Document:

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                                                                   EXHIBIT 10.1

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

         THIS AGREEMENT, dated as of May 8, 2000, by and between U.S. Bancorp, a
Delaware corporation (as further defined in Section 8.13.12 hereof, "Employer"),
and John F. Grundhofer ("Executive"), amends and restates the Employment
Agreement dated as of August 1, 1997 by and between Employer and Executive (as
amended by the First Amendment to Employment Agreement dated as of June 11, 1998
by and between Employer and Executive, the "Original Agreement").

         In consideration of the respective undertakings of Employer and
Executive set forth below, Employer and Executive agree as follows:

         1. Employment. Employer hereby employs Executive, and Executive accepts
such employment and agrees to perform services for the Employer,  for the period
and upon the other terms and conditions set forth in this Agreement.

         2. Term of Employment. The term of Executive's employment pursuant to
this Agreement will commence on August 1, 1997 (the "Commencement Date") and,
unless terminated at an earlier date in accordance with Section 5 of this
Agreement, shall continue in effect until the fifth anniversary of the
Commencement Date; and, commencing on the first anniversary of the Commencement
Date and on each anniversary thereafter, the term of this Agreement shall
automatically be extended for one additional year unless, not later than 30 days
prior to any such date of automatic extension of this Agreement, Employer or
Executive shall have given the other party to this Agreement written notice that
the Agreement will not be so extended. The term of Executive's employment
commencing on the Commencement Date and ending pursuant to the terms hereof is
hereinafter referred to as the "Period of Employment."

         3. Position and Duties.

            3.01 Service with Employer. During the Period of Employment,
Executive agrees to perform such reasonable executive employment duties as
Employer shall assign to him from time to time and shall have the title of
President and Chief Executive Officer and upon the earlier of (x) the retirement
of Gerry B. Cameron and (y) January 1, 1999, the Executive shall have the
additional title of Chairman of the Board of Directors of the Employer;
provided, however, that (a) Employer may name another executive President during
the Period of Employment so long as Executive retains the other titles as herein
provided and (b) following a Partial Change in Control, Employer may name one or
more other executives Chairman of the Board of Directors, President and/or Chief
Executive Officer. Executive also agrees to serve, for any period for which he
is elected, as a director on the Board of Directors of Employer and to serve as
a member of any committee of the Board of Directors of Employer to which
Executive may be elected or appointed.

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                  3.02 Performance of Duties. Executive agrees to serve Employer
faithfully and to the best of his ability and to devote his full business time,
attention and efforts to the business and affairs of Employer during the Period
of Employment; provided, however, that Executive may engage in other activities,
such as activities involving charitable, educational, religious and similar
types of organizations, speaking engagements, membership on the boards of
directors of other organizations (as Employer may from time to time approve),
management of Executive's personal investments, and similar types of activities
to the extent that such other activities do not inhibit in any material way or
prohibit the performance of Executive's duties under this Agreement, or inhibit
in any material way or conflict with the business of Employer and its
subsidiaries.

         4.       Compensation.

                  4.01 Base Salary. As base compensation for all services to be
rendered by Executive under this Agreement, Employer will pay to Executive
during the Period of Employment a base annual salary ("Annual Salary") to be
paid in substantially equal installments in accordance with Employer's standard
payroll procedures and policies. The Annual Salary will be at least $840,000,
but the Annual Salary may be increased (but not reduced) from time to time in
the sole discretion of Employer; provided, however, that for any of the three
years beginning after a Change in Control (as hereinafter defined) during the
Period of Employment, Executive's Annual Salary shall be increased by a
percentage not less than the average percentage increase in the base annual
salary for each of the next five highest paid officers of Employer for such
year.

                  4.02 Annual Bonus. During the Period of Employment, Executive
will be entitled to participate in the Employer's Executive Incentive Plan (or,
if such Plan shall cease to exist, Employer's annual bonus award program, if
any, for Employer's executives at Executive's grade level) with a target bonus
opportunity at least as great as that provided to the Executive immediately
prior to the Commencement Date. The award of an annual bonus is highly
discretionary and is subject to the terms and provisions of the Executive
Incentive Plan (or, if such Plan shall cease to exist, Employer's annual bonus
award program, if any, for Employer's executives at Executive's grade level).

                  4.03 Options and Restricted Stock. During the Period of
Employment, Executive will be eligible to receive grants of Employer's stock
options and restricted stock, or other awards pursuant to equity-based plans of
Employer. Such grants are highly discretionary and would be subject to the terms
of the applicable agreements prescribed by Employer from time to time.

                  Notwithstanding the foregoing, the Executive shall be granted
on the date of the Original Agreement 50,000 shares of restricted common stock
of the Employer (the "Restricted Stock"). The Restricted Stock shall vest in
five equal installments on each of the first through fifth anniversaries of the
date of grant but shall vest immediately upon the Executive's death or
Disability (as defined in the Employer's Disability Program) or upon a
termination of the Executive's employment by the Employer without Cause or by
the

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Executive for Good Reason, or upon a Full Change in Control (as each of such
terms is defined in the next paragraph of this Section 4.03). The Executive
shall be granted as of the date of the Original Agreement an option (the
"Option") to acquire 150,000 shares of the Employer's common stock at their Fair
Market Value on the date of grant (as defined in the Employer's 1997 Stock
Incentive Plan). The Option shall have a term of 10 years and shall vest and
become exercisable in full on the fifth anniversary of the date of grant,
subject to acceleration in the event of achievement of performance targets set
forth in the grant of the Option, and shall be subject to all other terms and
conditions currently applicable to options granted under such Plan to other
executive officers of the Employer. The option shall vest and become immediately
exercisable upon the Executive's death or Disability (as defined in the
Employer's Disability Program) or upon a termination of the Executive's
employment by the Employer without Cause or by the Executive for Good Reason, or
upon a Full Change in Control (as each of such terms is defined in the next
paragraph of this Section 4.03).

                  For purposes of this Section 4.03, the terms "Cause," "Good
Reason" and "Full Change in Control" shall have the meanings contained in the
Original Agreement without regard to amendments thereto made hereby. For
purposes of the agreements between the Executive and the Employer relating to
the Restricted Stock and the Option, the terms "Cause" and "Good Reason" shall
have the meanings contained in the Original Agreement without regard to such
amendments.

                  This Agreement shall not have the effect of amending or
otherwise modifying in any way any agreements between the Employer and the
Executive relating to stock options or restricted stock awards in existence on
the date of this Agreement (except to the extent that the agreements relating to
the Restricted Stock and the Option are modified by the immediately preceding
paragraph).

                  4.04 Participation in Other Benefit Plans. During the Period
of Employment, Executive will be entitled to participate in such retirement
plans, major medical, hospital, surgical and dental plans, executive disability
plans and other Employer benefits not described elsewhere in this Section 4 as
are being provided by Employer to executives at Executive's grade level from
time to time to the extent that Executive's age, positions and other factors
qualify him for such benefits. If, for any period during the Period of
Employment, Executive is not eligible by reason of length of service to
participate in such plans maintained by Employer, Employer shall provide
Executive with benefits equivalent to those provided under such plans and, with
respect to benefits provided by Employer equivalent to those provided under
Employer's major medical, hospital, surgical and dental plans, shall compensate
Executive on an after-tax basis for any additional income taxes payable by
Executive by reason of Employer providing such benefits directly rather than
through such plans. Upon a termination of employment for any reason and for the
remainder of the Executive's life and that of his current spouse, the Employer
shall continue to provide medical and dental benefits in the aggregate to the
Executive and his current spouse pursuant to the Employer's Retiree Health Care
Program at a subsidized cost on the same basis as the Employer subsidizes
premiums for retirees of the Employer who retired prior to January 1,

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1993 (collectively, "Medical Benefits"). The Executive and his current spouse's
entitlement to Medical Benefits shall survive the termination of this Agreement.

                  4.05 Long-Term Disability Benefits. During the Period of
Employment, Executive's annual benefit under Employer's long-term disability
plan shall not be less than 60% of the total of (i) Executive's base annual
salary at the date of disability plus (ii) the annual average of bonuses
received by Executive during the three prior Executive Incentive Plan years (or,
if such Plan shall cease to exist, such other annual bonus award program, if
any, pursuant to which Executive received annual bonus payments), and Employer
agrees to pay Executive (at the time benefits are payable under the long-term
disability plan) the excess, if any, of such annual benefit over the annual
benefit provided by Employer's long-term disability plan.

                  4.06 Survivor Benefit Programs; Life Insurance. During the
Period of Employment, Executive will be entitled to participate in survivor
benefit programs covering Employer's executives at Executive's grade level in
effect on the Commencement Date or as modified or supplemented by Employer from
time to time. If, for any period during the Period of Employment, Executive is
not eligible to participate in such survivor benefit programs, Employer shall
provide Executive with benefits equivalent to those provided under such
programs. In addition, during the Period of Employment Employer shall continue
to provide a life insurance policy with a face value of at least $1 million for
the benefit of a beneficiary designated by Executive (or, if no beneficiary is
designated, for the benefit of Executive's spouse). Such insurance policy shall
be in addition to the amount of group term insurance, if any, provided to
Executive under an insurance plan maintained by Employer for its employees
generally. Executive hereby represents to Employer that Executive is insurable
on normal terms and conditions.

                  4.07 Retirement Benefits. The Executive shall be entitled to a
retirement benefit pursuant to the Employer's Non-Qualified Supplemental
Executive Retirement Plan in effect as of the date hereof (the "NQSRP"), with
the following modifications: (i) the Executive's lifetime annual pension benefit
commencing at age 65 shall be 57.5% of his final three year's average
compensation, (ii) the Executive shall be fully vested in this benefit at age
60, with no actuarial or other reduction for retirement prior to age 65 but
after age 60 but with a reduction for commencement of benefits prior to age 65,
(iii) the Prior Plans' Offset (as defined in the NQSRP) shall be fixed at
$270,000 per year, and (iv) the Executive's minimum actual pension from all
Employer qualified plans and the NQSRP shall not be less than $1 million per
year, commencing at age 65 and, if the joint and survivor form of benefit is
elected, his spouse's minimum total survivor benefit from all sources upon
executive's death at or after age 65 shall not be less than $500,000 per year.
In the event of any conflict between the terms of this Section 4.07 and the
NQSRP, the provisions of this Section 4.07 shall prevail.

                  4.08 Vacation and Sick Leave. During the Period of Employment,
Executive will be entitled to reasonable paid vacation periods each year, will
be entitled to carry over to subsequent years unused vacation periods, and upon
termination of employment

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will be entitled to be paid for unused vacation periods, in each case in
accordance with Employer's policy for executives at Executive's grade level from
time to time. Executive will also be entitled to reasonable sick leave in
accordance with Employer's policy for executives at Executive's grade level from
time to time.

                  4.09 Perquisites. During the Period of Employment, Employer
will provide Executive with such perquisites as Employer from time to time
provides to executives at Executive's grade level including, without limitation,
(a) an automobile or automobile allowance consistent with Employer's policies
for an executive at Executive's grade level, (b) reimbursement of initiation,
fees, if any, and dues for one country club and one business club of Executive's
choice, and (c) the reimbursement of the cost of financial and tax counseling
(subject to an annual limit of two percent of current base annual salary).
Additionally, during the Period of Employment, Employer will reimburse Executive
for the difference between (i) interest payments made by Executive on
Executive's real estate mortgage loan for his personal residence (with the loan
amount not to exceed 80% of the purchase price for such residence) and (ii) the
interest payments that would apply to such loan if the interest rate on such
loan were one percentage point less than the interest rate generally prevailing
in the market at the time the loan was entered into.

                  4.10 Expenses. Employer will reimburse Executive for all
expenses and disbursements reasonably incurred by executive in the performance
of his duties during the Period of Employment, and such other facilities or
services as Employer and Executive may, from time to time, agree are
reimbursable, subject to the presentment of appropriate vouchers in accordance
with the Employer's normal policies for expense verification.

                  4.11 Indemnity and Hold Harmless. Except to the extent
inconsistent with Employer's charter or bylaws, Employer will indemnify
Executive and hold Executive harmless to the fullest extent permitted by law
with respect to acts of Executive as an officer and director of Employer during
the Period of Employment. Employer further agrees that if and to the extent
Employer in its sole discretion maintains directors' and officers' insurance
policies, Executive will be covered by such policies with respect to acts of
Executive as an officer and director of Employer during the Period of Employment
to the same extent as all other officers and directors of Employer under such
policies.

                  4.12 Payments on Account of Restricted Stock Relating to
Former Employment. Employer has established and is maintaining a bookkeeping
account for Executive (the "Bookkeeping Account"), which account was initially
credited with $305,074, representing the amount agreed to be paid to Executive
and not paid to date in respect of shares of Wells Fargo Company ("Wells Fargo")
Common Stock transferred by Wells Fargo to Executive, but not vested, as of
January 30, 1990. The amount credited to the Bookkeeping Account shall be deemed
to have been invested in such stock, bonds or other securities as Executive
shall, from time to time, designate in writing to Employer's Executive Vice
President, Human Resources, or such other individual as Employer shall
designate, which deemed investments must be reasonably acceptable to Employer
and must be of a type that Employer would be permitted to make under applicable
laws and regulations. The

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Bookkeeping Account shall be credited or debited, as the case may be, with gains
or losses deemed incurred as a result of such designated, deemed investments.

                  Certain debits have been made to the Bookkeeping Account as
provided in the Employment Agreement dated December 30, 1992 by and between
Employer and Executive (the "1992 Employment Agreement"). The balance of the
Bookkeeping Account shall become payable to, or with respect to, Executive upon
the earliest of the following events (i) January 30, 2003, (ii) Executive's
death or (iii) Executive's termination of employment for any reason within 24
months after a Change In Control. In the event the balance of the Bookkeeping
Account becomes payable upon Executive's termination of employment for any
reason other than death or within 24 months after a Change in Control, the
entire balance shall be paid within 30 days of such event. In the event the
balance of the Bookkeeping Account becomes payable upon Executive's death, the
entire balance shall be paid by December 31 of the calendar year in which
Executive dies. Upon the occurrence of any other event giving rise to Employer's
obligation to pay Executive the balance of the Bookkeeping Account, on January
30 of each year beginning in the year 2003 and for each of the next nine
consecutive years, after taking into account any amount credited or debited to
the Bookkeeping Account as a result of the deemed investment thereof or
otherwise pursuant to the terms of this Section 4.12, the following proportions
of the Bookkeeping Account shall be paid to Executive: 1/10, 1/9, 1/8, 1/7, 1/6,
1/5, 1/4, 1/3, 1/2 and the entire remaining balance thereof.

                  Employer, in its sole and absolute discretion, may alter the
timing or manner of payment of the balance of the Bookkeeping Account in the
event that Executive establishes to the satisfaction of Employer severe
financial hardship. Severe financial hardship will be deemed to have occurred in
the event of Executive's impending bankruptcy, a dependent's long and serious
illness or other events of similar magnitude. Executive may designate a
beneficiary or beneficiaries who, upon his death, are to receive distributions
that otherwise would have been paid to Executive. All designations shall be in
writing and shall be effective only if and when delivered to Employer during the
lifetime of Executive.

                  Employer shall have the right to deduct from all payments made
pursuant to this Section 4.12 any federal, state or local taxes required by law
to be withheld with respect to such payments. Executive and Employer understand
and agree that the timetable set forth above with respect to the payment of the
balance of the Bookkeeping Account is irrevocable and shall not be subject to
any amendment or modification. Further, Executive and Employer understand and
agree that Employer is under a contractual obligation to make payments to
Executive in accordance with this Section 4.12. Such payments shall not be
financed from any trust fund, insurance or otherwise and shall be paid solely
out of the general funds of Employer, and Executive shall have no interest
whatsoever in any investments made by Employer on account of Executive's request
with respect to deemed investments of the Bookkeeping Account. Executive will
not have any interest whatsoever in any specific asset of Employer as a result
of this Agreement, and Executive's rights to payments hereunder shall be no
greater than the right of any other general, unsecured creditor of Employer. In
no event shall Employer make any payment hereunder to any assignee or

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creditor of Executive or a beneficiary. Prior to the time of payment hereunder,
Executive or a beneficiary thereof shall have no rights by way of anticipation
or otherwise to assign or otherwise dispose of any interest under this Section
4.12, nor shall such rights be assigned or transferred by operation of law.

         5.       Termination.

                  5.01 Grounds for Termination. The Period of Employment will
terminate prior to the expiration of the term set forth in Section 2 of this
Agreement in the event that:

                  (a)      Executive shall die.

                  (b)      Executive shall qualify for and accrue payments under
                           Employer's Disability Program for a period covering
                           90 consecutive days.

                  (c)      Employer shall terminate the Period of Employment for
                           Cause (as hereinafter defined).

                  (d)      Executive shall terminate the Period of Employment
                           for (i) Good Reason (as hereinafter defined), (ii)
                           Good Reason following a Full Change in Control (as
                           hereinafter defined) or (iii) Good Reason following a
                           Partial Change in Control (as hereinafter defined).

                  (e)      Employer shall terminate the Period of Employment
                           other than for Cause.

                  (f)      Executive shall terminate the Period of Employment
                           for any reason not constituting Good Reason, Good
                           Reason following a Full Change in Control or Good
                           Reason following a Partial Change in Control.

                  Notwithstanding any termination of the Period of Employment,
Executive, in consideration of his employment hereunder to the date of such
termination, will remain bound by the provisions of this Agreement that
specifically relate to periods, activities or obligations upon or subsequent to
the termination of Executive's employment.

         5.02     Effect of Termination.

                  (a)      In the event of termination of the Period of
                           Employment pursuant to the provisions of Section
                           5.01(a) above, Executive's trust estate or estate, as
                           the case may be (as determined in accordance with
                           Section 8.02 of this Agreement), will be entitled to
                           be paid the base annual salary otherwise payable to
                           Executive pursuant to Section 4.01 of this Agreement
                           only through the date of such termination.
                           Additionally, Executive's survivors will be entitled
                           to any benefits provided under

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                           Employer's survivor benefit program. If the joint and
                           survivor form of benefit is elected, the Executive's
                           current spouse, should she survive the Executive,
                           shall be entitled to a survivor benefit based on a
                           50% joint and survivor annuity pursuant to the
                           Executive's retirement benefits described in Section
                           4.07, commencing on what would have been the
                           Executive's 65th birthday. In addition, the
                           Restricted Stock shall vest immediately and the
                           Option shall vest and become immediately exercisable.
                           The Executive's current spouse shall also be entitled
                           to the provision of Medical Benefits.

                  (b)      In the event of termination of the Period of
                           Employment pursuant to the provisions of section
                           5.01(b) above, Executive will be entitled to be paid
                           the base annual salary otherwise payable to Executive
                           pursuant to Section 4.01 of this Agreement only
                           through the date of such termination. Executive will
                           be entitled to benefits under Employer's Disability
                           Program and to the benefits provided for in Section
                           4.05 in connection with Employer's Disability Plan.
                           If Executive shall cease to be eligible for long-term
                           disability payments pursuant to the Disability Plan
                           within three years following the date of such
                           termination, Employer will pay Executive a lump sum
                           payment in the amount of Executive's annual base
                           salary at the time of such termination. The Executive
                           shall receive the retirement benefits described in
                           Section 4.07 commencing on his 65th birthday. In
                           addition, the Restricted Stock shall vest
                           immediately, and the Option shall vest and become
                           immediately exercisable. The Executive and his
                           current spouse shall also be entitled to the
                           provision of Medical Benefits.

                  (c)      In the event of termination of the Period of
                           Employment pursuant to the provisions of Section
                           5.01(c) or (f) above, Employer will have no further
                           obligations hereunder except that Employer will pay
                           Executive his base salary, at the rate then in
                           effect, and continue to provide Executive and his
                           current spouse Medical Benefits. Executive will not
                           be paid any annual bonus pursuant to Section 4.02 of
                           this Agreement for the calendar year in which the
                           termination occurs or any subsequent calendar year.

                  (d)      In the event of termination of the Period of
                           Employment pursuant to the provisions of Sections
                           5.01(d) or 5.01(e) above, Employer will (i) pay
                           Executive his full base salary through the date of
                           termination at the rate in effect at the time Notice
                           of Termination is given; (ii) pay as damages to
                           Executive, not later than 30 days following the date
                           of termination, a lump sum payment equal to three
                           times the sum of (A) Executive's annual base salary
                           in effect at the time Notice of Termination is given
                           and (B) the annual target bonus potential

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                           available to Executive at the time Notice of
                           Termination is given (or, in the event of termination
                           within 24 months following a Change in Control or in
                           the event of an Anticipatory Termination (as
                           hereinafter defined), if either of the following
                           amounts is greater, the bonus earned in the last
                           fiscal year prior to the date of termination or the
                           average bonus earned in the last three fiscal years
                           prior to the date of termination, whichever is
                           larger), (iii) continue to provide the employee
                           benefits described in Sections 4.04, 4.05 (with
                           disability benefits to be calculated as of the date
                           of termination), and 4.06 to which Executive was
                           entitled on the date of such termination for a period
                           of three years from the date of such termination and
                           thereafter, to provide the Executive and his current
                           spouse with Medical Benefits, (iv) continue to
                           provide the perquisites described in Section 4.09 to
                           which Executive was entitled on the date of such
                           termination for a period of three years from the date
                           of such termination, (v) cause the acceleration of
                           the exercisability of any stock option or the vesting
                           of any restricted stock grants (other than those
                           pursuant to Employer's Restricted Stock and
                           Performance Plan) that would have become exercisable
                           or vested, as the case may be, during the remaining
                           Period of Employment had no such termination
                           occurred, and cause the Restricted Stock and the
                           Option to become immediately vested and exercisable,
                           as the case may be, provided, however, that such
                           acceleration or immediate vesting shall occur only to
                           the extent that it is consistent with the last two
                           paragraphs of Section 4.03 hereof, (vi) cause the
                           acceleration of vesting of restricted stock grants
                           under Employer's Restricted Stock and Performance
                           Plan if the vesting schedule has been determined at
                           the time of such termination and such vesting would
                           have occurred during the remaining Period of
                           Employment had no such termination occurred, (vii)
                           give Executive credit for three additional years of
                           age and service (or five additional years in the
                           event of termination within 24 months following a
                           Change in Control or in the event of an Anticipatory
                           Termination) for all purposes in determining
                           Executive's retirement benefits pursuant to Section
                           4.07 and the NQSRP, (viii) in the event of
                           termination within 24 months following a Change in
                           Control or in the event of an Anticipatory
                           Termination, pay Executive the full amount of any
                           long-term cash incentive award for any plan periods
                           then in progress to the extent not provided for in
                           any Employer long-term cash incentive plan or plans,
                           (ix) in the event of termination within 24 months
                           following a Change in Control or in the event of an
                           Anticipatory Termination, pay Executive the
                           year-to-date pro-rata amount of any annual cash
                           incentive award for any plan as in effect immediately
                           prior to the Change in Control to the extent not
                           provided for in such plan or plans and the amount of
                           any annual cash incentive award for any plan as in
                           effect for the immediately prior year if Executive
                           would have received

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                       such an award if there had been no such termination of
                       employment in the then current year, and (x) pay for
                       individual outplacement counseling services to Executive
                       up to a maximum of $60,000. Except as otherwise provided
                       in clause (ix) of this Section 5.02 (d) , Executive will
                       not be paid any annual bonus pursuant to Section 4.02 of
                       this Agreement for the calendar year in which the
                       termination occurs.

                  5.03 Notice of Termination. Any purported termination by
Employer or Executive of the Period of Employment shall be communicated by
written Notice of Termination to the other party hereto. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which indicates the
specific termination provision in Section 5.01 above relied upon.

                  5.04 Offsets. Executive shall have no duty to seek other
employment. However, in the event of termination of the Period of Employment
pursuant to the provisions of Sections 5.01(d) or 5.01(e), the following offsets
will apply to reduce the payments and benefits which Executive shall be entitled
to receive pursuant to Section 5.02(d): (i) (A) in the event of termination
within 24 months following a Change in Control or in the event of an
Anticipatory Termination, the amount payable to Executive pursuant to Section
5.02(d)(ii) will be offset by any salary, cash bonus and other earned income
(within the meaning of Section 911(d)(2)(A) of the Internal Revenue Code of
1986, as amended (the "Code")) received by Executive for services rendered by
Executive to persons or entities other than the Employer during or with respect
to the 36-month period after the date of termination, or (B) in the event of
termination at any time not within 24 months following a Change in Control and
that is not an Anticipatory Termination, one-third of the amount payable to
Executive pursuant to Section 5.02(d)(ii)(A) and the entire amount payable to
Executive pursuant to Section 5.02(d)(ii)(B) shall be offset by amounts received
by Executive which are described in subparagraph (A) above; (ii) the benefits
payable to Executive pursuant to Section 5.02(d)(iii) and (iv) shall be
discontinued if Executive obtains full-time employment providing welfare
benefits during the 36-month period following the date of termination; and (iii)
in the event of termination at any time within 24 months following a Change in
Control or in the event of an Anticipatory Termination, any additional benefits
under Employer's NQSRP pursuant to Section 5.02(d) will be reduced by the amount
of vested defined benefit pension benefits and vested defined benefit
non-qualified supplemental retirement benefits actually payable to Executive
without any risk of forfeiture from persons or entities other than Employer
which are attributable to service rendered by Executive to such other persons or
entities during the 36 months following the date of termination of Executive's
employment. Such reduction shall be calculated based on the vested benefits
payable at age 65 under the single life annuity form of payment under the
applicable plans which are accrued by Executive during such period. The
foregoing calculations for a particular plan shall be made by the actuary for
such plan in accordance with generally accepted actuarial principles. The amount
of such reduction at age 65 shall be actuarially reduced if Executive's benefits
under the Employer's NQSRP, as modified by Section 4.07, commence before
Executive attains age 65.

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                  Not less frequently than annually (by December 31 of each
year), Executive shall account to Employer with respect to all payments and
benefits received by Executive which are required hereunder to be offset against
payments or benefits received by Executive from Employer. If the Employer has
paid amounts in excess of those to which Executive is entitled (after giving
effect to the offsets provided above), Executive shall reimburse Employer for
such excess by December 31 of such year. The requirements imposed under this
paragraph shall terminate on December 31 of the calendar year which includes the
third anniversary of the date of termination.

                  5.05 Additional Payments. In the event any payment or
distribution of any type by Employer to Executive or for his benefit, whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (the "Total Payments"), would be subject to the excise
tax imposed by Section 4999 of the Code, or any interest or penalties with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are collectively referred to as the "Excise Tax"), then Executive
shall be entitled to receive an additional cash payment (a "Gross-Up Payment")
equal to an amount such that after payment by Executive of all taxes (including
any interest or penalties imposed with respect to such taxes), including any
Excise Tax, imposed upon the Gross-Up Payment, Executive would retain an amount
of the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments.
For purposes of determining the amount of the Gross-Up Payment, which
determination shall be made by the Employer's independent auditors, at the
Employer's sole expense, Executive's tax rate shall be deemed to be the highest
statutory marginal state and Federal tax rate (on a combined basis) (including
Executive's share of F.I.C.A. and Medicare taxes) then in effect. If no
determination by Employer's auditors is made prior to the time a tax return
reflecting the Total Payments is required to be filed by Executive, Executive
will be entitled to receive a Gross-Up Payment calculated on the basis of the
Total Payments reported by Executive in such tax return, within 30 days of the
filing of such tax return. In all events, if a tax authority determines that a
greater Excise Tax should be imposed upon the Total Payments than is determined
by the Employer's independent auditors or reflected in Executive's tax return
pursuant to this Section 5.05, Executive shall be entitled to receive the full
Gross-Up Payment calculated on the basis of the amount of Excise Tax determined
to be payable by such tax authority from Employer within 30 days of such
determination.

                  5.06 Nonexclusivity of Rights. Nothing in this Agreement shall
prevent or limit Executive from continuing or future participation in any
benefit, bonus, incentive, retirement or other plan or program provided by
Employer and for which Executive may qualify, nor, except as expressly provided
in this Agreement, shall anything herein limit or reduce such rights as
Executive may have under any other agreement with, or plan, program, policy or
practice of, Employer. Amounts which are vested benefits or which Executive is
otherwise entitled to receive under any agreement with, or plan, program, policy
or practice of, Employer (including, without limitation, the cashout of unused
vacation days upon termination of employment) shall be payable in accordance
with such agreement, plan, program, policy or practice, except as explicitly
modified by this Agreement. Notwithstanding the foregoing, if Executive becomes
entitled to benefits under Article 5 of

                                      -11-

<PAGE>   12

this Agreement, Executive shall not be entitled to receive payments under any
other severance pay plan or program sponsored or maintained by Employer or any
of its Affiliates.

         6.       Non-Competition and Unfair Competition.

                  6.01 Agreement Not to Compete. Without the approval by
resolution of the Board of Directors of Employer, upon termination of
Executive's employment with Employer by Employer for Cause pursuant to Section
5.01(c) or by Executive without Good Reason, Good Reason following a Full Change
in Control or Good Reason following a Partial Change in Control pursuant to
Section 5.01(f), Executive will not, for a period of three years thereafter,
become an officer, employee, agent, partner, director or substantial stockholder
(holding more than 5% of the voting securities) of any bank, savings bank, trust
company, bank and trust company, savings and loan association or holding company
thereof, in each case if such entity conducts business in the State of
California, the State of Colorado, the State of Idaho, the State of Illinois,
the State of Iowa, the State of Kansas, the State of Minnesota, the State of
Montana, the State of Nebraska, the State of Nevada, the State of North Dakota,
the State of Oregon, the State of South Dakota, the State of Utah, the State of
Washington, the State of Wisconsin, the State of Wyoming or any other State in
which Employer has substantial operations.

                  6.02 Agreement Not to Solicit. Without the approval by
resolution of the Board of Directors of Employer, upon termination of
Executive's employment with Employer for any reason whatsoever, Executive will
not, for the remainder of the Period of Employment if no termination had
occurred (or, if longer, for the one-year period following such termination),
(i) solicit or aid in soliciting as a customer or client of banking or related
financial services (including, without limitation trust, credit card and
investment management services) any person, firm, corporation, association or
other entity (A) that was a customer or client of Employer or any Affiliate of
Employer, and for which Executive or anyone under Executive's supervision
performed any services or with which substantial business relations were
maintained by Employer or any Affiliate of Employer at any time during the five
years prior to the termination of the Period of Employment or (B) whose identity
or particular needs Executive otherwise discovered as a result of his employment
with Employer, or (ii) solicit or aid in soliciting any employees of Employer or
any Affiliate of Employer to leave their employment. Without the approval by
resolution of the Board of Directors of Employer, upon termination of
Executive's employment with Employer for any reason whatsoever, Executive agrees
never to copy, remove from Employer or its Affiliates, dispose or make any use
of any confidential customer list, confidential business information with
respect to customers, confidential materials relating to the practices or
procedures of Employer or its Affiliates, or any other proprietary information.

         7.       Taxes. All payments to be made to Executive under this
Agreement will be net of required withholding of federal, state and local income
and employment taxes. Whenever under this Agreement Executive is to be
compensated or reimbursed on an "after-tax basis," Executive will be assumed to
be subject to federal income taxes at the highest marginal rate applicable to
individuals and to state income taxes at the highest

                                      -12-

<PAGE>   13

marginal effective rate for residents of Minneapolis, Minnesota.

         8.       Miscellaneous.

                  8.01 Governing Law. This Agreement is made under and shall be
governed by and construed in accordance with the laws of the State of Minnesota.

                  8.02 Successors. This Agreement shall be binding upon and
inure to the benefit of Employer and its successors. This Agreement will inure
to the benefit of, be enforceable by, and any amounts and benefits owed to
Executive at the time of Executive's death, unless otherwise provided herein,
will be paid to, the Trustee under the John F. and Beverly J. Grundhofer Living
Trust Agreement, or, if such Trust is not then in existence, the personal
representative or personal representatives of Executive's estate. Reference to
the "John F. and Beverly J. Grundhofer Living Trust Agreement" means that
certain Declaration of Trust, John F. and Beverly J. Grundhofer Living Trust,
dated February 22, 1988, by and between John F. and Beverly J. Grundhofer, as
donors and as original Trustees, as amended and existing at John F. Grundhofer's
death. Reference to the Trustee under the John F. and Beverly J. Grundhofer
Living Trust Agreement means the then acting Trustee or Trustees under the John
F. and Beverly J. Grundhofer Living Trust Agreement and any successor Trustees.

                  Employer will require the Resulting Corporation (as
hereinafter defined) or any other successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of
the business and/or consolidated assets of Employer and its subsidiaries to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Employer would be required to perform if no such
succession had taken place. Failure of Employer to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a breach of
this Agreement and shall entitle Executive to compensation from Employer in the
same amount and on the same terms as Executive would be entitled to hereunder if
Executive terminated his employment for Good Reason following a Change in
Control, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the date of
termination and Notice of Termination shall be deemed to have been given on such
date. In any case where a successor assumes the Employer's obligations under
this Agreement by operation of law, the requirements imposed in this paragraph
will be satisfied if the successor acknowledges to Executive in writing that it
has assumed the Employer's obligations under this Agreement by operation of law
within 30 days of receipt of a written notice from Executive requesting such
acknowledgment.

                  8.03 Prior Agreements. This Agreement contains the entire
agreement of the parties relating to the employment of Executive by Employer and
the other matters discussed herein and supersedes all prior agreements and
understandings with respect to such subject matter, and the parties hereto have
made no agreements, representations or warranties relating to the subject matter
of this Agreement which are not set forth herein. The Original

                                      -13-

<PAGE>   14

Agreement is hereby amended and restated. The Change in Control Severance Pay
Agreement entered into between Employer and Executive on March 16, 1992, which
was attached as Exhibit A to the 1992 Employment Agreement with Employer,
remains terminated and of no force or effect.

                  8.04 Amendments. No amendment or modification of this
Agreement will be deemed effective unless made in writing and signed by each
party hereto.

                  8.05 No Waiver. No term or condition of this Agreement will be
deemed to have been waived, nor will there be any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver will not be deemed a continuing waiver unless specifically stated, will
operate only as to the specific term or condition waived and will not constitute
a waiver of such term or condition for the future or as to any act other than
that specifically waived.

                  8.06 Assignment. This Agreement is not assignable, in whole or
in part, by any party without the written consent of the other party.

                  8.07 Injunctive Relief. Executive agrees that it would be
difficult to compensate Employer fully for damages for any violation of the
provisions of this Agreement, including without limitation the provisions of
Section 6. Accordingly, Executive specifically agrees that Employer will be
entitled to temporary and permanent injunctive relief to enforce the provisions
of this Agreement and that such relief may be granted without the necessity of
proving actual damages. This provision with respect to injunctive relief will
not, however, diminish the right of Employer to claim and recover damages in
addition to injunctive relief.

                  8.08 Disputes and Legal Fees.

                  (a)  Before a Change in Control. Any controversy or claim
                       arising out of or relating to this Agreement, or the
                       breach thereof, which is not resolved by the parties will
                       not sooner than 30 days after the dispute shall arise, be
                       settled by arbitration before three arbitrators in
                       accordance with the rules of the American Arbitration
                       Association, and judgment upon an award rendered by the
                       arbitrators, or at least a majority of them, may be
                       entered in any court having jurisdiction thereof;
                       provided, however, that Employer will be entitled to seek
                       injunctive or other equitable relief in a court of law to
                       enforce the provisions of Section 6. Such arbitration
                       shall be conducted in Minneapolis, Minnesota. The
                       expenses incurred in connection with any arbitration,
                       including but not limited to each party's legal fees and
                       the arbitrators' fees and expenses, will be allocated
                       between the parties according to the relative fault of
                       each, as determined by the arbitrators.

                                      -14-

<PAGE>   15

                  (b)  After a Change in Control. Subparagraph (a) above shall
                       not apply after a Change in Control, and the provisions
                       of this subparagraph (b) shall apply instead. If
                       Executive so elects, any dispute or controversy arising
                       under or in connection with this Agreement shall be
                       settled exclusively, by arbitration in accordance with
                       the rules of the American Arbitration Association then in
                       effect. Judgment may be entered on the arbitrator's award
                       in any court having jurisdiction. If Executive does not
                       elect arbitration, Executive may pursue any and all legal
                       remedies available to him. Employer shall pay to
                       Executive any legal fees and expenses reasonably incurred
                       by him after a Change in Control. If Executive elects
                       arbitration, Employer will pay all fees and expenses of
                       the arbitrator.

                  8.09 Severability. To the extent that any provision of this
Agreement shall be determined to be invalid or unenforceable, the invalid or
unenforceable portion of such provision will be deleted from this Agreement, and
the validity and enforceability of the remainder of such provision and of this
Agreement will be unaffected. In furtherance of and not in limitation of the
foregoing, it is expressly agreed that should the duration of or geographical
extent of, or business activities covered by, the noncompetition covenant
contained in Section 6 be determined to be in excess of that which is valid or
enforceable under applicable law, then such provision will be construed to cover
only that duration or extent, or those activities which may validly or
enforceably be covered. Executive acknowledges the uncertainty of the law in
this respect and expressly stipulates that this Agreement will be construed in a
manner which renders its provisions valid and enforceable to the maximum extent
(not exceeding its express terms) possible under applicable law.

                  8.10 Notices. All notices under this Agreement will be in
writing and will be deemed effective when delivered in person (in Employer's
case, to its Secretary) or twenty-four (24) hours after deposit thereof in the
U.S. mails, postage prepaid, for delivery as registered or certified mail,
addressed, in the case of Executive, to him at his last residential address
known by Employer and, in the case of Employer, to its corporate headquarters,
attention of its Secretary, or to such other address as Executive or Employer
may designate in writing at any time or from time to time to the other party. In
lieu of notice by deposit in the U.S. mails, a party may give notice by
telegram, telex or telecopy, in which case such notice will be deemed effective
upon receipt.

                  8.11 Counterparts. This Agreement may be executed by the
parties hereto in counterparts, each of which will be deemed to he an original,
but all such counterparts will together constitute one and the same instrument.

                  8.12 Headings. The headings of paragraphs herein are included
solely for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.

                                      -15-

<PAGE>   16

                  8.13 Definitions. For purposes of this Agreement, the
following additional definitions shall apply:

         8.13.1 "Acquiring Person" shall mean any Person who or which, together
         with all Affiliates and Associates of such person, is the Beneficial
         Owner, directly or indirectly, of securities of Employer representing
         20% or more of the combined voting power of Employer's then outstanding
         securities, but shall not include any Company Entity.

         8.13.2 "Affiliate" shall have the meaning ascribed to such term in Rule
         12b-2 promulgated under the Exchange Act.

         8.13.3 "Announcement Date" shall mean the date of the public
         announcement of the transaction, event or course of action that results
         in a Change in Control.

         8.13.4 "Anticipatory Termination" shall mean a termination of
         employment pursuant to Section 5.01(d) or 5.01(e) hereof as a result of
         an act or event that occurs prior to a Change in Control and after the
         Announcement Date and either (i) at the request of any other party to a
         transaction, or any Person associated with the event or course of
         events (other than Employer or a Company Entity), that results in a
         Change in Control, or (ii) otherwise in contemplation of a Change in
         Control; provided, that no termination shall be deemed an Anticipatory
         Termination unless the Change in Control to which it relates actually
         occurs.

         8.13.5 "Associate" shall have the meaning ascribed to such term in Rule
         12b-2 promulgated under the Exchange Act.

         8.13.6 "Beneficial Owner" shall have the meaning ascribed to such term
         in Rule 13d-3 promulgated under the Exchange Act.

         8.13.7 "Board of Directors" shall mean the board of directors of
         Employer.

         8.13.8 "Cause" shall mean termination upon (i) the willful and
         continued failure by Executive to substantially perform his duties with
         Employer (other than any such failure resulting from his disability or
         from termination by Executive for Good Reason, Good Reason following a
         Full Change in Control or Good Reason following a Partial Change in
         Control), after a written demand for substantial performance is
         delivered to Executive that specifically identifies the manner in which
         Employer believes that Executive has not substantially performed his
         duties, and Executive has failed to resume substantial performance of
         his duties on a continuous basis within 14 days of receiving such
         demand, (ii) the willful engaging by Executive in conduct which is
         demonstrably and materially injurious to Employer, monetarily or
         otherwise, (iii) Executive's conviction of a felony which impairs his
         ability substantially to perform his duties with Employer or (iv) the
         issuance of an order under Section 8 (e) (4) or 8 (g) (1) of the
         Federal Deposit Insurance Act by which Executive is removed

                                      -16-

<PAGE>   17

         and/or permanently prohibited from participating in the conduct of the
         affairs of Employer and/or any Affiliate of Employer. For purposes of
         this paragraph, no act, or failure to act, on Executive's part will be
         deemed "willful" unless done, or omitted to be done, by Executive not
         in good faith and without reasonable belief that his action or omission
         was in the best interest of Employer. Failure to perform Executive's
         duties with Employer during any period of disability shall not
         constitute "Cause."

         8.13.9 "Change in Control" shall mean a Full Change in Control or a
         Partial Change in Control.

         8.13.10 "Company Entity" shall mean Employer, any subsidiary of
         Employer or any employee benefit plan of Employer or of any subsidiary
         of Employer or any entity holding shares of the voting capital stock of
         Employer organized, appointed or established for, or pursuant to the
         terms of any such plan.

         8.13.11 "Continuing Director" shall mean any person who is a member of
         the Board of Directors, while such person is a member of the Board of
         Directors, who is not an Acquiring Person or an Affiliate or Associate
         of an Acquiring Person, or a representative of an Acquiring Person or
         of any such Affiliate or Associate, and who (x) was a member of the
         Board of Directors as of the date of this Agreement or (y) subsequently
         becomes a member of the Board of Directors, if such person's initial
         nomination for election or initial election to the Board of Directors
         has been approved in advance by the Continuing Directors; provided that
         any director designated by or on behalf of a Person who has entered
         into an agreement with Employer (or who is contemplating entering into
         such an agreement) to effect a consolidation or merger of Employer or a
         Company Entity, or other reorganization, with or into one or more
         entities which are not Company Entities, and any director that serves
         in connection with the act of the Board of Directors of increasing the
         number of directors and filling vacancies in connection with, or in
         contemplation of, any such transaction, shall not be deemed to have
         received such advance approval for initial nomination or election, and
         any such director shall not be deemed to be a Continuing Director in
         each case solely for the purpose of determining whether the addition of
         members of the Board of Directors in connection with, or in
         contemplation of, such transaction results in a Full Change in Control
         under clause (B) of Section 8.13.14 of this Agreement.

         8.13.12 "Employer" shall mean U.S. Bancorp, a Delaware corporation, or
         any successor thereto pursuant to Section 8.02 hereof (including a
         Resulting Corporation) or by operation of law.

         8.13.13 "Exchange Act" shall mean the Securities Exchange Act of 1934,
         as amended.

         8.13.14 "Full Change In Control" shall mean any of the following after
         the date hereof:

                                      -17-
<PAGE>   18

                           (A) the public announcement (which, for purposes of
                    this definition, shall include, without limitation, a report
                    filed pursuant to Section 13(d) of the Exchange Act) by
                    Employer or any Person that a Person (other than a Company
                    Entity) has become the Beneficial Owner, directly or
                    indirectly, of securities of Employer (x) representing 20%
                    or more, but not more than 50%, of the combined voting power
                    of Employer's then outstanding securities unless the
                    transaction resulting in such ownership has been approved in
                    advance by the Continuing Directors or (y) representing more
                    than 50% of the combined voting power of Employer's then
                    outstanding securities (regardless of any approval by the
                    Continuing Directors); or

                           (B) the Continuing Directors cease to constitute a
                    majority of the Board of Directors of Employer or the
                    Resulting Corporation, except as a result of the death,
                    retirement or disability of one or more Continuing
                    Directors; or

                           (C) any sale, lease, exchange or other transfer (in
                    one transaction or a series of related transactions) of all
                    or substantially all of the consolidated assets of Employer
                    and its subsidiaries or the adoption of any plan of
                    liquidation or dissolution of Employer.

                    Notwithstanding the foregoing, any of the foregoing events
                    that would constitute a Full Change in Control may be deemed
                    to be a Partial Change in Control in the sole discretion of
                    the Board of Directors as evidenced by adoption of a
                    resolution by a majority of a quorum of the Board of
                    Directors at a duly held meeting or by unanimous written
                    action in lieu of a meeting, which determination may be made
                    at any time prior to the Change in Control or, in the case
                    of subparagraph (A) above, at any time within 20 days
                    following the Change in Control.

         8.13.15    "Good Reason" shall mean termination of the Period of
         Employment (other than an Anticipatory Termination) by Executive, at
         any time that is not during the 24-month period following a Change in
         Control, upon the occurrence, without Executive's consent, of any one
         or more of the following: (i) the assignment to Executive of any duties
         inconsistent in any respect with Executive's position (including
         status, offices, titles and reporting requirements), authorities,
         duties or other responsibilities as in effect immediately prior to such
         assignment or any other action of Employer which results in a
         diminishment in such position, authority, duties or responsibilities,
         other than an insubstantial and inadvertent action which is remedied by
         Employer promptly after receipt of notice thereof given by Executive,
         and other than the Employer's providing the title of President of the
         Employer to another executive, provided that Executive continues as
         Chairman of the Board (if he is then Chairman of the Board) and Chief
         Executive Officer of Employer; (ii) a reduction by Employer in
         Executive's base salary as in effect on the Commencement Date or as the
         same shall be increased from time to time; (iii) Employer's requiring

                                     -18-

<PAGE>   19

         Executive to be based at a location in excess of 30 miles from the
         location of Executive's principal office as of the Commencement Date;
         (iv) the failure by Employer to provide Executive with compensation and
         benefits at least equal (in terms of benefit levels and/or reward
         opportunities) to those provided for under each compensation or benefit
         plan, program, policy and practice as in effect at the Commencement
         Date (or as in effect following the Commencement Date, if greater); (v)
         a material breach by Employer of its obligations under this Agreement
         after notice in writing from Executive and a reasonable opportunity for
         Employer to correct such conduct; (vi) the failure of Employer to
         obtain a satisfactory agreement from the Resulting Corporation or any
         other successor to Employer to assume and agree to perform this
         Agreement; and (vii) any purported termination by Employer of
         Executive's employment that is not effected pursuant to a Notice of
         Termination (as previously defined). Executive's continued employment
         shall not constitute consent to, or a waiver of rights with respect to,
         any circumstance constituting Good Reason. Termination by Executive of
         the Period of Employment for Good Reason shall constitute termination
         for Good Reason for all purposes of this Agreement, notwithstanding
         that Executive may also thereby be deemed to have "retired" under any
         applicable retirement programs of Employer.

         8.13.16 "Good Reason following a Full Change in Control" shall mean
         termination of the Period of Employment by Executive, during the
         24-month period following a Full Change in Control (or prior to a Full
         Change in Control in the event of an Anticipatory Termination), upon
         the occurrence, without Executive's express written consent, of any one
         or more of the following: (i) the assignment to Executive of any duties
         inconsistent in any respect with Executive's position (including
         status, offices, titles, and reporting requirements), authorities,
         duties, or other responsibilities as in effect immediately prior to the
         Announcement Date or any other action of Employer which results in a
         diminishment in such position, authority, duties, or responsibilities,
         other than an insubstantial and inadvertent action which is remedied by
         Employer promptly after receipt of notice thereof given by Executive;
         (ii) a reduction by Employer in Executive's base salary as in effect
         immediately prior to the Announcement Date (or as in effect following
         the Announcement Date, if greater); (iii) the failure by the Employer
         to provide Executive total cash compensation (consisting of base salary
         plus cash bonus) with respect to any fiscal year (including the fiscal
         year in which the Full Change in Control occurs and the year prior to
         the fiscal year in which the Full Change in Control occurs if the cash
         bonus for such prior fiscal year has not been determined as of the date
         of the Full Change in Control, and including a portion of a fiscal year
         if a fiscal year is not complete at the end of the 24-month period
         following a Full Change in Control) at least equal to the greatest of
         (x) actual total cash compensation paid to Executive with respect to
         the fiscal year prior to the fiscal year for which the calculation is
         made or (y) the average annual total cash compensation paid to
         Executive with respect to the two fiscal years prior to the fiscal year
         for which the calculation is made (total cash compensation "with
         respect to any fiscal year" shall be determined at the time the bonus
         with respect to such fiscal year is determined, even if such bonus is
         determined after the 24-month period following a

                                      -19-

<PAGE>   20

         Full Change in Control, and the bonus portion of cash compensation for
         services rendered in a portion of a fiscal year determined at the end
         of 24 months following a Full Change in Control shall be determined by
         reference to the pro-rata portion of any annual bonus for such fiscal
         year); (iv) a reduction by Employer in Executive's annual target bonus
         or maximum bonus award opportunities as in effect immediately prior to
         the Announcement Date (or as in effect following the Announcement Date,
         if greater); (v) the Employer's requiring Executive to be based at a
         location that is both outside the same metropolitan area of, and in
         excess of 30 miles from, the location of Executive's principal office
         immediately prior to the Announcement Date; (vi) the failure by the
         Employer to provide employee benefit plans, programs, policies and
         practices (including, without limitation, retirement plans and medical,
         dental, life and disability insurance coverage) to Executive and
         Executive's family and dependents (if applicable) that provide
         substantially similar benefits, in terms of aggregate monetary value,
         to Executive and Executive's family and dependents (if applicable) at
         substantially similar costs to Executive as the benefits provided by
         those plans, programs, policies and practices in effect immediately
         prior to the Announcement Date (or as in effect following the
         Announcement Date, if greater); (vii) a material breach by Employer of
         its obligations under this Agreement after notice in writing from
         Executive and a reasonable opportunity for Employer to correct such
         conduct; (viii) the failure of Employer to obtain a satisfactory
         agreement from the Resulting Corporation or any other successor to
         Employer to assume and agree to perform this Agreement; and (ix) any
         purported termination by the Employer of Executive's employment that is
         not effected pursuant to a Notice of Termination. Termination by
         Executive of the Period of Employment for Good Reason following a Full
         Change in Control shall constitute termination for Good Reason
         following a Full Change in Control for all purposes of this Agreement,
         notwithstanding that Executive may also thereby be deemed to have
         "retired" under any applicable retirement programs of Employer.

         8.13.17 "Good Reason following a Partial Change in Control" shall mean
         termination of the Period of Employment by Executive, during the
         24-month period following a Partial Change in Control (or prior to a
         Partial Change in Control in the event of an Anticipatory Termination),
         upon the occurrence, without Executive's express written consent, of
         any one or more of the following: (i) a reduction by the Employer in
         Executive's base salary as in effect immediately prior to the
         Announcement Date; (ii) a reduction by the Employer in Executive's
         annual target bonus or maximum bonus award opportunities as in effect
         immediately prior to the Announcement Date; (iii) the Employer's
         requiring Executive to be based at a location that is both outside the
         same metropolitan area of, and in excess of 30 miles from, the location
         of Executive's principal office immediately prior to the Announcement
         Date; (iv) a material breach by Employer of its obligations under this
         Agreement after notice in writing from Executive and a reasonable
         opportunity for Employer to correct such conduct; and (v) any purported
         termination by the Employer of Executive's employment that is not
         effected pursuant to a Notice of Termination. Any event which may
         otherwise constitute Good Reason following a Partial Change in Control
         shall cease to constitute Good Reason following a Partial Change in
         Control if Executive does not have a Termination of Employment within
         90 days following such event. Termination by Executive of the Period of
         Employment for Good Reason following a Partial Change

                                     -20-
<PAGE>   21

         in Control shall constitute termination for Good Reason following a
         Partial Change in Control for all purposes of this Agreement,
         notwithstanding that Executive may also thereby be deemed to have
         "retired" under any applicable retirement programs of Employer.

         8.13.18 "Partial Change in Control" shall mean any of the following
         after the date hereof:

                            (A) a consolidation or merger of Employer or a
                 Company Entity, or other reorganization, with or into one or
                 more entities which are not Company Entities, as a result of
                 which less than 60% of the outstanding voting securities of the
                 Resulting Corporation are, or are to be, owned by former
                 shareholders of Employer as determined immediately prior to
                 consummation of such transaction (excluding voting securities
                 of the Resulting Corporation owned, or to be owned, by such
                 shareholders by reason of their ownership prior to such
                 transaction of securities of any entity other than Employer)
                 and as a result of which the Continuing Directors constitute
                 more than 50% of the Board of Directors of the Resulting
                 Corporation;

                            (B) the public announcement (which, for purposes of
                 this definition, shall include, without limitation, a report
                 filed pursuant to Section 13(d) of the Exchange Act) by
                 Employer or any Person that a Person (other than a Company
                 Entity) has become the Beneficial Owner, directly or
                 indirectly, of securities of Employer representing 20% or more,
                 but not more than 50%, of the combined voting power of the
                 Employer's then outstanding securities if the transaction
                 resulting in such ownership has been approved in advance by the
                 Continuing Directors; or

                            (C) an event that would have constituted a Full
                 Change in Control but was deemed to be a Partial Change in
                 Control in accordance with the definition of Full Change in
                 Control.

         8.13.19 "Person" shall have the meaning ascribed to such term as such
         term is used in Sections 13(d) and 14(d) of the Exchange Act.

         8.13.20 "Resulting Corporation" shall mean the surviving corporation in
         any consolidation, merger or other reorganization to which Employer is
         a party; provided, however, that if the surviving corporation in any
         such transaction is a subsidiary of another corporation, then the
         Resulting Corporation is the ultimate parent corporation of such
         surviving corporation; and provided, further, that in the event of a

                                      -21-

<PAGE>   22

         consolidation, merger or other reorganization to which a Company Entity
         (other than Employer) is a party, then Employer shall be deemed the
         Resulting Corporation.

                    8.14 Code Section 162(m). Notwithstanding any other
provision of this Agreement to the contrary, to the extent that Employer's tax
deduction for remuneration in respect of the payment of any amount under
Sections 5.02, 5.05 or 8.02 of this Agreement would be disallowed under Code
Section 162(m) by reason of the fact that Executive's applicable employee
remuneration, as defined in Code Section 162(m)(4), either exceeds or, if such
amount were paid, would exceed the $1,000,000 limitation in Code Section
162(m)(1), Employer may, in its sole discretion, defer the payment of such
amount, but only to the extent that, and for so long as, Employer's tax
deduction in respect of the payment thereof would be so disallowed under Code
Section 162(m); provided that no payment may be deferred beyond three months
after the end of Employer's fiscal year in which Executive's termination of
employment occurs, and Employer may accelerate the payment of previously
deferred amounts if it determines that the amount of the tax deduction that
would be disallowed is not significant. Amounts which are deferred under this
Section 8.14 will be credited with interest at a rate determined by Employer
from time to time, but in no event less than the long-term applicable federal
rate under Code Section 1274(d) in effect from time to time.

         IN WITNESS WHEREOF, Employer and Executive have executed this Agreement
as of the date set forth in the first paragraph hereof.

                                   U.S. BANCORP

                                   By  /s/ Lee R. Mitau
                                     -------------------------------------------
                                   Its Executive Vice President - Corporate
                                       Development, General Counsel and
                                       Secretary

                                   /s/ John F. Grundhofer
                                   ---------------------------------------------
                                   John F. Grundhofer

                                      -22-<PAGE>   1
                                                                   EXHIBIT 10.1

                       AMENDMENT NO. 5 TO CREDIT AGREEMENT

            THIS AMENDMENT NO. 5 TO CREDIT AGREEMENT (the "Amendment No. 5") is
dated as of June 15, 2000 and is made by and among CHAMPION ENTERPRISES, INC., a
Michigan corporation (the "Borrower"), the GUARANTORS set forth herein, the
BANKS set forth herein, BANK ONE, N.A., as Syndication Agent, COMERICA BANK, as
Documentation Agent and NATIONAL CITY BANK, HARRIS TRUST AND SAVINGS BANK,
KEYBANK NATIONAL ASSOCIATION, BANK OF AMERICA, N.A. and WACHOVIA BANK, N.A., as
Co-Agents, and PNC BANK, NATIONAL ASSOCIATION, in its capacity as Administrative
Agent for the Banks (the "Agent").

                        W  I  T  N  E  S  S  E  T  H:

            WHEREAS, the Borrower, the Guarantors, the Banks, the Syndication
Agent, the Documentation Agent, the Co-Agents and the Agent are parties to that
certain Credit Agreement dated as of May 5, 1998, as amended by Amendment No. 1
dated as of December 18, 1998, Amendment No. 2 dated as of March 31, 1999,
Amendment No. 3 dated as of July 1, 1999 and Amendment No. 4 dated as of
February 14, 2000 (the "Credit Agreement"); and

            WHEREAS, the parties hereto desire to further amend the Credit
Agreement as hereinafter provided.

            NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:

            1. Definitions.

      Defined terms used herein unless otherwise defined herein shall have the
meanings ascribed to them in the Credit Agreement as amended by this Amendment
No. 5.

            2. Amendment of Credit Agreement.

            A. The first recital clause of the Credit Agreement is hereby
deleted in its entirety and the following is inserted in lieu thereof:

            "WHEREAS, the Borrower has requested the Banks to provide a
revolving credit facility to the Borrower in an aggregate principal amount not
to exceed $100,000,000; and"

            B. Section 1.1 [Definitions] of the Credit Agreement is hereby
amended by deleting the definitions of "Base Net Worth", "Consolidated Cash Flow
From Operations" and "EBIT" in their entirety and inserting in lieu thereof the
following:

            Base Net Worth shall mean the sum of $378,000,000 plus (i) 50% of
consolidated net income of the Borrower and its Subsidiaries for each fiscal
quarter in which net income was earned (as opposed to a net loss) during the
period from April 2, 2000 through the date of determination and (ii) 100% of the
proceeds received by the Borrower or any of its Subsidiaries after the Closing
Date resulting from the issuance of capital stock of the Borrower or any of its
Subsidiaries (other than proceeds received from the exercise of stock options by
employees of the Borrower), net of any fees and expenses incurred by the
Borrower or any of its Subsidiaries in connection with such sale.

                                      -1-
<PAGE>   2

            Consolidated Cash Flow From Operations for any period of
determination shall mean (i) the sum of net income, depreciation, amortization,
interest expense, income tax expense, the $33,600,000 special charge booked by
the Borrower in the third quarter of 1999 in connection with the bankruptcy of
independent home retailer, Ted Parker Home Sales, Inc. and costs incurred for up
to four (4) plant closings between April 2, 2000 and September 30, 2001 provided
such costs shall not exceed $2,000,000 per plant closing minus (ii) noncash
credits to net income and gains on the disposition of assets to the extent
included in net income but not included in operating income, in each case of the
Borrower and its Subsidiaries for such period determined and consolidated in
accordance with GAAP.

            EBIT shall mean, for any period of determination, the sum of net
income, interest expense, income tax expense, the $33,600,000 special charge
booked by the Borrower in the third quarter of 1999 in connection with the
bankruptcy of independent home retailer, Ted Parker Home Sales, Inc., and costs
incurred for up to four (4) plant closings between April 2, 2000 and September
30, 2001 provided such costs shall not exceed $2,000,000 per plant closing, in
each case of the Borrower and its Subsidiaries for such period determined and
consolidated in accordance with GAAP.

            C. Section 1.1 [Definitions] of the Credit Agreement is hereby
amended by inserting in alphabetical order a new definition "Interest Coverage
Ratio" as follows:

            "Interest Coverage Ratio shall mean the ratio of EBIT to
consolidated interest expense of the Borrower and its Subsidiaries, calculated
as of the end of each fiscal quarter for the four (4) fiscal quarters then
ended."

            D. Section 2.1.1 [Revolving Credit Loan Commitments] of the Credit
Agreement is hereby amended by deleting the last two (2) sentences of such
section and inserting in lieu thereof the following:

            The Revolving Credit Loans shall be due and payable in full on the
Expiration Date or the earlier acceleration thereof.

            E. Section 2.10.1 [Sale of Assets] of the Credit Agreement is hereby
amended by deleting the reference to Section 2.11.2(ii)" and inserting in lieu
thereof "Section 2.11.2.":

            F. Section 2.11.2 [Mandatory Reductions] of the Credit Agreement is
hereby deleted in its entirety and the following is inserted in lieu thereof:

            2.11.2  Mandatory Reductions.

                    The Revolving Credit Commitments shall be permanently
reduced on the date of any mandatory prepayment required pursuant to Section
2.10.1 by an amount equal to the gross proceeds (after deducting fees and
expenses incurred in connection with such sale) paid by the buyer or buyers in
connection with such asset securitization or other receivables sale transaction,
and in each case, each Bank's Revolving Credit Commitment shall be reduced in
accordance with its Ratable Share.

            G. The Credit Agreement is hereby amended by inserting a new

                                      -2-
<PAGE>   3

section immediately following Section 7.1.11 as set forth below:

            7.1.12  Stock Repurchases.

                    The Loan Parties and each of their Subsidiaries may make or
pay, or agree to become or remain liable to make or pay, distributions on
account of the purchase, redemption, retirement or acquisition of their
respective shares of capital stock (or warrants, options or rights therefor),
(the foregoing are collectively referred to as "Stock Repurchases") so long as
the Borrower has delivered to the Agent, at least five (5) Business Days prior
to any such distribution, evidence satisfactory to the Agent, in its reasonable
discretion, that, after giving effect to such Stock Repurchase, (i) the Leverage
Ratio shall not be greater than 3.00 to 1.00 and (ii) the Interest Coverage
Ratio shall not be less than 3.00 to 1.00; provided that, notwithstanding the
foregoing, at any time the Borrower may make Stock Repurchases in an aggregate
amount not to exceed $3,000,000 in connection with employee benefit programs.

            H. Section 7.2.1 [Indebtedness] of the Credit Agreement is hereby
amended by deleting clause (v) and inserting in lieu thereof the following:

            "(v) Unsecured Indebtedness of a Loan Party or a Subsidiary of a
Loan Party comprising Earn Out Obligations not in excess of $250,000,000 in the
aggregate at any one time outstanding; provided that after the Agent has
received a certificate in the form of Exhibit 7.3.3 demonstrating that the
Leverage Ratio is equal to or less than 3.00 to 1.00 and the Interest Coverage
Ratio is equal to or greater than 3.00 to 1.00, such amount shall be increased
to $375,000,000 for so long as the Leverage Ratio is equal to or less than 3.00
to 1.00 and the Interest Coverage Ratio is equal to or greater than 3.00 to
1.00;"

            I. Section 7.2.3 [Guaranties] of the Credit Agreement is hereby
amended by deleting clause (iii) in its entirety and inserting in lieu thereof
the following:

            (iii) Guaranties of Indebtedness permitted under Section 7.2.1(iii)
and (v).

            J. Section 7.2.13 [Maximum Leverage Ratio] of the Credit Agreement
is hereby amended by deleting such section in its entirety and inserting in lieu
thereof the following:

            The Loan Parties shall not at any time permit the Leverage Ratio to
exceed the ratios set forth below for the periods set forth below:

<TABLE>
<CAPTION>
            Period                          Ratio
<S>                                      <C>
April 2, 2000 - July 1, 2000             4.00 to 1.00
July 2, 2000 - September 30, 2000        4.00 to 1.00
October 1, 2000 - December 30, 2000      3.75 to 1.00
December 31, 2000 - March 31, 2001       4.00 to 1.00
April 1, 2001 - June 30, 2001            3.50 to 1.00
July 1, 2001 - September 29, 2001        3.25 to 1.00
September 30, 2001 and thereafter        3.00 to 1.00
</TABLE>

            K. Section 7.2.14 [Minimum Interest Coverage Ratio] of the Credit
Agreement is hereby amended by deleting such section in its entirety and
inserting in lieu thereof the following:

                                      -3-
<PAGE>   4

            The Loan Parties shall not permit the Interest Coverage Ratio to be
less than the ratios set forth below for the periods set forth below:

<TABLE>
<CAPTION>
Period                                      Ratio
<S>                                      <C>
April 2, 2000 - July 1, 2000             2.00 to 1.00
July 2, 2000 - September 30, 2000        1.75 to 1.00
October 1, 2000 - December 30, 2000      1.75 to 1.00
December 31, 2000 - March 31, 2001       2.00 to 1.00
April 1, 2001 - June 30, 2001            2.375 to 1.00
July 1, 2001 - September 29, 2001        2.75 to 1.00
September 30, 2001 and thereafter        3.00 to 1.00
</TABLE>

            L. Schedule 1.1(A) [Pricing Grid] of the Credit Agreement is hereby
deleted in its entirety and Schedule 1.1(A) attached hereto is inserted in lieu
thereof.

            M. Schedule 1.1(B) [Commitment of Banks and Addresses for Notices]
of the Credit Agreement is hereby deleted in its entirety and Schedule 1.1(B)
attached hereto is inserted in lieu thereof.

            N. Exhibit 7.3.3 [Quarterly Compliance Certificate] of the Credit
Agreement is hereby deleted in its entirety and Exhibit 7.3.3 attached hereto is
inserted in lieu thereof.

            3. Conditions of Effectiveness of this Agreement.

      The effectiveness of this Amendment No. 5 is expressly conditioned upon
satisfaction of each of the following conditions precedent:

      (a) Representations and Warranties; No Defaults. The representations and
warranties of the Loan Parties contained in Section 5 of the Credit Agreement
shall be true and accurate on the date hereof with the same effect as though
such representations and warranties had been made on and as of such date (except
representations and warranties which relate solely to an earlier date or time,
which representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein); the Loan Parties shall have
performed and complied with all covenants and conditions of the Credit
Agreement; and no Event of Default or Potential Default under the Credit
Agreement shall have occurred and be continuing or shall exist.

      (b) Counterparts. The Agent shall have received counterparts of this
Amendment No. 5 duly executed by the Borrower and the Required Banks, and the
Agent shall have received replacement Notes reflecting the revised Schedule
1.1(B) attached hereto and all such other counterpart originals or certified or
other copies of such documents and proceedings in connection with such
transactions, in form and substance satisfactory to the Agent. This Amendment
No. 5 may be executed by the parties hereto in any number of separate
counterparts, each of which when taken together and duly executed and delivered
shall together constitute one and the same instrument.

      (c) Borrower Certificate. The Agent shall have received a certificate
signed by the Secretary or Assistant Secretary of the Borrower certifying as to
all action taken by the Borrower to authorize the execution, delivery and
performance of this Amendment No. 5.

      (d) Amendment Fee. The Borrower shall pay or cause to be paid to the Agent
for the account of the Banks an amendment fee (the "Amendment Fee") payable to
those Banks which approve this Amendment No. 5 on or before 5:00pm (Pittsburgh,
Pennsylvania time) on June 19, 2000 in the amount of the product

                                      -4-
<PAGE>   5

of 15 basis points multiplied by the amount of such Bank's Commitment.

      4. Force and Effect. Except as expressly modified by this Amendment, the
Credit Agreement and the other Loan Documents are hereby ratified and confirmed
and shall remain in full force and effect on and after the date hereof.

      5. Governing Law. This Amendment No. 5 shall be deemed to be a contract
under the laws of the Commonwealth of Pennsylvania and for all purposes shall be
governed by and construed and enforced in accordance with the internal laws of
the Commonwealth of Pennsylvania without regard to its conflict of laws
principles.

      6. Fees and Expenses. The Borrower hereby agrees to reimburse the Agent
and the Banks on demand for all legal costs, expenses and disbursements relating
to this Amendment No. 5 which are payable by the Borrower as provided in
Sections 9.5 and 10.3 of the Credit Agreement.

                            [SIGNATURE PAGE FOLLOWS]

                                      -5-
<PAGE>   6

         [SIGNATURE PAGE 1 OF 4 OF AMENDMENT NO. 5 TO CREDIT AGREEMENT]

      IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this Agreement as of the day and year first above
written.

                                 [BORROWER]
ATTEST:                                   CHAMPION ENTERPRISES, INC.

                                          By:
                                          Name: Joseph H. Stegmayer
                                          Title: Executive Vice President
[Seal]

                                [GUARANTORS]
ATTEST:                                   EACH GUARANTOR LISTED ON SCHEDULE 1
HERETO

                                          By:
                                          Name: Joseph H. Stegmayer
                                          Title: Chief Financial Office of
                                          each Guarantor listed on Schedule 1
[Seal]

                                      -6-
<PAGE>   7

         [SIGNATURE PAGE 2 OF 4 OF AMENDMENT NO. 5 TO CREDIT AGREEMENT]

                               [BANKS AND AGENTS]
                                     PNC BANK, NATIONAL ASSOCIATION,
                                     individually and as Administrative Agent

                                     By:
                                     Name:
                                     Title:

                                     BANK ONE, N.A., individually and as
                                     Syndication Agent

                                     By:
                                     Name:
                                     Title:

                                     COMERICA BANK, individually and as
                                     Documentation Agent

                                     By:
                                     Name:
                                     Title:

                                     NATIONAL CITY BANK, individually and
                                     as Co-Agent

                                     By:
                                     Name:
                                     Title:

                                     HARRIS TRUST AND SAVINGS BANK,
                                     individually and as Co-Agent

                                     By:
                                     Name:
                                     Title:

                                      -7-
<PAGE>   8

         [SIGNATURE PAGE 3 OF 4 OF AMENDMENT NO. 5 TO CREDIT AGREEMENT]

                                          KEYBANK NATIONAL ASSOCIATION,
                                          individually and as Co-Agent

                                          By:
                                          Name:
                                          Title:

                                          BANK OF AMERICA, N.A., individually
                                          and as Co-Agent

                                          By:
                                          Name:
                                          Title:

                                          WACHOVIA BANK, N.A., individually
                                          and as Co-Agent

                                          By:
                                          Name:
                                          Title:

                                          STANDARD FEDERAL BANK

                                          By:
                                          Name:
                                          Title:

                                          THE BANK OF TOKYO-MITSUBISHI, LTD.,
                                          CHICAGO BRANCH
                                          By:
                                          Name:
                                          Title:

                                      -8-
<PAGE>   9

         [SIGNATURE PAGE 4 OF 4 OF AMENDMENT NO. 5 TO CREDIT AGREEMENT]

                                          MICHIGAN NATIONAL BANK
                                          By:
                                          Name:
                                          Title:

                                          THE BANK OF NOVA SCOTIA
                                          By:
                                          Name:
                                          Title:

                                          HIBERNIA NATIONAL BANK

                                          By:
                                          Name:
                                          Title:

                                          CREDIT SUISSE FIRST BOSTON
                                          By:
                                          Name:
                                          Title:

                                          By:
                                          Name:
                                          Title:

                                      -9-
<PAGE>   10

                                   SCHEDULE 1
                                       TO
             AMENDMENT NO. 5 TO CREDIT AGREEMENT DATED JUNE 15, 2000

                                  [GUARANTORS]

A-1 HOMES GROUP, INC., a Michigan corporation
ACCENT MOBILE HOMES, INC., a North Carolina corporation
ALPINE HOMES, INC., a Colorado corporation
AMERICAN TRANSPORT, INC., a Nevada corporation
ART RICHTER INSURANCE, INC., a Kentucky corporation
AUBURN CHAMP, INC., a Michigan corporation
BRYAN MOBILE HOMES, INC., a Texas corporation
BUILDERS CREDIT CORPORATION, a Michigan corporation
CAC FUNDING CORPORATION, a Michigan corporation
CAL-NEL, INC., a Texas corporation
CARE FREE HOMES, INC., a Michigan corporation (applied for)
CHI, INC., A Kansas corporation
CENTRAL MISSISSIPPI MANUFACTURED HOUSING, INC., a Mississippi corporation
CHAMPION FINANCIAL CORPORATION, a Michigan corporation
CHAMPION HOME BUILDERS CO., a Michigan corporation
CHAMPION RETAIL, INC., a Michigan corporation
CHAMPION HOME COMMUNITIES, INC., a Michigan corporation
CHAMPION MOTOR COACH, INC., a Michigan corporation
CHANDELEUR HOMES, INC., a Michigan corporation
CLIFF AVE. INVESTMENTS, INC., a South Dakota corporation
COLONIAL HOUSING, INC., a Texas corporation
COUNTRY ESTATE HOMES, INC., an Oklahoma corporation
COUNTRYSIDE HOMES, INC., a North Dakota corporation (applied for)
CREST RIDGE HOMES, INC., a Michigan corporation
CRESTPOINTE FINANCIAL SERVICES, INC., a Delaware corporation
DUTCH HOUSING, INC., a Michigan corporation
FACTORY HOMES OUTLET, INC., an Idaho corporation
FLEMING COUNTY INDUSTRIES, INC., a Kentucky corporation
GATEWAY ACCEPTANCE CORP., a South Dakota corporation
GATEWAY MOBILE & MODULAR HOMES, INC., a Nebraska corporation
GATEWAY PROPERTIES CORP., a South Dakota corporation
GEM HOMES, INC., a Delaware corporation
GRAND MANOR, INC., a Michigan corporation
HEARTLAND HOMES, INC., a Texas corporation
HOMEPRIDE FINANCE CORP., a Michigan corporation
HOMES AMERICA FINANCE, INC., a Nevada corporation
HOMES AMERICA OF ARIZONA, INC., an Arizona corporation
HOMES AMERICA OF CALIFORNIA, INC., a California corporation
HOMES AMERICA OF OKLAHOMA, INC., an Oklahoma corporation
HOMES AMERICA OF UTAH, INC., a Utah corporation
HOMES AMERICA OF WYOMING, INC., a Wyoming corporation
HOMES AMERICA, INC., a Michigan corporation
HOMES OF LEGEND, INC., a Michigan corporation
HOMES OF MERIT, INC., a Florida corporation
I.D.A., INC., an Oklahoma corporation
IMPERIAL HOUSING, INC., a Texas corporation
INVESTMENT HOUSING, INC., a Texas corporation
ISEMAN CORP., a South Dakota corporation
JASPER MOBILE HOMES, INC., a Texas corporation
LAKE COUNTRY LIVING, INC., a Texas corporation
LAMPLIGHTER HOMES, INC., a Washington corporation
LAMPLIGHTER HOMES (OREGON), INC., an Oregon corporation
M&J SOUTHWEST DEVELOPMENT CORP., a Texas corporation
MANUFACTURED HOUSING OF LOUISIANA, INC., a Michigan corporation

                                      -10-
<PAGE>   11

MOBILE FACTORY OUTLET, INC., a Texas corporation
MODULINE INTERNATIONAL, INC., a Washington corporation
NORTHSTAR CORPORATION, a South Dakota corporation
PHILADELPHIA HOUSING CENTER, INC., a Mississippi corporation
PRAIRIE RIDGE, INC., a Kansas corporation
PREMIER HOUSING, INC., a Texas corporation
REDMAN BUSINESS TRUST, a Delaware business trust
REDMAN HOMES MANAGEMENT COMPANY, INC., a Delaware corporation
REDMAN HOMES, INC., a Delaware corporation
REDMAN INDUSTRIES, INC., a Delaware corporation
REDMAN INVESTMENT, INC., a Delaware corporation
REDMAN MANAGEMENT SERVICES BUSINESS TRUST, a Delaware business trust
REDMAN RETAIL, INC., a Delaware corporation
REGENCY SUPPLY COMPANY, INC., a Delaware corporation
SAN JOSE ADVANTAGE HOMES, a California corporation
SERVICE CONTRACT CORPORATION, a Michigan corporation
SOUTHERN SHOWCASE FINANCE, INC., a Michigan corporation
SOUTHERN SHOWCASE HOUSING, INC., a North Carolina corporation
STAR FLEET, INC., an Indiana corporation
THE OKAHUMPKA CORPORATION, a Florida corporation
THOMAS HOMES OF AUSTIN, INC., a Texas corporation
THOMAS HOMES OF BUDA, INC., a Texas corporation
THOMAS HOMES OF TEXAS, INC., a Texas corporation
TOM TERRY ENTERPRISES, INC., a Nevada corporation
TRADING POST MOBILE HOMES, INC., a Kentucky corporation
USA MOBILE HOMES, INC., an Oregon corporation
VICTORY INVESTMENT CO., an Oklahoma corporation
VIDOR MOBILE HOME CENTER, INC., a Texas corporation
WESTERN HOMES CORPORATION, a Delaware corporation
WHITWORTH MANAGEMENT, INC., a Nevada corporation
WRIGHT'S MOBILE HOMES, INC., a Texas corporation

                                      -11-
<PAGE>   12

                                 SCHEDULE 1.1(A)

                                  PRICING GRID

<TABLE>
<CAPTION>
Level  Leverage Ratio          Facility   Letter of    Base Rate   Euro_Rate
                                Fee (%)   Credit Fee   Spread (%)  Spread (%)
                                            (%)
<S>                             <C>        <C>          <C>         <C>
I     Less than or equal to      .15        .575           0          .575
      1.0 to 1.0

II    Greater than 1.0 to 1.0    .175       .675           0          .675
      but less than or equal
      to 1.5 to 1.0

III   Greater than 1.5 to 1.0    .20        .75            0          .75
      but less than or equal
      to 2.0 to 1.0

IV    Greater than 2.0 to 1.0    .225       .875           0          .875
      but less than or equal
      to 1.0

V     Greater than 2.5 to 1.0    .25        1.00           0          1.00
      but less than or equal
      to 3.0 to 1.0

VI    Greater than 3.0 to 1.0    .375       1.625          0          1.625
      but less than or equal
      to 3.5 to 1.0

VII   Greater than 3.5 to 1.0    .50        2.00           0          2.00
</TABLE>

The Applicable Margin, the Applicable Facility Fee Rate and the Letter of Credit
Fee shall be adjusted, and any increase or decrease therein shall become
effective on the due date for the delivery of each Compliance Certificate, based
on the Leverage Ratio to be computed in such Compliance Certificate.

                                      -12-
<PAGE>   13

                                 SCHEDULE 1.1(B)

                 COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES

                                   Page 1 of 7

Part 1 - Commitments of Banks and Addresses for Notices to Banks

<TABLE>
<CAPTION>
Bank                                        Amount of
                                         Revolving Credit
                                            Commitment        Ratable Share
<S>                                      <C>                  <C>
Name:  PNC Bank, National Association
Address:  One S. Wacker Drive, Ste. 2980
Chicago, IL  60606
Attention:  Peter Stack
Telephone:  (312) 338-5626
Telecopy:   (312) 338-5620                  $9,230,710           9.2307%

Name:  Comerica Bank
Address:  500 Woodward Avenue
Detroit, MI  48226
Attention:  Robert M. Porterfield
Telephone:  (313) 222-9712
Telecopy:   (313) 222-9514                  $9,230,710           9.2307%

Name: Bank One, N.A.
Address:  611 Woodward Avenue, 2nd Floor
Detroit, MI  48226
Attention:  Thomas Gamm
Telephone:  (313) 225-2531
Telecopy:   (313) 225-2290                  $13,538,413          13.5384%

Name:  National City Bank
Address:  1001 South Worth Street
Birmingham, MI  48009
Attention:  Carolann Morykwas
Telephone:  (248) 901-2110
Telecopy:   (248) 901-2033                  $7,692,308           7.6923%
</TABLE>

                                      -13-
<PAGE>   14

                                 SCHEDULE 1.1(B)
                                   (Continued)

                                   Page 2 of 7

Part 1 - Commitments of Banks and Addresses for Notices to Banks

<TABLE>
<CAPTION>
Bank                                                Amount of
                                                 Revolving Credit
                                                   Commitment        Ratable Share
<S>                                              <C>                 <C>
Name:  Harris Trust and Savings Bank
Address:  111 West Monroe Street
Chicago, IL  60603
Attention:  Kirby M. Law
Telephone:  (312) 461-2735
Telecopy:   (312) 461-5225                        $7,692,308           7.6923%

Name:  KeyBank National Association
Address:  127 Public Square
Cleveland, OH  44114-1306
Attention:  J.T. Taylor
Telephone:  (216) 689-3589
Telecopy:   (216) 689-4981                        $7,692,308           7.6923%

Name:  Bank of America, N.A.
Address:  233 S. Wacker Drive, Ste. 2800
Chicago, IL  60606-6308
Attention:  Robert K. Allendorf
Telephone:  (312) 234-5622
Telecopy:   (312) 234-5601                        $7,692,308           7.6923%

Name:  Wachovia Bank, N.A.
Address:  181 Peachtree Street N.E., 28th Floor
Atlanta, GA  30303
Attention:  Katie S. Proctor
Telephone:  (404) 332-4036
Telecopy:   (404) 332-6898                        $7,692,308           7.6923%
</TABLE>

                                      -14-
<PAGE>   15

                                 SCHEDULE 1.1(B)
                                   (Continued)

                                   Page 3 of 7

Part 1 - Commitments of Banks and Addresses for Notices to Banks

<TABLE>
<CAPTION>
Bank                                        Amount of
                                         Revolving Credit
                                            Commitment        Ratable Share
<S>                                         <C>                  <C>
Name:  Standard Federal Bank
Address:  2600 West Big Beaver, 4th Fl
Troy, MI  48084
Attention:  Dorian Smith
Telephone:  (248) 816-4853
Telecopy:   (248) 637-5003                  $5,538,505           5.5385%

Name:  The Bank of Tokyo-Mitsubishi, Ltd.,
       Chicago Branch
Address:  227 W. Monroe St, Ste. 2300
Chicago, IL  60606
Attention:  Erich A. Friess
Telephone:  (312) 696-4654
Telecopy:   (312) 696-4535                  $5,538,505           5.5385%

Name:  Michigan National Bank
Address:  27777 Inkster Road
Farmington Hills, MI  48334
Attention:  Neran Shaya
Telephone:  (248) 473-4212
Telecopy:   (248) 473-4345                  $5,538,505           5.5385%

Name:  The Bank of Nova Scotia
Address:  181 W. Madison St., Ste. 3700
Chicago, IL  60602
Attention:  Thomas P. Myhre
Telephone:  (312) 201-4186
Telecopy:   (312) 201-4108                  $4,307,704           4.3077%
</TABLE>

                                      -15-
<PAGE>   16

                                SCHEDULE 1.1(B)
                                 (Continued)

                                 Page 4 of 7

Part 1 - Commitments of Banks and Addresses for Notices to Banks

<TABLE>
<CAPTION>
Bank                                        Amount of
                                         Revolving Credit
                                            Commitment        Ratable Share
<S>                                      <C>                  <C>
Name:  Hibernia National Bank
Address:  313 Carondelet Street, 12th Fl
New Orleans, LA  70130
Attention:  Lloyd Drumm
Telephone:  (504) 533-2263
Telecopy:   (504) 533-5344                  $4,307,704           4.3077%

Name:  Credit Suisse First Boston
Address:  11 Madison Avenue
New York, NY  10010-3629
Attention:  David Kratovil
Telephone:  (212) 325-9155
Telecopy:   (212) 325-8615                  $4,307,704           4.3077%

         Total                            $100,000,000             100%
</TABLE>

                                      -16-
<PAGE>   17

                                 SCHEDULE 1.1(B)

                 COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES

                                   Page 5 of 7

Part 2 - Addresses for Notices to Borrower and Guarantors:

AGENT

Name:  PNC Bank, National Association
Address:  One South Wacker Drive
Chicago, IL  60606
Attention:  Peter Stack
Telephone:  (312) 338-5626
Telecopy:   (312) 338-5620

BORROWER AND GUARANTORS:

Name(s): CHAMPION ENTERPRISES, INC.
         A-1 HOMES GROUP, INC., a Michigan corporation
         ACCENT MOBILE HOMES, INC., a North Carolina corporation
         ALPINE HOMES, INC., a Colorado corporation
         AMERICAN TRANSPORT, INC., a Nevada corporation
         ART RICHTER INSURANCE, INC., a Kentucky corporation
         AUBURN CHAMP, INC., a Michigan corporation
         BRYAN MOBILE HOMES, INC., a Texas corporation
         BUILDERS CREDIT CORPORATION, a Michigan corporation
         CAC FUNDING CORPORATION, a Michigan corporation
         CAL-NEL, INC., a Texas corporation
         CARE FREE HOMES, INC., a Michigan corporation (applied for)
         CHI, INC., A Kansas corporation
         CENTRAL MISSISSIPPI MANUFACTURED HOUSING, INC., a Mississippi
corporation
         CHAMPION FINANCIAL CORPORATION, a Michigan corporation
         CHAMPION HOME BUILDERS CO., a Michigan corporation
         CHAMPION RETAIL, INC., a Michigan corporation
         CHAMPION HOME COMMUNITIES, INC., a Michigan corporation
         CHAMPION MOTOR COACH, INC., a Michigan corporation
         CHANDELEUR HOMES, INC., a Michigan corporation
         CLIFF AVE. INVESTMENTS, INC., a South Dakota corporation
         COLONIAL HOUSING, INC., a Texas corporation

                                      -17-
<PAGE>   18

                                SCHEDULE 1.1(B)

                 COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES

                                  Page 6 of 7

         COUNTRY ESTATE HOMES, INC., an Oklahoma corporation
         COUNTRYSIDE HOMES, INC., a North Dakota corporation (applied for)
         CREST RIDGE HOMES, INC., a Michigan corporation
         CRESTPOINTE FINANCIAL SERVICES, INC., a Delaware corporation
         DUTCH HOUSING, INC., a Michigan corporation
         FACTORY HOMES OUTLET, INC., an Idaho corporation
         FLEMING COUNTY INDUSTRIES, INC., a Kentucky corporation
         GATEWAY ACCEPTANCE CORP., a South Dakota corporation
         GATEWAY MOBILE & MODULAR HOMES, INC., a Nebraska corporation
         GATEWAY PROPERTIES CORP., a South Dakota corporation
         GEM HOMES, INC., a Delaware corporation
         GRAND MANOR, INC., a Michigan corporation
         HEARTLAND HOMES, INC., a Texas corporation
         HOMEPRIDE FINANCE CORP., a Michigan corporation
         HOMES AMERICA FINANCE, INC., a Nevada corporation
         HOMES AMERICA OF ARIZONA, INC., an Arizona corporation
         HOMES AMERICA OF CALIFORNIA, INC., a California corporation
         HOMES AMERICA OF OKLAHOMA, INC., an Oklahoma corporation
         HOMES AMERICA OF UTAH, INC., a Utah corporation
         HOMES AMERICA OF WYOMING, INC., a Wyoming corporation
         HOMES AMERICA, INC., a Michigan corporation
         HOMES OF LEGEND, INC., a Michigan corporation
         HOMES OF MERIT, INC., a Florida corporation
         I.D.A., INC., an Oklahoma corporation
         IMPERIAL HOUSING, INC., a Texas corporation
         INVESTMENT HOUSING, INC., a Texas corporation
         ISEMAN CORP., a South Dakota corporation
         JASPER MOBILE HOMES, INC., a Texas corporation
         LAKE COUNTRY LIVING, INC., a Texas corporation
         LAMPLIGHTER HOMES, INC., a Washington corporation
         LAMPLIGHTER HOMES (OREGON), INC., an Oregon corporation
         M&J SOUTHWEST DEVELOPMENT CORP., a Texas corporation
         MANUFACTURED HOUSING OF LOUISIANA, INC., a Michigan corporation
         MOBILE FACTORY OUTLET, INC., a Texas corporation
         MODULINE INTERNATIONAL, INC., a Washington corporation
         NORTHSTAR CORPORATION, a South Dakota corporation
         PHILADELPHIA HOUSING CENTER, INC., a Mississippi corporation

                                      -18-
<PAGE>   19

                                 SCHEDULE 1.1(B)

                 COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES

                                   Page 7 of 7

         PRAIRIE RIDGE, INC., a Kansas corporation
         PREMIER HOUSING, INC., a Texas corporation
         REDMAN BUSINESS TRUST, a Delaware business trust
         REDMAN HOMES MANAGEMENT COMPANY, INC., a Delaware corporation
         REDMAN HOMES, INC., a Delaware corporation
         REDMAN INDUSTRIES, INC., a Delaware corporation
         REDMAN INVESTMENT, INC., a Delaware corporation
         REDMAN MANAGEMENT SERVICES BUSINESS TRUST, a Delaware business trust
         REDMAN RETAIL, INC., a Delaware corporation
         REGENCY SUPPLY COMPANY, INC., a Delaware corporation
         SAN JOSE ADVANTAGE HOMES, a California corporation
         SERVICE CONTRACT CORPORATION, a Michigan corporation
         SOUTHERN SHOWCASE FINANCE, INC., a Michigan corporation
         SOUTHERN SHOWCASE HOUSING, INC., a North Carolina corporation
         STAR FLEET, INC., an Indiana corporation
         THE OKAHUMPKA CORPORATION, a Florida corporation
         THOMAS HOMES OF AUSTIN, INC., a Texas corporation
         THOMAS HOMES OF BUDA, INC., a Texas corporation
         THOMAS HOMES OF TEXAS, INC., a Texas corporation
         TOM TERRY ENTERPRISES, INC., a Nevada corporation
         TRADING POST MOBILE HOMES, INC., a Kentucky corporation
         USA MOBILE HOMES, INC., an Oregon corporation
         VICTORY INVESTMENT CO., an Oklahoma corporation
         VIDOR MOBILE HOME CENTER, INC., a Texas corporation
         WESTERN HOMES CORPORATION, a Delaware corporation
         WHITWORTH MANAGEMENT, INC., a Nevada corporation
         WRIGHT'S MOBILE HOMES, INC., a Texas corporation
Address:  2701 University Drive, Suite 300
Auburn Hills, MI  48326
Attention:  Treasurer
With a copy to:  John J. Collins, Jr., Esq.
Telephone:  (248) 340-7717
Telecopy:   (248) 340-9345

                                      -19-
<PAGE>   20

                                  EXHIBIT 7.3.3

                                     form of

                        QUARTERLY COMPLIANCE CERTIFICATE

                                      , 200

PNC Bank, National Association, as Agent
One PNC Plaza
22nd Floor
Pittsburgh, PA 15222
Attn:  Arlene Ohler

Telephone No.:  (412) 762-3627
Telecopier No.: (412) 762-8672

Ladies and Gentlemen:

         I refer to the Credit Agreement dated as of May 5, 1998, by and among
Champion Enterprises, Inc. (the "Borrower"), the Guarantors party thereto, the
Banks party thereto and PNC Bank, National Association, in its capacity as
administrative agent for the Banks (the "Agent") (as amended, supplemented or
modified from time to time, the "Credit Agreement"). Unless otherwise defined
herein, terms defined in the Credit Agreement are used herein with the same
meanings.

         I,            , [President/Chief Executive Officer/Chief Financial
Officer] of the Borrower, do hereby certify on behalf of the Borrower as of the
[quarter/year ended              , 200 ] (the "Report Date"), as follows:

      (1) Maximum Leverage Ratio (Section 7.2.13). The ratio of (A) Consolidated
Debt as of the Report Date to (B) Consolidated Cash Flow From Operations for the
applicable four (4) fiscal quarters ending as of the Report Date is to 1.00
which is not more than 4.00 to 1.00 for the quarters ending July 1, 2000,
September 30, 2000 and March 31, 2001, 3.75 to 1.00 for the quarter ending
December 30, 2000, 3.50 to 1.00 for the quarter ending June 30, 2001, 3.25 to
1.00 for the quarter ending September 29, 2001 and 3.00 to 1.00 for the quarters
ending thereafter, as shown below:

            (A) Consolidated Debt as of the Report Date (in each case, for the
Borrower and its Subsidiaries (other than Champion Development and any
Subsidiary of Champion Development) determined and consolidated in accordance
with GAAP):

                  (i)    borrowed money (including money borrowed
                         under the Credit Agreement)                       $

                  (ii)   amounts raised under or liabilities in
                         respect of any note purchase or acceptance
                         credit facility                                   $

                  (iii)  Reimbursement obligations (contingent or

                         otherwise) under any letter of credit,

                                      -20-
<PAGE>   21

                         currency swap agreement, and interest rate swap, cap,
                         collar or floor agreement or other interest rate
                         management device                                 $

                  (iv)   other transactions (including forward sale
                         or purchase agreements, capitalized leases,
                         conditional sales agreements and other
                         purchase agreements with deferred or
                         contingent consideration) having the
                         commercial effect of a borrowing of money
                         entered into by the Borrower or its
                         Subsidiaries (other than Champion
                         Development and any Subsidiary of
                         Champion Development) to finance its
                         operations or capital requirements
                         (but not including trade payables and
                         accrued expenses incurred in the
                         ordinary course of business which
                         are not represented by a promissory
                         note or other evidence of indebtedness
                         and which are not more that thirty (30)
                         days past due)                                    $

                  (v)    Repurchase Obligations                            $

                  (vi)   Earn Out Obligations                              $

                  (vii)  Floor-Plan Financing Obligations                  $

                  (viii) any Guaranty of Indebtedness for
                         borrowed money                                    $

                  (ix)   Sum of items (i) - (viii) equals
                         consolidated Indebtedness of the Borrower
                         and its Subsidiaries (other than Champion
                         Development and any Subsidiary of Champion
                         Development)                                      $

                  (x)    Cash on the balance sheet in excess of
                         $20,000,000                                       $

                  (xi)   the sum of  items (v), (vi) and (x) above         $

                  (xii)  Item (ix) reduced by item (xi) equals the
                         Consolidated Debt                                 $

            (B)   Consolidated Cash Flow from Operations for the four
                  (4) fiscal quarters ending as of the Report Date is
                  computed as follows, in each case for the Borrower
                  and its Subsidiaries determined and consolidated in
                  accordance with GAAP:

                  (i)    net income                                        $

                  (ii)   depreciation                                      $

                  (iii)  amortization                                      $

                  (iv)   interest expense                                  $

                                      -21-
<PAGE>   22

                  (v)    income tax expense                                $

                  (vi)   the $33,600,000 special charge booked by the
                         Borrower in the third quarter of 1999 in
                         connection with the bankruptcy of independent
                         home retailer, Ted Parker Home Sales, Inc.        $

                  (vii)  costs incurred for up to four (4) plant
                         closings between April 2, 2000 and September
                         30, 2001 provided such costs shall not exceed
                         $2,000,000 per plant closing $

                  (viii) sum of items (i) - (vii)                          $

                  (ix)   non-cash credits to net income                    $

                  (x)    gains on the disposition of asset to the
                         extent included in net income but not
                         included in operating income                      $

                  (xi)   item (viii) reduced by items (ix) and (x)
                         equals Consolidated Cash Flow from
                         Operations                                        $

            (C)   Ratio of item (A)(xii) to item (B)(xi) equals the
                  Leverage Ratio                                        to 1.0

      (2)   Facility Fee; Revolving Credit Base Rate Options; and Revolving
Credit Euro Rate Options (Sections 2.3, 3.1.1(i) and (ii)).

            (A)    Borrower's Leverage Ratio is       to 1.0 computed in item
1(C) above.

            (B)    Leverage Ratio Level applicable to leverage ratio in item
2(A) as follows (check one):

                        Level I    less than or equal to 1.0 to 1.0

                        Level II   greater than 1.0 to 1.0 but less than or
equal to 1.5 to 1.0

                        Level III  greater than 1.5 to 1.0 but less than or
equal to 2.0 to 1.0

                        Level IV   greater than 2.0 to 1.0 but less than or
equal to 2.5 to 1.0

                        Level V    greater than 2.5 to 1.0 but less than or
equal to 3.0 to 1.0

                        Level VI   greater than 3.0 to 1.0 but less than or
equal to 3.5 to 1.0

                        Level VII  Greater than 3.5 to 1.0

            (C) Section 7.3.3 of the Credit Agreement provides that this

                                      -22-
<PAGE>   23

Certificate is due on    , 2000 (the "Due Date") (45 days after fiscal quarter
end for quarterly Certificates; 90 days after year end for annual Certificates).

            (D) Based on the Leverage Ratio Level above, the amount of the
Facility Fee, Letter of Credit Fee, Base Rate Spread, and Euro-Rate Spread, on
and after the Due Date shall be as follows (Insert applicable % in blanks below.
See 2.3, 3.1.1(i) and (ii) of the Credit Agreement):

<TABLE>
<CAPTION>

                                                 RATE
                               I     II     III     IV     V      VI     VII
<S>                     <C>  <C>    <C>    <C>    <C>    <C>    <C>    <C>
Facility Fee             %   .150%  .175%  .200%  .225%  .250%  .375%   .50%
Letter of Credit Fee     %   .575%  .675%  .75%   .875%   1.0%  1.625%  2.00%
Base Rate Spread         %     0%     0%     0%     0%     0%     0%      0%
Euro-Rate Spread         %   .575%  .675%  .75%   .875%   1.00% 1.625%  2.00%
</TABLE>

      (3) Minimum Interest Coverage Ratio (Section 7.2.14). The ratio of (A)
EBIT to (B) consolidated interest expense of the Borrower and its Subsidiaries,
calculated as of the end of each fiscal quarter for the four (4) fiscal quarters
ending as of the Report Date is to 1.0, which is not less than 2.00 to 1.00 for
the quarters ending July 1, 2000 and March 31, 2001, 1.75 to 1.00 for the
quarters ending September 30, 2000 and December 30, 2000, 2.375 to 1.00 for the
quarter ending June 30, 2001, 2.75 to 1.00 for the quarter ending September 29,
2001 and 3.00 to 1.00 for the quarters ending thereafter. Such ratio is computed
as follows:

            (A) EBIT, for applicable period ending as of the Report Date, and in
each case for the Borrower and its Subsidiaries determined and consolidated in
accordance with GAAP is calculated as follows:

                  (i)    net income                                        $

                  (ii)   interest expense                                  $

                  (iii)  income tax expense                                $

                  (iv)   the $33,600,000 special charge booked by the
                         Borrower in the third quarter of 1999 in
                         connection with the bankruptcy of independent
                         home retailer, Ted Parker Home Sales, Inc.        $

                  (v)    costs incurred for up to four (4) plant
                         closings between April 2, 2000 and September
                         30, 2001 provided such costs shall not exceed
                         $2,000,000 per plant closing                      $

                  (vi)   sum of items (i) - (v) equals EBIT                $

           (B)    Interest expense, for the applicable period ending as
                  of the Report Date for the Borrower and its
                  Subsidiaries determined and consolidated in accordance
                  with GAAP:                                               $

           (C)    Ratio of Item (A)(vi) to Item (B) equals Interest
                  Coverage Ratio                                        to 1.0

                                      -23-
<PAGE>   24

      (4)   Minimum Net Worth (Section 7.2.15).

            The Consolidated Net Worth is $                as of the Report
Date, which amount is not less than $               , the Base Net Worth.
The foregoing is computed as follows:

           (A)    Consolidated Net Worth as of the Report Date:

                  (i)    total stockholders' equity of Borrower
                         and its Subsidiaries on the Report Date
                         determined and consolidated in
                         accordance with GAAP is                           $

           (B)    Base Net Worth on the Report Date:
                  (i)    consolidated net income of the Borrower and its
                         Subsidiaries for each fiscal quarter in which
                         net income was earned (as opposed to a net
                         loss) during the period from April 2, 2000
                         through the Report Date                           $

                  (ii)   Item (i) x 50% =                                  $

                  (iii)  100% of the proceeds received by the
                         Borrower or any of its Subsidiaries after
                         the Closing Date resulting from the
                         issuance of capital stock of the Borrower
                         or any of its Subsidiaries (other than
                         proceeds received from the exercise of
                         stock options by employees of the
                         Borrower), net of any fees and expenses
                         incurred by the Borrower or any of its
                         Subsidiaries in connection with such sale         $
                  (iv)   Result in item (ii) plus item (iii) plus
                         $378,000,000 equals the Base Net Worth            $

      (5)   Indebtedness (Section 7.2.1)

            (A)   Indebtedness of a Loan Party or Subsidiary of
                  a Loan Party (other than Champion Development
                  and any Subsidiary of Champion Development)
                  for Floor-Plan Financing Obligations which
                  are unsecured or secured by Purchase Money
                  Security Interests, provided that the aggregate
                  amount of all such Indebtedness at any one time
                  outstanding shall not exceed the amounts set forth
                  below for the periods set forth below:                   $

<TABLE>
<CAPTION>
                  Period                            Amount
                  <S>                             <C>
                  Closing Date - Dec. 31, 1998    $200,000,000
                  Jan. 1, 1999 - Dec. 31, 1999    $250,000,000
                  Jan. 1, 2000 - Dec. 31, 2000    $350,000,000
                  Jan. 1, 2001 - Dec. 31, 2001    $425,000,000
                  Jan. 1, 2002 - and thereafter   $500,000,000;
</TABLE>

            (B)   total amount of Indebtedness of the Loan Parties
                  and their Subsidiaries (other than Champion

                                      -24-
<PAGE>   25

                  Development and any Subsidiary of Champion
                  Development) secured by Purchase Money Security
                  Interests or mortgage liens and Indebtedness
                  evidenced by capitalized leases (may not exceed
                  $20,000,000 in the aggregate at any one time)            $

            (C)   Unsecured Indebtedness of a Loan Party or a
                  Subsidiary of a Loan Party (other than Champion
                  Development and any Subsidiary of Champion
                  Development) comprising Earn Out Obligations
                  (may not exceed $250,000,000 in the aggregate
                  at any one time; provided that after the Leverage
                  Ratio is equal to or less than 3.00 to 1.00 and
                  the Interest Coverage Ratio is equal to or greater
                  than 3.00 to 1.00, such amount may not exceed
                  $375,000,000 so long as the Leverage Ratio is
                  equal to or less than 3.00 to 1.00 and the
                  Interest Coverage Ratio is equal to or greater
                  than 3.00 to 1.00)                                       $

            (D)   Indebtedness of a Loan Party or a Subsidiary of
                  a Loan Party (other than Champion Development and
                  any Subsidiary of Champion Development) under an
                  interest rate swap, cap, collar or floor
                  arrangement or other interest rate management
                  device with any Bank (aggregate notional amount
                  may not exceed (i) with respect to then-outstanding
                  Indebtedness, the sum of interest-bearing
                  indebtedness for borrowed money and interest-bearing
                  Earn Out Obligations and (ii) with respect to future
                  interest-bearing indebtedness for borrowed money
                  anticipated to be incurred within twelve (12) months
                  after the Report Date and otherwise permitted by
                  Section 7.2.1, $100,000,000)                             $

            (E)   Indebtedness (other than set forth in Sections
                  7.2.1 (i) through (viii) of the Credit Agreement)
                  of  the Borrower and its Subsidiaries (other than
                  Champion Development and any Subsidiary of Champion
                  Development) (may not exceed $           which is
                  twelve and one-half percent (12.5%) of the
                  Consolidated Net Worth )                                 $

            (F)   Permitted Unsecured Debt, being Indebtedness of the
                  Borrower and its Subsidiaries (other than Champion
                  Development and any Subsidiary of Champion Development)
                  not in excess of $225,000,000 AND having the following
                  attributes:

                  1)   Revolving Credit Commitments are reduced by
                       each dollar over $200 million of such
                       Indebtedness

                  2)   No Lien on Borrower's or any Subsidiary's
                       assets secures any such Indebtedness

                  3)   Warranties and covenants of such Indebtedness
                       are not less favorable to Borrower or its
                       Subsidiaries than those of Credit Agreement

                                      -25-
<PAGE>   26

                  4)   Draft of agreement(s) governing such Indebtedness
                       provided to Banks at least 7 days prior to
                       closing thereof, and no modifications thereafter
                       without Required Banks approval

                  5)   No principal payments payable until after
                       Expiration Date

                  6)   No Subsidiary which is not a Guarantor may
                       guaranty such Indebtedness                          $

            G.    Aggregate amount of surety or performance bonds
                  of Loan Parties or Subsidiaries (other than
                  Champion Development and any Subsidiary of
                  Champion Development), so long as given in
                  ordinary course of business (and not in excess
                  of $50,000,000 in aggregate)                             $

      (6)   Loan and Investments (Section 7.2.4)

            (A)   loans, advances and investments in wholly-owned
                  Subsidiaries of the Borrower (other than
                  Champion Development and any Subsidiary of
                  Champion Development); provided, however, that
                   loans, advances or investments in Subsidiaries
                  which constitute Retail Finance Companies
                  (holding its loans no longer than 180 days)
                  shall not exceed $           which is 10% of
                  Consolidated Net Worth in the aggregate at any
                  one time outstanding                                     $

            (B)   loans, advances and investments in Subsidiaries
                  of the Borrower (other than Champion Development
                  and any Subsidiary of Champion Development)
                  which are not wholly-owned Subsidiaries;
                  provided, however, that the aggregate of all
                  such loans, advances or investments at any
                  one time outstanding shall not exceed $
                  which is fifteen percent (15%) of Consolidated
                  Net Worth                                                $

            (C)   loans, advances and investments in Affiliates
                  which are not Subsidiaries and which are
                  permitted under Section 7.2.8; provided,
                   however, that the aggregate of all such loans,
                  advances and investments shall not exceed at
                  any one time outstanding $          which is
                  fifteen percent (15%) of Consolidated Net Worth.         $

            (D)   the sum of items (B) and (C) directly above; provided,
                  however, that such sum shall not exceed $ which is
                  twenty percent (20%) of Consolidated Net Worth           $

            (E)   loans (including without limitation commitments
                  to lend), advances and investments in Champion
                  Development and any Subsidiary of Champion

                                      -26-
<PAGE>   27

                  Development; provided, however, that the
                  aggregate of all such loans, advances and
                  investments, together with any disposition of
                  assets to Champion Development and any Subsidiary
                  of Champion Development pursuant to Section
                  7.2.6(iv), shall not exceed in the aggregate at
                  any one time outstanding $           which is
                  fifteen percent (15%) of Consolidated Net Worth          $

            (F)   loans, advances and investments in retail
                  dealers of manufactured homes or other Persons
                  doing business with any Loan Party or Subsidiary
                  of any Loan Party (other than Champion Development
                  and any Subsidiary of Champion Development) shall
                  not exceed in the aggregate at any one time
                  outstanding $10,000,000                                  $

      (7)   Dispositions of Assets or Subsidiaries (Section 7.2.6)
            (A)   sale, transfer or lease of fixed assets,
                  other than those specifically excepted
                  pursuant to clauses 7.2.6 (i) through (iii)
                  of the Credit Agreement (may not exceed $
                  which is 5% of Consolidated Net Worth in the
                  aggregate in any fiscal year and at the time
                  of any disposition, no Event of Default shall
                  exist or result from such disposition)                   $

      (8)   The Loan Parties are in compliance with, and since the
            most recent prior Report Date have at all times complied
            with, all covenants and conditions of the Credit Agreement.

      (9)   The representations and warranties of the Borrower
            contained in Article 6 of the Credit Agreement are true on
            and as of the date of this Certificate with the same effect
            as though such representations and warranties had been made
            on and as of the Report Date (except representations and
            warranties which expressly relate solely to an earlier date
            or time).

      (10)  No event has occurred and is continuing as of the date
            hereof which constitutes an Event of Default or would
            constitute an Event of Default but for the requirement that
            notice be given or time elapse or both.

            IN WITNESS WHEREOF, the undersigned has executed this Certificate
      this        day of          , 200  .

                                     By:
                                           Name:
                                           Title:  [President/Chief Executive
                                           Officer/Chief Financial Officer]

                                  -27-

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