a) acquire from other holders of Voting Stock or other
         securities convertible into or exchangeable or exercisable for Voting
         Stock, beneficial ownership of any Voting Stock, any securities
         convertible into or exchangeable for Voting Stock, or any other right
         to acquire Voting Stock (except, in any case, by way of stock
         dividends, stock splits or other distributions made to holders of any
         Voting Stock generally), or authorize or make a tender, exchange or
         other offer which would result in such an acquisition, without the
         prior written consent of the Company pursuant to approval by the Board
         of Directors of the Company;

                  (b) deposit any shares of Voting Stock in a voting trust or
         subject any Voting Stock to any arrangement or agreement with respect
         to the voting of such Voting Stock if to do so would or could cause a
         violation of any term of this Agreement;

                  (c) initiate, propose or solicit any change in the composition
         of the Board of Directors or the number or terms of the directors
         thereof or, except as required by law, make public statements with
         respect thereto;

                  (d) initiate, propose or solicit any material change in the
         business or corporate structure of the Company or to the Articles of
         Incorporation or bylaws of the Company, or, except as required by law,
         make public statements with respect thereto;

                  (e) solicit, or induce others to solicit, any "proxies" to
         vote with respect to any securities issued by the Company or any of its
         Affiliates, or become a "participant" or induce others to become a
         "participant" in any solicitation of "proxies" to vote (as such terms
         are used in Regulation 14A under the Securities Exchange Act of 1934)
         securities issued by the Company or seek to advise or influence any
         Person with respect to the voting of securities issued by Company;

                  (f) initiate, propose or solicit the acquisition, by purchase
         or otherwise, from the Company or any other Person of securities issued
         by the Company or assets of the Company or initiate, propose or solicit
         any other form of restructuring, recapitalization, reorganization,
         liquidation or similar transaction of the Company; or

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                  (g) otherwise act in any manner, whether by forming, joining
         or participating with any Person or group, or aiding, advising,
         encouraging, soliciting or assisting any other Person or group, whether
         for the purpose of acquiring, holding, voting or disposing of Voting
         Stock or accomplishing any of the foregoing (a) through (f) above,
         including inviting, encouraging, soliciting or providing information to
         assist the submission of any proposal for any of the foregoing.

         2.2      Transferees. For a period of two years following the date of
this Agreement, the Prosser Group shall not sell, assign or transfer 5% or more
of the Outstanding Voting Stock to any Person (or any Affiliate of such Person)
in a transaction or a series of related transactions without such Person
purchasing such securities having agreed to and having become a party to this
Agreement with the Company.

         3. VOTING OF STOCK. For a period of two years following the date of
this Agreement, all members of the Prosser Group (a) will vote all Voting Stock
they beneficially own "FOR" all proposals submitted by management or the Board
of Directors of the Company for approval or a vote by the shareholders of the
Company, including all nominations for the Board of Directors of the Company; or
(b) will vote all Voting Stock they beneficially own in the same proportion as
other shareholders of the Company on any matter brought to a vote of the
shareholders of the Company; or (c) will grant and deliver to the Chair of the
Special Committee or his designee or successor any and all conditional proxies
necessary to give effect to the obligations of the Prosser Group set forth in
this Section 3.

         4. PROHIBITED TRANSFER. Any purchase which causes the Prosser Group to
be in violation of the terms of Section 2.2 above (a "Prohibited Transfer")
shall not be effected by the Company and shall be voidable at the option of the
Company by its giving written notice to the transferee and the Prosser Group.

         5. LEGEND ON SHARE CERTIFICATES; SHARES NOT REQUIRING LEGEND.

         5.1 Concurrent with the effective date of this Agreement, each member
of the Prosser Group shall be issued 90% of the number of shares of Voting Stock
opposite such member's name under Column B of Schedule 1 hereto on certificates
bearing the legend set forth in paragraph 5.2 below. At the effective date of
this Agreement the remaining ten percent of the Voting Stock of each Prosser
Group member shall not be subject to the requirements of paragraph 5.2 and may
be issued either in certificated or uncertificated form, at the direction of the
respective Prosser Group members; such shares of Voting Stock shall be deemed
"Non-Legended Shares" as hereafter defined.

         5.2 Unless otherwise expressly permitted in this Section 5, each
certificate representing shares of Voting Stock held by a member of the Prosser
Group, including shares referred to on Schedule 1, hereto shall be endorsed by
the Company with a legend reading as follows:

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         "THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A STANDSTILL AND VOTING
         AGREEMENT BY AND BETWEEN THE COMPANY AND THE HOLDER HEREOF (A COPY OF
         WHICH MAY BE OBTAINED FROM THE COMPANY), AND NO TRANSFER OF THE SHARES
         EVIDENCED HEREBY SHALL BE EFFECTIVE EXCEPT IN COMPLIANCE WITH THE TERMS
         THEREOF."

Certificates bearing the foregoing legend are herein referred to as "Legended
Shares." At any time after two years from the date of this Agreement the
foregoing legend shall, upon request by the holder, promptly be removed by the
Company (or by the transfer agent at the direction of the Company) from all
Legended Shares unless a material breach of this Agreement by such holder
occurred prior to the expiration of such two-year period.

         5.3 Notwithstanding the provisions of paragraph 5.2, each member of the
Prosser Group may hold in certificated form or in "street name" up to that
number of shares of Voting Stock opposite the respective Prosser Group member's
name presented in Column C of Schedule 1 hereto without such shares bearing the
restrictive legend set forth in paragraph 5.2 ("Non-Legended Shares"). The
number of shares of Voting Stock opposite each Prosser Group member's name
presented in Column C of Schedule 1 hereto shall for purposes of this paragraph
5.3 be the "Maximum Non-Legended Shares" for such person. After the date hereof,
if any Prosser Group member shall sell, transfer or otherwise convey some or all
the Non-Legended Shares beneficially owned by such person, at the request of
such person the Company shall direct its transfer agent to reissue Legended
Shares as Non-Legended Shares if such person and any broker dealer facilitating
such transaction shall provide evidence reasonably satisfactory to the Company
that (a) the Non-Legended Shares sold, transferred or otherwise conveyed by such
person were sold, transferred or conveyed in a transaction or transactions not
prohibited by this Agreement and (b) after reissuing the proposed number of
Legended Shares as Non-Legended Shares the total number of Non-Legended Shares
shall not exceed the Maximum Non-Legended Shares applicable to such person.

         5.4 At any time after the date hereof, if any Prosser Group member
shall propose to sell, transfer or otherwise convey some or all the Legended
Shares beneficially owned by such person (each a "Proposed Transfer"), at the
request of such person the Company shall instruct its transfer agent to transfer
such Legended Shares to the transferee in the Proposed Transaction if within a
reasonable period of time prior to the date of the Proposed Transfer such
Prosser Group member and any broker dealer facilitating such transaction shall
provide evidence reasonably satisfactory to the Company that the Proposed
Transfer is not prohibited by this Agreement.

         5.5 Except as expressly provided in this Section 5, all shares of
Voting Stock which are Non-Legended Shares shall be subject to all terms and
conditions of this Agreement. Further, notwithstanding that Non-Legended Shares
may be held in "street name," each Prosser Group member holding such
Non-Legended Shares shall cooperate with management of the Company and direct
the broker dealer holding such shares in street name to cooperate with Company
management to assure that such Prosser Group member is complying with the
provisions of

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Section 3 of this Agreement.

         6. COMMUNICATIONS WITH THE COMPANY. Each member of the Prosser Group
agrees to conduct all communications with regard to the business of the Company
only with the Chief Executive Officer of the Company and will discontinue all
communications with any other member of the management of the Company or any
other employee of the Company as such communications relate to the business of
the Company.

         7. COOPERATION. The Company shall cooperate with each member of the
Prosser Group to develop arrangements whereby shares subject to the provisions
of this Agreement may be deposited with a broker, dealer or other financial
institution to enable the Prosser Group members to sell and margin their shares
in a manner which does not violate the provisions of this Agreement. Further,
the Company shall cooperate with the Prosser Group members to promptly release
shares from the provisions of this Agreement if such shares are sold in bona
fide transactions not violating any provisions of this Agreement.

         8.  MISCELLANEOUS.

         8.1. Governing Law; Jurisdiction. This Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
Minnesota, and shall be binding upon the parties hereto. The federal and state
courts within County of Hennepin in the State of Minnesota shall have exclusive
jurisdiction to adjudicate any dispute arising out of this Agreement.

         8.2. Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successor and assigns of the parties hereto.

         8.3. Entire Agreement. This Agreement, together with the Escrow
Agreement and that certain Letter Agreement dated February 2, 2000, constitute
the full and entire understanding and agreement among the parties with regard to
the subject matter hereof and thereof. Neither this Agreement nor any provision
hereof may be amended, changed, waived, discharged or terminated other than by a
written instrument signed by the party against whom enforcement of any such
amendment, change, waiver, discharge or termination is sought.

         8.4. Specific Enforcement. Each member of the Prosser Group
acknowledges and agrees that the breach of this Agreement would cause
irreparable damage to the Company and that the Company may not have an adequate
remedy at law. Accordingly, in the event of a breach of this Agreement by any
one or more members of the Prosser Group, the Company, in addition and
supplementary to any other rights and remedies existing in its favor, may apply
to any court of law or equity of competent jurisdiction for specific performance
and/or injunctive or other relief in order to enforce or prevent any violation
of the provisions hereof. Such remedies shall, however, be cumulative and not
exclusive and shall be in addition to any other remedies which

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the Company may have under this Agreement.

         8.5. Notices, etc. All notices and other communications required or
permitted hereunder shall be effective upon receipt and shall be in writing and
may be delivered in person, by telecopy, electronic mail, express delivery
service or U.S. mail, in which event it may be mailed by first-class, certified
or registered, postage prepaid, addressed, to the party to be notified, at the
respective addresses set forth below, or at such other address which may
hereinafter be designated in writing:

            (a)   If to the Prosser Group, to:

                 David C. Prosser
                 21510 Fairview Street
                 Excelsior, MN 55331

            (b)   If to the Company, to:

                 RTW, Inc.
                 8500 Normandale Blvd. Suite 1400
                 Bloomington, MN 55437

         8.6. Binding Obligation. This Agreement shall be a binding obligation
on each Prosser Group member signing this Agreement notwithstanding that one or
more other Prosser Group members have not signed this Agreement.

         8.7. Severability. If any provision of this Agreement shall be
judicially determined to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

         8.8. Titles and Subtitles. The titles of the sections of this Agreement
are for convenience of reference only and in no way define, limit, extend or
describe the scope of this Agreement or the intent of any of its provisions.

         8.9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

         8.10. Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party upon any breach or
default of any other party under this Agreement shall impair any such right,
power or remedy, nor shall it be construed to be a waiver of any such breach or
default, or any acquiescence therein, or of any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of
any kind or character of any breach or default under this

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Agreement, or any waiver of any provisions or conditions of this Agreement must
be in writing and shall be effective only to the extent specifically set forth
in writing, and that all remedies, either under this Agreement, by law or
otherwise, shall be cumulative and not alternative.

         8.11. Payment of Fees and Expenses. Each party shall be responsible for
paying its own fees, costs and expenses in connection with this Agreement and
the transactions herein contemplated.

         8.12. Section References. Unless otherwise stated, any reference
contained herein to a Section or subsection refers to the provisions of this
Agreement.

         8.13 Representation of Signatories. Each of the undersigned signatories
of entities which are parties hereto hereby agree that they are authorized to
sign for and bind such entity under this Agreement.

             The remainder of this page is intentionally left blank.

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         IN WITNESS WHEREOF, the parties have caused this Standstill and Voting
Agreement to be duly executed and delivered as of the day and year first written
above.

RTW, INC.

By: /s/ Jeffrey B. Murphy
    ----------------------------
Its:    Chief Financial Officer
    ----------------------------
/s/ David C. Prosser                    /s/ David C. Prosser
--------------------------------        --------------------------------
David C. Prosser                                          , on behalf of the
                                        ------------------
/s/ J. Alexander Fjelstad III           David C. and Margaret F. Prosser
--------------------------------        Foundation
J. Alexander Fjelstad III
                                        /s/ Daniel F. Prosser
                                        --------------------------------
                                                          , on behalf of the
                                        ------------------
/s/ Thomas C. Prosser                   Daniel F. Prosser Irrevocable Trust
--------------------------------
Thomas C. Prosser                       /s/ Pamela Prosser Snyder
                                        --------------------------------
/s/ Pamela Prosser Snyder                                 , on behalf of the
--------------------------------        ------------------
Pamela Prosser Snyder                   Pamela Prosser Snyder Irrevocable Trust

/s/ Daniel F. Prosser                   /s/ Thomas C. Prosser
-------------------------------         --------------------------------
Daniel F. Prosser                                          , on behalf of the
                                        ------------------
                                        Thomas Prosser Irrevocable Trust
/s/ David C. Prosser
--------------------------------

                  , on behalf of the
------------------
Daniel C. Prosser 1995 Unitrust

/s/ David C. Prosser
-------------------------------

                   , on behalf of the
-------------------
David C. Prosser 1996 Unitrust

/s/ David C. Prosser
-------------------------------
                   , on behalf of the
-------------------
David C. Prosser 1997 Unitrust

                                       8<PAGE>   1
                                                                   EXHIBIT 10.17

[US BANK LOGO]

March 3, 2000

Mr. Jeffrey B. Murphy
Chief Financial Officer
RTW, Inc.
8500 Normandale Lake Boulevard
P.O. Box 39327
Minneapolis, MN 55439

Dear Jeff:

I am pleased to advise you that U.S. Bank National Association ("U.S. Bank")
has approved your request for an $8,000,000 term loan and $2,000,000 revolving
credit facility in favor of RTW, Inc. U.S. Bank's proposal is described in
general terms in the attached Term Sheet.

We are delighted to have this opportunity to serve your needs.  This commitment
is subject only to the execution and delivery of documentation in form and
substance satisfactory to both parties.  This commitment will expire if the
transaction does not close by March 31, 2000.

Please do not hesitate to call me at (612) 973-0554 if you have any questions or
comments regarding this letter or the above terms.  I look forward to hearing
from you.

Very truly yours,

U.S. BANK NATIONAL ASSOCIATION

/s/ Jason S. Tornow
------------------------------
Jason S. Tornow
Corporate Banking Officer
Financial Services Division

                                    Accepted and agreed to
                                    This 8th day of March, 2000
                                    RTW, Inc.

                                    /s/ Jeffrey B. Murphy
                                    ---------------------------
                                    Mr. Jeffrey B. Murphy
                                    Chief Financial Officer

cc:   Jose Peris
<PAGE>   2

                                    RTW, INC.
                  TERM SHEET FOR REVOLVING CREDIT AND TERM LOAN
                        BY U.S. BANK NATIONAL ASSOCIATION
                                  MARCH 3, 2000

TERMS SPECIFIC TO TERM LOAN

BORROWER:                           RTW, Inc. ("RTW" or the "Borrower")

LENDER:                             U.S. Bank National Association ("U.S.
                                    Bank").

FACILITY                            AMOUNT: $8,000,000 (Eight Million and No/100
                                    dollars).

PURPOSE:                            Buy-back of Mr. Prosser's family shares.
                                    Refinance the $6.0 million U.S. Bank
                                    bridge loan.

MATURITY:                           Five years from closing.

AMORTIZATION:                       The outstanding balance will amortize
                                    starting December 31, 2000 with payments
                                    described in the table below, and every year
                                    thereafter on December 31 with the balance
                                    of the loan due at maturity:

                                   -----------------------------------------
                                                   Principal      Maximum
                                     Due Date       Payment       Balance
                                   -----------------------------------------

                                        12/31/00      1,000,000   7,000,000

                                        12/31/01      1,500,000   5,500,000

                                        12/31/02      1,500,000   4,000,000

                                        12/31/03      2,000,000   2,000,000

                                        12/31/04      2,000,000           -

                                   -----------------------------------------

PREPAYMENTS:                        Principal prepayments will be applied to the
                                    next principal payment due. Prepayments of
                                    fixed rate notes prior to the maturity of
                                    the rate set may be subject to prepayments
                                    breakage fees. Prepayment of floating rate
                                    notes will not be subject to breakage fees.

TERMS SPECIFIC TO THE REVOLVING CREDIT FACILITY

BORROWER:                           RTW, Inc. ("RTW" or the "Borrower")

LENDER:                             U.S. Bank National Association ("U.S.
                                    Bank").

FACILITY AMOUNT:                    $2,000,000 (Two Million and No/100 dollars).

                                  Page 1 of 6
<PAGE>   3
RTW, Inc.-Term Sheet for Term Loan and Revolving Credit
March 3, 2000

PURPOSE:                            General corporate purposes.

MATURITY:                           364 days from closing.

AMORTIZATION:                       Not applicable. Interest payments are due
                                    quarterly.

EXTENSION REQUEST:                  The Borrower has the right to request an
                                    extension in the revolving credit
                                    termination date for an additional 364 days,
                                    with such request being given not more than
                                    60 days prior to the revolving credit
                                    facility termination date. U.S. Bank may at
                                    its sole discretion, but is not obligated
                                    to, agree to such request within 30 days of
                                    such request.

UNUSED FEE:                         30 basis points calculated on unused
                                    facility amount during the revolving period
                                    payable quarterly in arrears.

GENERAL TERMS TO BOTH TERM LOAN AND REVOLVING CREDIT

UPFRONT FEE:                        $100,000 ($50,000 credit given for the
                                    upfront fee paid on the $6.0 million U.S.
                                    Bank bridge loan closed on February 4, 2000.
                                    Remaining $50,000 due when commitment is
                                    accepted).

PRICING:                            At the option of the Borrower and subject to
                                    the terms and conditions of the Loan
                                    Documentation, one or more of the following:

                                    1.    One fixed rate option for 1, 2, 3 and
                                          6-month reserve adjusted LIBOR plus
                                          Applicable Spread. As of March 3,
                                          2000, the 1, 2, 3 and 6-month reserve
                                          adjusted LIBOR rate plus 240 basis
                                          points would have been 8.34%, 8.42%,
                                          8.52%, and 8.74% respectively.

                                    2.    Fixed rate option for 1, 2, or 3-year
                                          periods plus Applicable Spread. As of
                                          March 3, 2000, the 1, 2, and 3-year
                                          U.S. Bank Fixed Rate plus 240 basis
                                          points would have been 8.94%, 9.08%,
                                          and 9.27%.

                                    3.    The variable rate on the borrowings
                                          will be U.S. Bank's Reference Rate. As
                                          of March 3, 2000, U.S. Bank's
                                          Reference Rate was 8.75%.

APPLICABLE SPREAD:                  For the period up to and including February
                                    28, 2001, the applicable spread shall be 240
                                    basis points for the fixed rate options.
                                    Thereafter, the applicable spreads are
                                    presented in the following table and are
                                    based on Borrower's Fixed Charge

                                  Page 2 of 6

<PAGE>   4
RTW, Inc.-Term Sheet for Term Loan and Revolving Credit
March 3, 2000

                                    Coverage Ratio (as defined below)
                                    calculated based on FY2000 financial
                                    results and going from:

<TABLE>
<CAPTION>

                                        ------------------------- -----------------------
                                         Fixed Charge Coverage         Fixed Rate
                                                 Ratio              Applicable Spread
                                        ------------------------- -----------------------

<S>                                                             <C>
                                                < 2.00             275 basis points
                                                -

                                          >2.00, but < 3.00        240 basis points
                                                     -

                                                 > 3.0             190 basis points

                                        ------------------------- -----------------------
</TABLE>

                                    Fixed Charge Coverage Ratio is defined as
                                    (a) the sum of: (i) Dividend capacity of
                                    ACIC calculated on rolling four quarter
                                    basis; plus (ii) Operating gain (loss) of
                                    RTW, on an unconsolidated basis for the last
                                    four quarters, plus (iii) tax benefit of
                                    interest expense

                                    Divided by

                                    (b) The sum of: (i) interest expense of
                                    holding company debt calculated on a rolling
                                    four quarter basis, plus (ii) 1/5th of all
                                    indebtedness.

PREPAYMENTS:                        Prepayments of fixed rate loans will be
                                    subject to breakage payments. Reference rate
                                    loans may be prepaid at any time on one
                                    business day's notice.

COLLATERAL:                         First priority perfected lien on all common
                                    stock of ACIC. Negative pledge on all other
                                    assets of the Borrower.

COVENANTS:                          The loan documents shall contain
                                    affirmative, negative, and financial
                                    covenants that are standard and customary
                                    for transactions of this type, including,
                                    but not limited to, the following:

                                    1.    Minimum Fixed Charge Coverage Ratio of
                                          RTW: Not permit, at any time, to be
                                          less than 1.75 to 1.00.

                                    2.    Maximum Debt of RTW: Not permit, at
                                          any time, RTW on a consolidated basis
                                          limited to $20,000,000, including
                                          letter of credit and guarantees.

                                    3.    Minimum Consolidated Net Worth of RTW:
                                          Not permit, at any time, the
                                          Consolidated Net Worth, as defined by
                                          GAAP, of Borrower to be less than $45
                                          million, excluding effects of

                                  Page 3 of 6

<PAGE>   5
RTW, Inc.-Term Sheet for Term Loan and Revolving Credit
March 3, 2000

                                    FASB 115, plus 25% of cumulative positive
                                    consolidated net income after December 31,
                                    1999.

                                 4. Minimum Statutory Surplus of ACIC: Not
                                    permit, at any time, Capital and Surplus
                                    plus IMR and AVR of ACIC to be less than
                                    $40.0 million plus 25% of cumulative
                                    positive statutory income after December 31,
                                    1999.

                                 5. Minimum Rolling Four-Quarter Consolidated
                                    Net Earnings of RTW: Not permit, at any
                                    time, the consolidated net earnings of the
                                    Borrower, calculated on a rolling
                                    four-quarter basis, to be less than $4.0
                                    million.

                                 6. Minimum Risk-Based Capital of ACIC: Not
                                    permit, at any time, the Adjusted Capital to
                                    Authorized Control Level Risk-Based Capital
                                    Ratio of ACIC to be less than 400%, whereas
                                    Adjusted Capital is defined as (i) capital,
                                    plus (ii) surplus, plus (iii) IMR, plus (iv)
                                    AVR.

                                 7. Minimum A.M. Best Rating of ACIC:
                                    Maintenance of A.M. Best rating of B+ or
                                    better by ACIC at all times.

                                 8. Minimum Investment-grade Investment Ratio
                                    of ACIC: ACIC's ratio of investment grade
                                    assets to total investments calculated at
                                    the lower of cost or current market value
                                    shall equal or exceed 95% at all times.

                                 9. Maintenance of property; insurance
                                    coverage. Conduct of business; maintenance
                                    of existence. Compliance with laws,
                                    including ERISA.

                                10. The following payments will be
                                    restricted: dividends, purchases,
                                    redemptions or retirements of stock, and any
                                    other payments in respect of stock. However,
                                    stock purchased from employees in accordance
                                    with incentive plans is permitting up to an
                                    aggregate of $250,000.

 REPRESENTATIONS AND
   WARRANTIES:                  Customary for credit facilities of this nature,
                                with respect to the Borrower and its
                                Subsidiaries, including but not limited to, the
                                following:

                                1.    Corporate existence and power.

                                2.    Corporate and governmental
                                      authorization; no contravention;
                                      binding effect.

                                3.    Financial information.

                                  Page 4 of 6
<PAGE>   6
RTW, Inc.-Term Sheet for Term Loan and Revolving Credit
March 3, 2000

                                    4.    No material adverse change except as
                                          disclosed in writing.

                                    5.    Compliance with laws, including ERISA.

                                    6.    No material litigation.

                                    7.    Payment of taxes.

CONDITIONS TO BORROWING:            Customary in credit facilities
                                    of this nature, including but not limited
                                    to, the following:

                                    1.    Receipt of 1999 Audited Financial
                                          Statements.

                                    2.    Absence of default.

                                    3.    Accuracy of representations and
                                          warranties.

                                    4.    Negotiation and execution of
                                          satisfactory closing documentation.

INFORMATION
  REQUIREMENTS:                     Customary in credit agreements of this
                                    nature, including but not limited to, the
                                    following:

                                    1.   Annual consolidated audited financial
                                         statements of the Borrower. Annual
                                         consolidating financial statements of
                                         the Borrower.

                                    2.   Quarterly consolidated and
                                         consolidating unaudited financial
                                         statements of the Borrower.

                                    3.   Quarterly and annual statutory
                                         financial statements of ACIC.

                                    4.   Quarterly compliance reports.

                                    5.   Annual Milliman & Robertson, Inc.
                                         actuarial analysis of the loss and loss
                                         adjustment expense reserves of ACIC.

                                    6.   Additional information as may be
                                         reasonably requested.

EVENTS OF DEFAULT:                  Customary in credit agreements of this
                                    nature, including the following:

                                    1.   Failure to pay any principal when due,
                                         or any interest or fees payable under
                                         the Credit Agreement within seven days
                                         of when due.

                                    2.   Failure to comply with covenants.

                                    3.   Representations or warranties false in
                                         any material respect when made.

                                  Page 5 of 6

<PAGE>   7
RTW, Inc.-Term Sheet for Term Loan and Revolving Credit
March 3, 2000

                                    4.    Cross default to other debt in excess
                                          of $1,000,000 (One Million and No/100
                                          Dollars) individually or in the
                                          aggregate of the Borrower and its
                                          subsidiary.

                                    5.    Change of ownership or control.

                                    6.    Other usual defaults with
                                          respect to the Borrower and
                                          subsidiary, including insolvency,
                                          bankruptcy, regulatory takeover,
                                          ERISA, and judgment defaults in excess
                                          of $500,000.

EXPENSES:                           Borrower will pay reasonable legal and other
                                    out-of-pocket expenses of U.S. Bank related
                                    to the documentation of this transaction,
                                    including the reasonable fees and expenses
                                    of special counsel to U.S. Bank.

OTHER CONDITIONS:                   Including but not limited to the execution
                                    and delivery of documentation, in form and
                                    substance satisfactory to all parties.

EXPIRATION DATE:                    If this transaction is not documented
                                    and closed by March 31, 2000, any commitment
                                    if made will automatically expire.

GOVERNING LAW:                      Minnesota.

--------------------------------------------------------------------------------
             This term sheet is issued for discussion purposes. Substantial
             negotiation must still occur and neither party to the financing
             shall be legally bound until all the appropriate parties have
             signed the final documents.
--------------------------------------------------------------------------------

                                  Page 6 of 6

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