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<CONFORMED-NAME>CHAMPION ENTERPRISES INC
<CIK>0000814068
<ASSIGNED-SIC>2451
<IRS-NUMBER>382743168
<STATE-OF-INCORPORATION>MI
<FISCAL-YEAR-END>1225
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<BUSINESS-ADDRESS>
<STREET1>2701 CAMBRIDGE COURT
<STREET2>STE 300
<CITY>AUBURN HILLS
<STATE>MI
<ZIP>48326
<PHONE>2483409090
</BUSINESS-ADDRESS>
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<STREET1>2701 UNIVERSITY DRIVE
<STREET2>STE 300
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<STATE>MI
<ZIP>48326
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<TYPE>8-K
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<FILENAME>k68735e8-k.txt
<DESCRIPTION>FORM 8-K
<TEXT>
<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549



                                    FORM 8-K



                                 CURRENT REPORT



                       Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934



        Date of Report (Date of earliest event reported): April 2, 2002



                           Champion Enterprises, Inc.
             (Exact name of registrant as specified in its charter)



                                    Michigan
                 (State or other jurisdiction of incorporation)



       1-9751                                              38-2743168
(Commission File Number)                       (IRS Employer Identification No.)


          2701 Cambridge Court, Suite 300, Auburn Hills, Michigan 48326
               (Address of principal executive offices) (Zip Code)





Registrant's telephone number, including area code: 248/340-9090



<PAGE>

Item 5.  Other Events.

         On April 2, 2002, Champion Enterprises, Inc., a Michigan corporation
("Champion"), completed the sale to Fletcher International, Ltd., a Bermuda
company affiliated with Fletcher Asset Management, Inc. ( "Purchaser"), of
25,000 shares of Series C Cumulative Convertible Preferred Stock, no par value
per share (the "Series C Preferred Stock") and the issuance of a warrant (the
"Warrant") to the Purchaser to purchase up to 1,082,720 shares of Champion's
common stock, in each case subject to adjustment under specified circumstances.
In connection with the sale of the Series C Preferred Stock, Champion amended
and restated the rights and preferences of its Series B-1 Cumulative Convertible
Preferred Stock (the "Series B-1 Preferred Stock" or, when referring to the
Series B-1 Preferred Stock together with any subsequent series of preferred
stock purchased under certain investment rights held by Fletcher and discussed
below, the "Series B Preferred Stock"). The aggregate purchase price for the
Series C Preferred Stock was $25.0 million, and the net proceeds from the sale
will be used to cash collateralize letters of credit.

         The following description of the Warrant, the Series C Preferred Stock
and the Series B-1 Preferred Stock is qualified in its entirety by reference to
the Warrant Certificate dated as of April 2, 2002 (the "Warrant Certificate"),
the Certificate of Rights and Preferences relating to the Series C Preferred
Stock (the "Certificate"), the First Amended and Restated Certificate of Rights
and Preferences relating to the Series B-1 Preferred Stock (the "B-1
Certificate") and the Agreement dated as of March 29, 2002 by and between
Champion and Fletcher (the "Agreement"), which are attached as exhibits hereto.

         The Warrant is exercisable on a net basis only in whole or in part at
any time on or prior to April 2, 2009 at an initial exercise price of $12.0369
per share, which is equal to approximately 150% of the volume-weighted average
price of Champion's common stock on the New York Stock Exchange on March 28,
2002. The exercise price will be adjusted to 150% of the average price for
Champion's common stock over the 90-business-day period following March 29, 2002
at the conclusion of such 90-day period, and will increase by $0.75 on each
anniversary of March 29, 2002 thereafter. The number of shares subject to the
Warrant will also be adjusted based upon a formula that takes into account the
average price for Champion's common stock over the 90-business-day period
following March 29, 2002 at the conclusion of such 90-day period. Although the
Warrant may be exercised in part, it must be exercised for no fewer than 250,000
shares of common stock at a time.

         Cumulative dividends are payable on the Series C Preferred Stock
quarterly in arrears. The dividend rate is 5% per annum, based on the stated
value of $1,000 per share of Series C Preferred Stock. Subject to certain
conditions specified in the Certificate, dividends payable on the Series C
Preferred Stock may be paid at the option of Champion either in cash or by
issuing shares of Champion's Common Stock that have been registered under the
Securities Act of 1933, as amended (the "Act"). The number of shares of Common
Stock of Champion to be issued as dividends is determined by

                                       1

<PAGE>

dividing the cash amount of the dividend otherwise payable by the market value
of the Common Stock determined in accordance with the provisions of the
Certificate. If Champion fails to pay any dividends when due, those dividends
will accumulate and accrue additional dividends at the then existing dividend
rate.

         Unless all accumulated dividends on the Series C Preferred Stock have
been paid in full and dividends for the next four dividend periods have been
designated and set aside, and a potential additional dividend has been paid with
respect to the Series C Preferred Stock, so long as shares of the Series C
Preferred Stock are outstanding, no dividends may be paid on the Common Stock or
any other securities of Champion ranking junior to the Series C Preferred Stock
with respect to dividends and distributions on liquidation ("Junior Securities")
or having a priority equal to the Series C Preferred Stock with respect to
dividends and distributions on liquidation ("Parity Securities"), except for
dividends on the Series B-1 Preferred Stock and, with the exception of Series
B-1 Preferred Stock, no shares of Junior Securities or Parity Securities may be
purchased or otherwise redeemed by Champion.

         If Champion is in arrears in the payment of dividends on the Series C
Preferred Stock or the Series B Preferred Stock in an aggregate amount equal to
more than two quarterly dividends, the dividend rate on the Series C Preferred
Stock will be 15% per annum until all accrued and unpaid dividends are paid in
full.

         Upon a liquidation of Champion, the holders of the Series C Preferred
Stock will be entitled to receive the greater of (1) $1,000 per share of Series
C Preferred Stock plus accrued but unpaid dividends before the holders of any
Junior Securities receive any payment or (2) the amount the holders would have
received if the holders had converted all outstanding shares of Series C
Preferred Stock into common stock immediately prior to the date of the
liquidation. The holders of all other Champion capital stock junior to the
Series C Preferred Stock will receive all liquidating distributions after the
holders of the Series C Preferred Stock have received their stated amounts with
respect to liquidating distributions.

         The Series C Preferred Stock will not have voting rights on ordinary
corporate matters, except as required by Michigan law. However, during the
18-month period ending and excluding September 29, 2003, if there is outstanding
at least $25,000,000 (based upon a value equal to $1,000 per share plus any
accrued and unpaid dividends) of Series C Preferred Stock (including any future
issuance of additional shares of other Series C Preferred Stock pursuant to the
Agreement), approval of a majority of the Series C Preferred Stock will be
required before Champion can authorize, create or issue any shares of capital
stock having a priority equal or senior to the Series C Preferred Stock with
respect to dividends or distributions upon liquidation. The holders of the
Series C Preferred Stock also will vote separately as a class and the approval
of a majority of the Series C Preferred Stock will be required to (a) amend,
alter, or repeal the provisions of the Articles, including the Certificate, or
Bylaws of Champion so as to change any of the rights, preferences or privileges
of the Series C Preferred Stock, (b) permit any subsidiary of Champion to issue
or sell any capital stock of such subsidiary, (c) increase or decrease,


                                       2

<PAGE>

other than by redemption or conversion, the total number of authorized shares of
preferred stock of Champion or (d) amend any provisions of any stock of Champion
with a priority equal or senior to the Series C Preferred Stock with respect to
dividends or distributions on liquidation so as to make such capital stock
redeemable by Champion.

         The holders of the Series C Preferred Stock will have the right to
convert all or any part of the Series C Preferred Stock into Common Stock at a
price of $9.6295 per share until and excluding June 29, 2003 or thereafter at a
conversion price equal to 115% of the average market price of Champion Common
Stock, calculated in accordance with the Certificate, as of June 29, 2003. The
conversion price shall not be less than $5.6644 nor more than $10.8332, although
these minimum and maximum conversion prices are subject to adjustment for stock
splits, recombinations, stock dividends and the like. For purposes of any
conversion, each share of Series C Preferred Stock will have a value equal to
$1,000, plus any accrued and unpaid dividends. Champion has the right to cause
the conversion of all but not less than all of the Series C Preferred Stock into
Common Stock at any time on or after March 29, 2004 if the average market price
(as defined) of the Common Stock exceeds 200% (or less, over time) of the
conversion price on at least 30 consecutive business days.

         Holders of Series C Preferred Stock also have the right to redeem, from
time to time, all or part of the Series C Preferred Stock beginning March 29,
2004 on terms set forth in the Certificate. On April 2, 2009, Champion must
redeem all Series C Preferred Stock. Champion, at its sole option, may deliver
cash or shares of registered (or, in some instances, unregistered) Common Stock
in satisfaction of such April 2, 2009 redemption obligation.

         The Certificate provides the holders of Series C Preferred Stock with
certain rights if Champion is involved in a "Business Combination". In a
Business Combination, Champion may elect to acquire the Series C Preferred Stock
at the closing of the transaction in exchange for the stock and other
securities, cash and property such holder would have received if the Series C
Preferred Stock had been redeemed or converted into Common Stock prior to the
transaction, plus a premium cash payment ranging from 0% to 50% of the stated
value of the Series C Preferred Stock (plus any accrued and unpaid dividends),
based upon the acquisition price and the length of time remaining in the seven
year life of the Series C Preferred Stock.

         If Champion does not elect to acquire the Series C Preferred Stock at
the closing of the Business Combination, then each holder has the right to elect
to receive either or a combination of (a) the stock and other securities, cash
and property which the holder would have received had the holder converted or
redeemed the Series C Preferred Stock into Common Stock immediately before the
transaction, (b) shares of common stock of the acquiring person or its parent
company, as elected by the holders, according to formulas contained in the
Certificate, which take into account various factors, including the acquisition
price for Champion's Common Stock, the conversion price for the Series C
Preferred Stock, the redemption amount for the Series C Preferred Stock, the
market price of the common stock of the acquiring person or its parent, and the
market price of


                                       3

<PAGE>

the Common Stock, or (c) cash in an amount equal to 133% of the stated value of
the Series C Preferred Stock (plus all accrued but unpaid dividends). This cash
payment would be paid by the acquiring person and not Champion. The acquiring
person also would be required to assume, in writing, the obligations of Champion
under the Certificate and the Agreement.

         The Agreement requires Champion to file a registration statement
covering 1.5 times the number of shares of Common Stock issuable under the
Agreement by a date calculated in accordance with the Agreement and to use its
best efforts to cause the registration statement to be declared effective no
later than 90 days after and including the date of the event that triggers the
registration obligation. Champion will be required to increase the number of
shares registered under the registration statement if the total number of shares
of Common Stock issued and issuable under the Agreement (including future
issuances of Series C Preferred and shares issued or issuable as dividends
within one year following the measurement date) exceeds 80% of the number of
shares then registered. Champion currently estimates that the registration
statement will initially cover approximately 8,300,000 shares of Common Stock.
Champion also is required to obtain shareholder consent if the total number of
shares of Common Stock issued or issuable to Purchaser under the Agreement would
exceed 17.50% of the number of shares outstanding on March 29, 2002 and the
listing requirements or rules of the New York Stock Exchange would require
shareholder approval to issue 20% of the number of shares outstanding on March
29, 2002, or more. If this shareholder consent is not received within 60 days
after notice is sent to Champion by Purchaser, Purchaser may (1) convert and
redeem shares of Series C Preferred Stock and (2) exercise the Warrant, for that
number of shares that would cause the total number of shares issued under the
Agreement to exceed 19.99% of the shares of Champion's common stock outstanding
on March 29, 2002, into "Excess Rights". The Excess Rights will have a value
equal to the market price of the Common Stock on the notice date multiplied by
the number of shares of Common Stock converted into the Excess Rights. At any
time after it obtains the Excess Rights, Purchaser may convert the Excess Rights
into a new series of additional preferred shares of Champion. The Agreement also
provides that, unless otherwise specified by Purchaser, the number of shares
that may be issued upon conversion of the Series C Preferred Stock, the Series
B-1 Preferred Stock and the exercise of the Warrant, when combined with all
shares of Champion common stock then owned by Fletcher, may not exceed
4,720,000, unless Purchaser delivers an increase notice and 65 days pass after
that notice is delivered.

         With certain exceptions, the Agreement requires Champion to provide
Purchaser, its affiliates and its subsidiaries with a three business day right
of first offer with respect to the purchase of any shares of Champion's capital
stock or any securities convertible into or exchangeable for any shares of
Champion's capital stock, where the aggregate number of shares or price per
share of such capital stock issuable at closing or upon conversion, exercise,
exchange or otherwise cannot be determined as of the date such agreement is
entered into or is otherwise subject to change, with some exceptions. The right
of first offer only applies during such times as the Purchaser, its affiliates
and its subsidiaries own Series B Preferred Stock or Series C Preferred Stock
convertible or

                                       4

<PAGE>

redeemable into a number of shares of Common Stock that exceeds 3.5% of the
number of shares of Common Stock outstanding on the date of the Agreement or
redeemable for at least $15 million.

         Under the Agreement, Champion granted to the Purchaser rights to
acquire up to a total of 10,000 additional shares of Champion Series C Preferred
Stock at a price of $1,000 per share during the 60 business days following March
29, 2002.

         Under the Agreement, Champion and Fletcher extended to December 31,
2004, the expiration of the period in which Fletcher may exercise rights, in
accordance with the terms of the Agreement between Champion and Fletcher dated
as of June 29, 2001, to purchase up to an additional 12,000 shares of additional
series of Champion Series B Preferred Stock (e.g., Series B-2, Series B-3, etc.)
having similar terms and conditions as the Series B-1 Preferred Stock prior to
the amendment of the B-1 Certificate. Among other changes to the rights and
preferences of the Series B-1 Preferred Stock effected by the Series B-1
Certificate, the Series B-1 Certificate provides that at any time after April 2,
2002, the Purchaser may require Champion to redeem any or all of the shares of
Series B-1 Preferred Stock held by the Purchaser on terms set forth in the
Certificate. The mandatory redemption date for the Series B-1 Preferred Stock is
March 29, 2004. The B-1 Certificate also contains certain other changes to the
rights and preferences of the Series B-1 Preferred Stock that conform such
rights and preferences to those of the Series C Preferred.

         The sale of the Series C Preferred Stock was made in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act of
1933, as amended, and Regulation D promulgated thereunder. The sale was made
without general solicitation or advertising, Purchaser is a sophisticated
investor with access to all relevant information necessary to evaluate an
investment in the securities, and Purchaser represented to Champion that the
securities were being acquired for investment purposes.



Item 7.  Exhibits.

Exhibit
Number

4.1      Certificate of Rights and Preferences of Series C Cumulative
         Convertible Preferred Stock of Champion Enterprises, Inc., dated April
         2, 2002.

4.2      First Amended and Restated Certificate of Rights and Preferences of
         Series B-1 Cumulative Convertible Preferred Stock of Champion
         Enterprises, Inc., dated April 2, 2002.

4.3      Warrant Certificate dated as of April 2, 2002.





                                       5


<PAGE>

4.4      Agreement, dated as of March 29, 2002, between Champion Enterprises,
         Inc. and Fletcher International, Ltd.

99       Press Release Issued by Champion on April 3, 2002.



























                                       6

<PAGE>


                                   SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                             CHAMPION ENTERPRISES, INC.



                                     /s/ Anthony S. Cleberg
                              ------------------------------------------------
                              Anthony S. Cleberg, Executive Vice President and
                              Chief Financial Officer






April 5, 2002




<PAGE>
                                INDEX TO EXHIBITS


Exhibit No.                              Description


4.1      Certificate of Rights and Preferences of Series C Cumulative
         Convertible Preferred Stock of Champion Enterprises, Inc., dated April
         2, 2002.

4.2      First Amended and Restated Certificate of Rights and Preferences of
         Series B-1 Cumulative Convertible Preferred Stock of Champion
         Enterprises, Inc., dated April 2, 2002.

4.3      Warrant Certificate dated as of April 2, 2002

4.4      Agreement, dated as of March 29, 2002, between Champion Enterprises,
         Inc. and Fletcher International, Ltd.

99       Press Release Issued by Champion on April 3, 2002.






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>3
<FILENAME>k68735ex4-1.txt
<DESCRIPTION>CERTIFICATE OF RIGHTS AND PREFERENCES OF SERIES C
<TEXT>
<PAGE>
                                                                     EXHIBIT 4.1


                      CERTIFICATE OF RIGHTS AND PREFERENCES
                                       OF
                 SERIES C CUMULATIVE CONVERTIBLE PREFERRED STOCK
                                       OF
                           CHAMPION ENTERPRISES, INC.

                            CERTIFICATE OF RESOLUTION


         Pursuant to Section 450.1302 of the Michigan Business Corporation Act,
CHAMPION ENTERPRISES, INC., a corporation organized and existing under the laws
of the State of Michigan, hereby certifies that the following resolution was
duly adopted by the Board of Directors of the Company on March 29, 2002 pursuant
to authority conferred upon the Board of Directors by the Restated Articles of
Incorporation of the Company, which authorizes the issuance of up to Five
Million (5,000,000) shares of preferred stock, no par value.

         RESOLVED, that pursuant to authority expressly granted to and vested in
the Board of Directors of the Company and pursuant to the provisions of the
Articles of Incorporation, the Board of Directors hereby creates a series of
preferred stock, herein designated and authorized as the Series C Cumulative
Convertible Preferred Stock, no par value, which shall consist of Thirty-Five
Thousand (35,000) of the Five Million (5,000,000) shares of preferred stock
which the Company now has authority to issue, and the Board of Directors hereby
fixes the powers, designations and preferences and the relative, participating,
optional and other special rights of the shares of such series, and the
qualifications, limitations and restrictions thereof as follows:

         1. Number. The number of shares constituting the Series C
Cumulative Convertible Preferred Stock shall be Thirty-Five Thousand (35,000).

         2. Definitions. Unless the context otherwise requires, when used herein
the following terms shall have the meaning indicated.

         "Acquiring Person" means, in connection with any Business Combination,
the continuing or surviving corporation of a consolidation or merger with the
Company (if other than the Company), the transferee of all or substantially all
of the properties or assets of the Company, the corporation consolidating with
or merging into the Company in a consolidation or merger in connection with
which the Common Stock is changed into or exchanged for stock or other
securities of any other Person or cash or any other property, the entity or
group acting in concert acquiring or possessing the power to cast the majority
of the eligible votes at a meeting of the Company's shareholders at which
directors are elected, or, in the case of a capital reorganization or
reclassification, the Company.

         "Acquisition Price" means (i) the Daily Market Price of the Common
Stock on the date immediately preceding the date on which a Business Combination
is consummated, or (ii) if a purchase, tender or exchange offer is made by the
Acquiring Person (or by any of its affiliates) to the holders of the Common
Stock and such offer is accepted by the holders of more than fifty percent (50%)
of the outstanding shares of Common Stock, the greater of (x) the price
determined in accordance with the provisions of the foregoing clause (i) of this
sentence and (y)







                                       1
<PAGE>

the Daily Market Price on the date immediately preceding the acceptance of such
offer by the holders of more than fifty percent (50%) of the outstanding shares
of Common Stock.

         "Articles" means the Restated Articles of Incorporation of the Company,
as amended.

         "Average Market Price" means, with respect to any reference date, the
average of the Daily Market Prices of the Common Stock for the thirty (30)
Business Days ending on and including the third Business Day before such
reference date, but not greater than the average of the Daily Market Prices of
the Common Stock for the five (5) Business Days ending on and including the
twenty-eighth Business Day before such reference date.

         "Board" means the Board of Directors of the Company.

         "Business Combination" is defined in Section 6(F)(i).

         "Business Day" means any day on which the Common Stock may be traded on
the NYSE, or if not admitted for trading on the NYSE, on any day other than a
Saturday, Sunday or holiday on which banks in New York City are required or
permitted to be closed.

         "Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated) of capital or capital stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership,
limited partnership, limited liability company or other equity interests of such
Person.

         "Cash Redemption Closing Date" is defined in Section 6(B)(ii).

         "Certificate of Rights and Preferences" means this Certificate of
Rights and Preferences of the Series C Preferred Stock.

         "Common Stock" means the Company's common stock, par value one dollar
($1.00) per share, and any Capital Stock for or into which such Common Stock
hereafter is exchanged, converted, reclassified or recapitalized by the Company
or pursuant to a Business Combination to which the Company is a party.

         "Company" means Champion Enterprises, Inc., a Michigan corporation.

         "Conversion Closing Date" is defined in Section 6(A)(i).

         "Conversion Notice" is defined in Section 6(A)(i).

         "Conversion Price" means (i) until and excluding June 29, 2003,
$9.6295, and (ii) on and after June 29, 2003, one hundred fifteen percent (115%)
of the Average Market Price calculated as of June 29, 2003; provided that the
Conversion Price shall not be greater than $10.8332 or less than an amount equal
to the product of (a) the quotient of six dollars divided by eight dollars and
fifty cents ($6.00/$8.50) times (b) the Main Agreement Date Price, in each case
subject to adjustment for stock splits, recombinations, stock dividends and the
like.





                                       2
<PAGE>


         "Conversion Rate" means (i) the Stated Value of one share of Series C
Preferred Stock plus accrued and unpaid dividends divided by (ii) the Conversion
Price.

         "Daily Market Price" means, on any date, the amount per share of the
Common Stock (or, for purposes of determining the Daily Market Price of the
common stock of an Acquiring Person or its Parent under Section 6(F), the common
stock of such Acquiring Person or such Parent), equal to (i) the daily
volume-weighted average price on the NYSE or, if no such sale takes place on
such date, the average of the closing bid and asked prices on the NYSE thereof
on such date, in each case as reported by Bloomberg, L.P. (or by such other
Person as the Holder and the Company may agree), or (ii) if such Common Stock or
common stock of an Acquiring Person or its Parent is not then listed or admitted
to trading on the NYSE, the higher of (x) the book value per share thereof as
determined by any firm of independent public accountants of recognized standing
selected by the Board of Directors of the Company as of the last day of any
month ending within sixty (60) days preceding the date as of which the
determination is to be made or (y) the fair value per share thereof determined
in good faith by the Board of Directors of the Company as of a date which is no
more than ten (10) Business Days before and excluding the date as of which the
determination is to be made.

         "Dividend Payment Date" is defined in Section 3(A).

         "Dividend Period" is defined in Section 3(A).

         "Dividend Rate" means a rate equal to five percent (5%) per annum times
the Stated Value subject to Sections 3(E) and 3(F).

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Fletcher" means Fletcher International, Ltd. a company organized under
the laws of Bermuda, together with its successors.

         "Holder" shall mean a holder of Series C Preferred Stock.

         "Issue Date" means with respect to any shares of Series C Preferred
Stock the original date of issuance of such shares of Series C Preferred Stock.

         "Junior Securities" means Capital Stock that, with respect to dividends
and distributions upon Liquidation, ranks junior to the Series C Preferred
Stock, including but not limited to Common Stock, Series A Preferred Stock, and
any other class or series of Capital Stock issued by the Company or any
Subsidiary of the Company on or after the date of the Main Agreement, but
excluding any Parity Securities and Senior Securities issued (i) to Fletcher or
its authorized assignees under the Main Agreement and the Prior Agreement, (ii)
with the approval of the Holders of a Majority of the Series C Preferred Stock
or (iii) upon the conversion, redemption or exercise of securities described in
clause (i) or (ii).

         "Liquidation" means the voluntary or involuntary liquidation,
dissolution or winding up of the Company; provided, however, that a
consolidation, merger or share exchange shall not be deemed a Liquidation, nor
shall a sale, assignment, conveyance, transfer, lease or other disposition by
the Company of all or substantially all of its assets, which does not involve a






                                       3
<PAGE>

distribution by the Company of cash or other property to the holders of Common
Stock, be deemed to be a Liquidation.

         "Liquidation Preference" is defined in Section 4.

         "Main Agreement" means the Agreement dated as of March 29, 2002 between
the Company and Fletcher pursuant to which up to thirty-five thousand (35,000)
shares of Series C Preferred Stock and a warrant are to be issued by the
Company, including all Schedules and Exhibits thereto.

         "Main Agreement Date Price" means $8.0246.

         "Majority of the Series C Preferred Stock" means more than fifty
percent (50%) of the then outstanding shares of Series C Preferred Stock.

         "NYSE" shall have the meaning set forth in the Main Agreement.

         "Other Securities" means any stock (other than Common Stock) and other
securities of the Company or any other Person which the Holders of the Series C
Preferred Stock at any time shall be entitled to receive, or shall have
received, upon conversion or redemption of the Series C Preferred Stock in lieu
of or in addition to Common Stock, or which at any time shall be issuable or
shall have been issued in exchange for or in replacement of Common Stock or
Other Securities.

         "Parent" means, as to any Acquiring Person, any corporation that (i)
controls the Acquiring Person directly or indirectly through one or more
intermediaries, (ii) is required to include the Acquiring Person in the
consolidated financial statements contained in such Parent's Annual Report on
Form 10-K (if the Parent is required to file such a report) and (iii) is not
itself included in the consolidated financial statements of any other Person
(other than its consolidated subsidiaries).

         "Parity Securities" means any class or series of Capital Stock that,
with respect to dividends or distributions upon Liquidation, is pari passu with
the Series C Preferred Stock, including the Series B Preferred Shares (as
defined in the Prior Agreement).

         "Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, limited liability company, joint
venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.

         "Preferred Stock" means the Company's preferred stock authorized
pursuant to the provisions of the Articles.

         "Prior Agreement" means the Agreement dated as of June 29, 2001,
between the Company and Fletcher pursuant to which twenty thousand (20,000)
shares of Series B-1 Preferred Stock and the right to purchase up to an
additional twelve thousand (12,000) shares of Series B Preferred Stock have been
issued by the Company, including all Schedules and Exhibits thereto.




                                       4
<PAGE>


         "Record Date" is defined in Section 3(A).

         "Redemption Amount" means a dollar amount for each share of the
then-outstanding Series C Preferred Stock redeemed by such Holder equal to the
Stated Value per share plus an amount equal to all accrued but unpaid dividends
thereon, whether or not earnings are available in respect of such dividends or
such dividends have been declared, to and including the date full payment is
tendered to the Holders with respect to such redemption.

         "Redemption Notice" is defined in Section 6(B)(i).

         "Redemption Notice Date" is defined in Section 6(B)(i).

         "Registered Common Stock" means Common Stock that has been registered
under the Securities Act and is freely tradable.

         "Restatement" means that Champion adversely restates net income or
shareholders' equity, in any material respect, in any portion of its financial
statements as included in a Form 10-K or Form 10-Q filed with the Securities and
Exchange Commission in the form of an amendment thereto, press release, Form 8-K
or any other method except as is required as a result of a change occurring
after the date of the Main Agreement in (i) applicable law or (ii) generally
accepted accounting principles promulgated by the Financial Accounting Standards
Board or the Securities and Exchange Commission, which change is implemented by
the Company in the manner and at the time prescribed by such law or such
generally accepted accounting principle.

         "Restatement Conversion Price" means one hundred fifteen percent (115%)
of the Average Market Price calculated on the date ninety (90) days after and
excluding the Restatement Date.

         "Restatement Date" means the most recent date on which a Restatement
occurs.

         "Restatement Notice" means a written notice from Champion to Fletcher,
(i) stating the Restatement Date and (ii) including the documents in which the
Restatement was publicly disclosed.

         "Securities Act" means the Securities Act of 1933, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.

         "Senior Securities" means any class or series of Capital Stock that,
with respect to dividends or distributions upon Liquidation, ranks senior to the
Series C Preferred Stock.

         "Series A Preferred Stock" means the Series A Preferred Stock of the
Company, the powers, designations, preferences and relative, participating,
optional and other special rights of which are specified in the Articles.

         "Series B-1 Preferred Stock" means the Series B-1 Cumulative
Convertible Preferred Stock of the Company. The powers, designations,
preferences and relative, participating, optional and other special rights are
specified in the First Amended and Restated Certificate of Rights and
Preferences of Series B-1 Cumulative Convertible Preferred Stock.





                                       5
<PAGE>


         "Series C Preferred Stock" means the Series C Cumulative Convertible
Preferred Stock of the Company or successor as contemplated by Section 6(F)(ii).

         "Stated Value" is an amount equal to one thousand dollars ($1,000) per
share of Series C Preferred Stock.

         "Stock Redemption Closing Date" is defined in Section 6(B)(iii).

         "Subsidiary" of a Person means (i) a corporation, a majority of whose
stock with voting power, under ordinary circumstances, to elect directors is at
the time of determination, directly or indirectly, owned by such Person or by
one or more Subsidiaries of such Person, or (ii) any other entity (other than a
corporation) in which such Person or one or more Subsidiaries of such Person,
directly or indirectly, at the date of determination thereof has at least a
majority ownership interest.

         The foregoing definitions will be equally applicable to both the
singular and plural forms of the defined terms.

         3. Dividends and Distributions.

                 (A) Holders shall be entitled to receive out of the assets of
         the Company legally available for that purpose, dividends at the
         Dividend Rate to be paid in accordance with the terms of this Section
         3. Such dividends shall be fully cumulative from the Issue Date, shall
         accumulate regardless of whether the Company earns a profit and shall
         be payable in arrears, when and as declared by the Board, on March 31,
         June 30, September 30 and December 31 of each year (each such date
         being herein referred to as a "Dividend Payment Date"), commencing on
         June 30, 2002. The period from the Issue Date to June 30, 2002, and
         each quarterly period between consecutive Dividend Payment Dates shall
         hereinafter be referred to as a "Dividend Period." The dividend for any
         Dividend Period for any share of Series C Preferred Stock that is not
         outstanding on every day of the Dividend Period shall be prorated based
         on the number of days such share was outstanding during the period.
         Each such dividend shall be paid to the Holders of record as their
         names appear on the share register of the Company on the corresponding
         Record Date. As used above, the term "Record Date" means, with respect
         to the dividend payable on March 31, June 30, September 30 and December
         31, respectively, of each year, the preceding March 15, June 15,
         September 15 and December 15, or such other record date designated by
         the Board with respect to the dividend payable on such respective
         Dividend Payment Date not exceeding thirty (30) days preceding such
         Dividend Payment Date. Dividends on account of arrears for any past
         Dividend Periods may be declared and paid at any time, without
         reference to any Dividend Payment Date, to Holders of record on a date
         designated by the Board, not exceeding thirty (30) days preceding the
         payment date thereof, as may be fixed by the Board. For purposes of
         determining the amount of dividends accrued as of the first Dividend
         Payment Date and as of any date that is not a Dividend Payment Date,
         such amount shall be calculated on the basis of the Dividend Rate for
         the actual number of days elapsed from and including the Issue Date (in
         case of the first Dividend Payment Date and any date prior to the first
         Dividend Payment Date) or the last preceding







                                       6
<PAGE>

         Dividend Payment Date (in case of any other date) to the date as of
         which such determination is to be made, based on a three hundred sixty
         (360) day year.

                 (B) Dividends payable on the Series C Preferred Stock may be
         paid, at the option of the Company, either in cash or by the issuance
         of Registered Common Stock, provided, however, that the Company's right
         to pay dividends on any Dividend Payment Date by the issuance of
         Registered Common Stock shall continue only so long as the number of
         shares of Common Stock issued and issuable under the Main Agreement
         (including one year of dividends from such Dividend Payment Date,
         assuming that all such dividends will be paid in shares of Common Stock
         as they accrue) and all previously issued and issuable shares of Common
         Stock (including shares issued or issuable following exercise of the
         warrant issued pursuant to the Main Agreement), all issued and issuable
         but unconverted Series C Preferred Stock (on an as-converted basis as
         of that date) does not exceed seventeen and one-half percent (17.5%) of
         the Original Number (as defined in the Main Agreement), or, if such
         number of shares exceeds seventeen and one-half percent (17.5%) of the
         Original Number and does not exceed nineteen and ninety-nine
         one-hundredths percent (19.99%) of the Original Number, the Company has
         notified its shareholders of a shareholder's meeting for the purpose of
         voting on a Required Consent (as defined in the Main Agreement) in
         accordance with the Main Agreement and has used and is using its best
         efforts to obtain the Required Consent. Although it is the intent and
         view of the Company that the issuance of Common Stock with respect to
         the Series C Preferred Stock is to be treated as independent of any
         issuance of Common Stock with respect to the Series B Preferred Shares
         (as defined in the Main Agreement), in the event any such issuances of
         Common Stock are deemed to be related pursuant to the listing
         requirements and rules of the NYSE by the NYSE, the provisions of this
         Section 3(B) (including, but not limited to, the obligation to obtain
         the Required Consent) shall be deemed to apply to the number of shares
         of Common Stock in the aggregate issued and issuable with respect to
         both the Series C Preferred Stock and the Series B Preferred Shares (as
         defined in the Prior Agreement). Subject to the foregoing, payments on
         any Dividend Payment Date shall be made in Registered Common Stock
         unless the Company notifies the Holders in writing of its intention to
         pay cash on or before, but no more than fifteen (15) days before, and
         including, the immediately preceding Dividend Payment Date. The number
         of shares of Registered Common Stock to be issued shall be determined
         by dividing the cash amount of the dividend otherwise payable by the
         Average Market Price calculated as of such Dividend Payment Date;
         provided, however, if the Company shall combine, subdivide or
         reclassify its Common Stock, or shall declare any dividend payable in
         shares of its Common Stock, or shall take any other action of a similar
         nature affecting such shares, the number of shares of Registered Common
         Stock to be issued shall be adjusted to the extent appropriate to
         reflect such event, including appropriate adjustments to account for
         any such event that occurs during the period used for calculating such
         Average Market Price. The number of shares of Registered Common Stock
         to be issued as a dividend shall be rounded up to the nearest whole
         share after aggregating all shares of Series C Preferred Stock owned by
         a Holder.

                 (C) If, on any Dividend Payment Date, the Company fails to pay
         dividends, then until the dividends that were scheduled to be paid on
         such date are paid, such






                                       7
<PAGE>

         dividends shall cumulate and shall accrue additional dividends to and
         including the date of payment thereof at the Dividend Rate then in
         effect, compounded quarterly on each subsequent Dividend Payment Date.
         Unpaid dividends for any period less than a full Dividend Period shall
         cumulate on a day to day basis and shall be computed on the basis of a
         three hundred sixty (360) day year.

                 (D) So long as any shares of the Series C Preferred Stock shall
         be outstanding, (i) the Company shall not and shall not allow its
         Subsidiaries to declare or pay any dividend whatsoever, whether in
         cash, property or otherwise, set aside any cash or property for the
         payment of dividends, or make any other distribution on any Junior
         Securities, (ii) the Company shall not and shall not allow its
         Subsidiaries to declare or pay any dividend whatsoever, whether in
         cash, property or otherwise, set aside any cash or property for the
         payment of dividends, or make any other distribution on any Parity
         Securities, except for dividends paid to the Company or any of its
         wholly-owned Subsidiaries and dividends paid on the Series B Preferred
         Shares (as defined in the Prior Agreement)) (iii) the Company shall not
         and shall not allow its Subsidiaries to repurchase, redeem or otherwise
         acquire for value or set aside any cash or property for the repurchase
         or redemption of any Junior Securities or Parity Securities, with the
         exception of the Series B Preferred Shares (as defined in the Prior
         Agreement), unless in each such case (x) all dividends to which the
         Holders of the Series C Preferred Stock shall have been entitled to
         receive for all previous Dividend Periods shall have been paid and
         dividends for the subsequent four Dividend Periods shall have been
         designated and set aside and (y) a dividend (including the amount of
         any dividends paid pursuant to the provisions of Section 3(A)) is paid
         with respect to all outstanding shares of Series C Preferred Stock in
         an amount for each such share of Series C Preferred Stock equal to the
         aggregate amount of such dividend for the number of shares of Common
         Stock equal to (i) the Stated Value plus any accrued but unpaid
         dividends as of the record date of such dividend divided by (ii) the
         Conversion Price (or in the event of a Restatement, the Restatement
         Conversion Price, if the Restatement Conversion Price is lower than the
         then-current Conversion Price) on such record date (or, if such record
         date is not a Business Day, the last Business Day preceding such record
         date).

                 (E) Whenever, at any time or times, dividends payable on any
         Series B Preferred Share (as defined in the Prior Agreement) or any
         share of Series C Preferred Stock shall be in arrears in an aggregate
         amount greater than two (2) quarterly dividends, the Dividend Rate
         shall mean a rate equal to fifteen percent (15%) per annum times the
         Stated Value until such date that all accrued and unpaid dividends
         shall have been declared and paid in full.

                 (F) Whenever, at any time or times (i) an Issuance Blockage (as
         defined in the Main Agreement or the Prior Agreement) shall exist at
         any time ninety (90) calendar days after and excluding the date of the
         first Excess Rights Notice (as defined in the Main Agreement or the
         Prior Agreement) or (ii) the Company shall fail to redeem any shares of
         Series C Preferred Stock or any Series B Preferred Shares (as defined
         in the Prior Agreement) for cash by the date it is obligated to do so
         under Section 6(B) hereof or of the First Amended and Restated
         Certificate of Rights and Preferences of Series B-1 Cumulative
         Convertible Preferred Stock or any Subsequent Certificates of Rights
         and






                                       8
<PAGE>

         Preferences (as defined in the Prior Agreement) and such failure to
         pay cash is ongoing, then (x) the Dividend Rate shall mean a rate equal
         to fifteen percent (15%) per annum times the Stated Value until such
         date as the circumstances described in clause (i) and (ii) no longer
         exist and (y) all dividends payable with respect to such periods shall
         be paid in additional shares of Series C Preferred Stock.

         4. Liquidation Preference. In the event of any Liquidation, after
payment or provision for payment by the Company of the debts and other
liabilities of the Company and the liquidation preference of any Senior
Securities that rank senior to the Series C Preferred Stock with respect to
distributions upon Liquidation, each Holder shall be entitled to receive an
amount in cash for each share of the then outstanding Series C Preferred Stock
held by such Holder equal to the greater of (a) the Stated Value per share plus
an amount equal to all accrued but unpaid dividends thereon, whether or not
earnings are available in respect of such dividends or such dividends have been
declared, to and including the date full payment is tendered to the Holders with
respect to such Liquidation and no more and (b) the amount the Holders would
have received if the Holders had converted all outstanding shares of Series C
Preferred Stock into Common Stock in accordance with the provisions of Section
6(A) hereof as of the Business Day immediately preceding the date of such
Liquidation (as if the Conversion Notice had been delivered on such date and the
Conversion Closing Date had occurred on such date) (such greater amount being
referred to herein as the "Liquidation Preference"), before any distribution
shall be made to the holders of any Junior Securities (and any Senior Securities
or Parity Securities that, with respect to distributions upon Liquidation, rank
junior to the Series C Preferred Stock) upon the Liquidation of the Company. In
case the assets of the Company available for payment to the Holders are
insufficient to pay the full Liquidation Preference on all outstanding shares of
the Series C Preferred Stock and all outstanding shares of Parity Securities and
Senior Securities that, with respect to distributions upon Liquidation, are pari
passu with the Series C Preferred Stock in the amounts to which the holders of
such shares are entitled, then the entire assets of the Company available for
payment to the Holders and to the holders of such Parity Securities and Senior
Securities shall be distributed ratably among the Holders of the Series C
Preferred Stock and the holders of such Parity Securities and Senior Securities,
based upon the aggregate amount due on such shares upon Liquidation. Written
notice of any Liquidation of the Company, stating a payment date and the place
where the distributable amounts shall be payable, shall be given by facsimile
and overnight delivery not less than ten (10) days prior to the payment date
stated therein, to the Holders of record of the Series C Preferred Stock, if
any, at their respective addresses as the same shall appear on the books of the
Company.

         5. Voting Rights. The Holders shall have the following voting rights
with respect to the Series C Preferred Stock:

                 (A) Each share of Series C Preferred Stock shall entitle the
         holder thereof to the voting rights specified in Section 5(B) and no
         other voting rights except as required by law.

                 (B) The consent of the Holders of at least a Majority of the
         Series C Preferred Stock, voting separately as a single class with one
         vote per share, in person or by proxy, either in writing without a
         meeting or at an annual or a special meeting of such Holders called for
         the purpose, shall be necessary to:





                                       9
<PAGE>


                 (i) amend, alter or repeal any of the provisions of the
         Articles, including the Certificate of Rights and Preferences, or
         Bylaws of the Company so as to:

                         A. change any of the rights, preferences or privileges
                  of Holders. Without limiting the generality of the preceding
                  sentence, such change includes any action that would:

                                  1. Reduce the Dividend Rate on the Series C
                         Preferred Stock, or make such dividends non-cumulative,
                         or defer the date from which dividends will accrue, or
                         cancel accrued and unpaid dividends, or change the
                         relative seniority rights of the holders of Series C
                         Preferred Stock as to the payment of dividends in
                         relation to the holders of any other capital stock of
                         the Company;

                                  2. Reduce the amount payable to the holders of
                         the Series C Preferred Stock upon the voluntary or
                         involuntary liquidation, dissolution, or winding up of
                         the Company, or change the relative seniority of the
                         liquidation preferences of the holders of the Series C
                         Preferred Stock to the rights upon liquidation of the
                         holders of any other capital stock of the Company;

                                  3. Make the Series C Preferred Stock
                         redeemable at the option of the Company, except as
                         provided in Section 6 hereof.

                         B. authorize, create or issue any shares of Parity
                  Securities or Senior Securities (or amend the provisions of
                  any existing class of Capital Stock to make such class of
                  Capital Stock a class of Parity Securities or Senior
                  Securities) on any date before and excluding September 29,
                  2003, when there shall be issued and outstanding Series C
                  Preferred Stock (as defined in the Main Agreement) with an
                  aggregate Redemption Amount of at least twenty-five million
                  dollars ($25,000,000).

                  (ii) permit any Subsidiary of the Company to issue or sell, or
         obligate itself to issue or sell, except to the Company or any wholly
         owned Subsidiary, any Capital Stock of such Subsidiary; or

                  (iii) increase or decrease (other than by redemption or
         conversion) the total number of authorized shares of Preferred Stock or
         amend any provisions of any Parity Securities or Senior Securities so
         as to make such Parity Securities or Senior Securities redeemable by
         the Company.

                  (iv) Notwithstanding the foregoing, so long as the Company
         complies with the requirements of Section 6(F) of this Certificate of
         Rights and Preferences and Section 11 of the Main Agreement, with
         respect to a Business Combination, such Business Combination shall not
         be deemed to alter or change the powers, preferences or rights of the
         Series C Preferred Stock in any manner.




                                       10
<PAGE>


         6. Conversion and Redemption.

              (A) Procedure for Conversion.

                     (i) Shares of Series C Preferred Stock are convertible into
              Registered Common Stock (or, at the sole option of the Holder,
              unregistered Common Stock) at the Conversion Rate per share (in
              the event of a Restatement, for purposes of calculating the
              Conversion Rate, the Conversion Price shall equal the Restatement
              Conversion Price, if the Restatement Conversion Price is lower
              than the then-current Conversion Price) (i) at the option of the
              Holder thereof at any time, from time to time, in whole or in
              part, and (ii) at the option of the Company any time on or after
              March 29, 2004 for all but not less than all of the shares of
              Series C Preferred Stock if (x) the Average Market Price exceeds
              the Ceiling Percentage multiplied by the Conversion Price on at
              least thirty (30) consecutive Business Days and (y) the Company
              has sufficient Registered Common Stock to deliver to the Holder or
              Holders upon the closing of such conversion. The "Ceiling
              Percentage" shall initially be two hundred percent (200%) and
              shall decline by five percent (5%) (i.e., to 195%, 190%, etc.) for
              each three-month-period that passes after March 29, 2004. The
              conversion of shares of Series C Preferred Stock at the option of
              the Holder may be effected by delivering a duly executed written
              Preferred Stock Conversion Notice, in form and substance as
              attached to the Main Agreement as Annex G (the "Conversion
              Notice"), by facsimile, mail or overnight courier delivery, to the
              Company's address set forth in Section 20 of the Main Agreement.
              The closing of such exercise shall take place (a) on the second
              Business Day following and excluding the date the Conversion
              Notice is delivered, (b) such later date as the conditions set
              forth in Section 6(A)(ii) have been waived or satisfied or (c) any
              other date upon which the exercising Holder and the Company
              mutually agree (the "Conversion Closing Date"). Conversion of
              shares of Series C Preferred Stock at the option of the Company
              may be effected by delivering a duly executed written notice to
              all Holders substantially in the form attached as Annex J to the
              Main Agreement (the "Two Year Conversion Notice"), by facsimile,
              mail or overnight courier delivery, to the Holder's address set
              forth in Section 20 of the Main Agreement; the Conversion Closing
              Date shall be (a) the twenty-fifth Business Day after and
              excluding the date the Two Year Conversion Notice is delivered to
              the Holders, (b) such later date as the conditions set forth in
              Section 6(A)(ii) have been waived or satisfied or (c) any other
              date upon which the Company and the Holders mutually agree; such
              conversion shall apply to only those shares of Series C Preferred
              Stock still outstanding on such Conversion Closing Date.

                     (ii) It shall be a condition of the converting Holder's
              obligation to close that each of the following are satisfied,
              unless waived by such Holder:

                             A. (1) the representations and warranties made by
                     the Company in the Main Agreement shall be true and correct
                     as of the Conversion Closing Date, except those
                     representations and warranties that address matters only as
                     of a particular date, which shall be true and correct as of
                     such date;







                                       11
<PAGE>

                     (2) the Company shall have complied fully with all of the
                     covenants and agreements in the Main Agreement; (3) all
                     shares to be issued upon such conversion shall be
                     registered under the Securities Act, shall be freely
                     tradable and shall be duly listed and admitted to trading
                     on the New York Stock Exchange, Nasdaq National Market or
                     American Stock Exchange (unless, with respect to clause (3)
                     only, the Holder expressly consents in writing to the
                     issuance of unregistered Common Stock); and such Holder
                     shall have received a certificate of the Chief Executive
                     Officer or the Chief Financial Officer of the Company dated
                     such date and to the effect of clauses (1), (2) and (3).

                             B. On the Conversion Closing Date, the Company
                     shall have delivered to the Holder an opinion of Dykema
                     Gossett PLLC (or such other counsel reasonably satisfactory
                     to such Holder) reasonably satisfactory to such Holder,
                     dated the date of delivery, confirming in substance the
                     matters covered in paragraphs (a), (b), (c), (d), (e), (f)
                     and subsection (i) of (g) of Section 4 of the Main
                     Agreement and to the effect that the offer and sale of such
                     Registered Common Stock to such Holder hereunder do not
                     require registration under the Securities Act.

                             C. As of the Conversion Closing Date, the Company
                     shall have delivered to the Holder all Restatement Notices
                     required to be delivered following a Restatement.

         The Company shall use its commercially reasonable efforts to cause each
of the foregoing conditions to be satisfied at the earliest possible date. If
such conditions are not satisfied or waived prior to the third Business Day
following and excluding the date the Conversion Notice is delivered, then the
Holder may, at its sole option, and at any time, withdraw the Conversion Notice
by written notice to the Company regardless of whether such conditions have been
satisfied or waived as of the withdrawal date and, after such withdrawal, shall
have no further obligations with respect to such Conversion Notice and may
submit a Conversion Notice with respect to the shares referenced in the
withdrawn Conversion Notice at any time.

                  (iii) Each conversion of Series C Preferred Stock shall be
              deemed to have been effected immediately prior to the close of
              business on the Business Day on which the Conversion Notice is
              delivered as provided in Section 6(A)(i) (or, in the case of the
              Two Year Conversion Notice the related Conversion Closing Date),
              and at such time the Person or Persons in whose name or names any
              certificate or certificates for shares of Common Stock (or Other
              Securities) shall be issuable upon such conversion as provided in
              Section 6(A)(iv) shall be deemed to have become the holder or
              holders of record thereof. The foregoing notwithstanding, such
              conversion shall not be deemed effective if and as of the date
              that the Holder delivers written notice of withdrawal to the
              Company as set forth in Section 6(A)(ii) above.




                                       12
<PAGE>


                  (iv) On the Conversion Closing Date, the Holder shall
              surrender the certificate representing the shares of Series C
              Preferred Stock to be converted to the Company at the address set
              forth for notices to the Company in Section 20 of the Main
              Agreement, and such Holder shall thereupon be entitled to receive
              the number of duly authorized, validly issued, fully paid and
              nonassessable shares of Registered Common Stock (or Other
              Securities or, if appropriate, unregistered Common Stock) to which
              such Holder is entitled upon such conversion.

                  (v) On the Conversion Closing Date, the Company at its expense
              (including the payment by it of any applicable issue taxes) will
              cause to be issued in the name of and delivered to the Holder
              whose Series C Preferred Stock is being converted via book-entry
              transfer (if available to the Company), or if such Holder shall
              direct, at such address specified by the Holder via reputable
              overnight courier, one or more certificates for the number of duly
              authorized, validly issued, fully paid and nonassessable shares of
              Registered Common Stock (or Other Securities or, if appropriate,
              unregistered Common Stock) to which such Holder shall be entitled
              upon such conversion, plus, in lieu of any fractional share to
              which such Holder would otherwise be entitled, cash in an amount
              equal to the same fraction of the Daily Market Price per share on
              the Business Day immediately preceding the date of such
              conversion, and, in case such conversion is for only part of the
              shares represented by the certificate surrendered, at such address
              specified by the Holder via reputable overnight courier, a new
              Series C Preferred Stock certificate of like tenor, calling in the
              aggregate on the face or faces thereof for the number of shares of
              Series C Preferred Stock which have not been converted into
              Registered Common Stock (or Other Securities or, if appropriate,
              unregistered Common Stock) upon such conversion.

                  (vi) The Company shall deliver a Restatement Notice to the
              Holder no later than two (2) days after and excluding each
              Restatement Date.

              (B) Procedure for Redemption.

                  (i) Redemption of the Series C Preferred Stock shall occur
              under any of the following circumstances:

                         A. At any time on or after March 29, 2004, a Holder of
                  Series C Preferred Stock may require the Company to redeem any
                  or all shares of Series C Preferred Stock held by such Holder
                  by delivering an optional redemption notice to the Company
                  substantially in the form attached as Annex C to the Main
                  Agreement (a "Redemption Notice"). The date such Redemption
                  Notice is delivered shall be the "Redemption Notice Date". All
                  such redemptions shall be made for shares of Registered Common
                  Stock (unless the Holder expressly consents in writing to the
                  issuance of unregistered Common Stock) pursuant to Section
                  6(B)(iii); provided, that, if the Company satisfies the
                  conditions for cash redemption set forth in Section 6(B)(ii)
                  and elects in writing within five (5) Business Days of the
                  first Redemption Notice Date hereunder to redeem Series C
                  Preferred







                                       13
<PAGE>

                  Stock for cash, the Company shall deliver (x) the number of
                  shares of Registered Common Stock (unless the Holder expressly
                  consents in writing to the issuance of unregistered Common
                  Stock) that would have been issuable to such Holder had such
                  Holder elected on the Redemption Notice Date to convert such
                  shares of Series C Preferred Stock pursuant to Section
                  6(A)(i), in the manner provided in Section 6(B)(iii) and (y)
                  cash in the manner provided in Section 6(B)(ii) equal to the
                  product of (a) the Daily Market Price as of the Redemption
                  Notice Date times (b) the amount, if any, by which (i) the
                  number of shares of Common Stock to which such Holder would
                  otherwise be entitled to receive on the date the Company
                  elected cash redemption pursuant to Section 6(B)(ii) as if the
                  Company had elected Common Stock redemption pursuant to
                  Section 6(B)(iii) on such date exceeds (ii) the number of
                  shares of Common Stock deliverable pursuant to clause (x)
                  (such difference, the "Additional Redemption Shares"). The
                  Holder may not redeem Series B Preferred Shares (as defined in
                  the Prior Agreement) and Series C Preferred Stock with an
                  aggregate Redemption Amount greater than thirty million
                  dollars ($30 million) in any twelve-month period, provided
                  that any redemption pursuant to Section 6(B)(i)(B) of the
                  First Amended and Restated Certificate of Rights and
                  Preferences of Series B-1 Cumulative Convertible Preferred
                  Stock shall not be included for purposes of calculating such
                  aggregate Redemption Amount. In the event that the aggregate
                  value of the Common Stock and cash, if any, to be received by
                  a Holder pursuant to this Section 6(B)(i)(A) is less than the
                  amount such Holder would have received upon redemption if such
                  Holder had converted the Series C Preferred Stock subject to
                  the Redemption Notice into Common Stock in accordance with the
                  provisions of Section 6(A) hereof as of the Business Day
                  immediately preceding the Redemption Notice Date (as if the
                  Conversion Notice had been delivered on such date and the
                  Conversion Closing Date had occurred on such date), then such
                  Holder shall receive Common Stock and cash, if any, pursuant
                  to Section 6(B)(ii) or Section 6(B)(iii), as the case may be,
                  with an aggregate value equivalent to such amount in lieu of
                  the amount of Common Stock and cash, if any, that would
                  otherwise be issuable pursuant to this Section 6(B)(i)(A).

                         B. On April 2, 2009, the Company shall redeem all of
                  the Series C Preferred Stock held by all Holders. All such
                  redemptions shall be made for shares of Registered Common
                  Stock (unless the Holder expressly consents in writing to the
                  issuance of unregistered Common Stock) pursuant to Section
                  6(B)(iii), unless the Company satisfies the conditions for
                  cash redemption set forth in Section 6(B)(ii) and elects to
                  redeem such shares for cash. In the event that the aggregate
                  value of the Common Stock and cash, if any, to be received by
                  a Holder pursuant to this Section 6(B)(i)(B) is less than the
                  amount such Holder would have received upon redemption if such
                  Holder had converted all of such Holder's Series C Preferred
                  Stock into Common Stock in accordance with the provisions of






                                       14
<PAGE>

                  Section 6(A) hereof as of the Business Day immediately
                  preceding April 2, 2009 (as if the Conversion Notice had been
                  delivered on such date and the Conversion Closing Date had
                  occurred on such date), then such Holder shall receive Common
                  Stock and cash, if any, pursuant to Section 6(B)(ii) or
                  Section 6(B)(iii), as the case may be, with an aggregate value
                  equivalent to such amount in lieu of the amount of Common
                  Stock and cash, if any, that would otherwise be issuable
                  pursuant to this Section 6(B)(i)(B).

                  (ii) If the Company is permitted under the terms of its then
         outstanding credit facilities and elects in a writing substantially in
         the form attached as Annex D to the Main Agreement delivered to the
         redeeming Holder on or before the fifth Business Day following and
         excluding the date of the first Redemption Notice (or in the case of
         redemption pursuant to Section 6(B)(i)(B) by February 27, 2009 (the
         "Seven Year Redemption Reference Date")) (each such date, a "Redemption
         Reference Date") to redeem such shares for cash, then (a) such shares
         shall be redeemed for cash to the extent provided in Section 6(B)(i)(A)
         or 6(B)(i)(B), as applicable, (b) the closing of such redemption shall
         take place on the second Business Day after and excluding the end of
         the calendar quarter in which the Redemption Reference Date occurs,
         provided that if the Redemption Reference Date is less than thirty (30)
         days before and excluding the end of such calendar quarter, then such
         closing shall occur on the thirtieth (30th) day after and excluding the
         Redemption Reference Date, unless otherwise agreed in writing by the
         Company and the redeeming Holder (or in the case of a cash redemption
         pursuant to Section 6(B)(i)(B), by April 2, 2009 (each such date, a
         "Cash Redemption Closing Date") and (c) unless otherwise agreed in
         writing by the Holder and the Company, all future redemptions of Series
         C Preferred Stock under Section 6(B)(i)(A) shall be for cash to the
         extent provided in Section 6(B)(i)(A). At such closing, the Holder
         shall surrender the certificate representing the shares of Series C
         Preferred Stock to be redeemed to the Company at the address set forth
         for notices to the Company in Section 20 of the Main Agreement, and the
         Company shall deliver to the Holder via wire transfer of immediately
         available U.S. funds cash equal to the aggregate Redemption Amount of
         such shares calculated as of the Cash Redemption Closing Date. In the
         case of a cash redemption pursuant to Section 6(B)(i)(B), if the
         Company acting in good faith is unable to tender cash as provided in
         this Section 6(B)(ii) on or before the Cash Redemption Closing Date and
         certifies such circumstance in a writing signed by the Chief Executive
         Officer and the Chief Financial Officer of the Company that is
         delivered to the Holder before the Cash Redemption Closing Date, then
         (x) (without limiting any other available remedies, including without
         limitation under Section 3(F) or at law or in equity) the Company may
         redeem such shares for Registered Common Stock as set forth in Section
         6(B)(iii), (y) the Stock Redemption Closing Date shall be the
         thirty-fifth (35th) calendar day after and excluding the date on which
         the Holder receives such notice (provided that the Holder may, by
         written notice to the Company, accelerate this date to the second (2nd)
         Business Day after and excluding the date the Company receives notice
         from such Holder), and (z) the rights of the Holder under this
         Certificate of








                                       15
<PAGE>

         Rights and Preferences (other than the accrual of dividends under
         Section 3 and the right to receive consideration for redemption as set
         forth herein) shall cease as of April 2, 2009 (provided that if the
         Company fails to redeem such shares on the Stock Redemption Closing
         Date provided above, then all such rights shall be reinstated in full).
         In the case of redemptions pursuant to Section 6(B)(i)(A) only, if the
         Company fails to tender cash as provided in this Section 6(B)(ii) on or
         before the Cash Redemption Closing Date, then the Holder may, at its
         sole option (and without limiting any other available remedies,
         including without limitation under Section 3(F) or at law or in equity)
         elect to (1) withdraw the Redemption Notice by written notice to the
         Company and, after such withdrawal, shall have no further obligations
         with respect to such Redemption Notice and may submit a Redemption
         Notice with respect to the shares referenced in the withdrawn
         Redemption Notice at any time or (2) receive shares of Registered
         Common Stock as set forth in Section 6(B)(iii), in which case the Stock
         Redemption Closing Date shall be the second Business Day after and
         excluding the date on which the Holder notifies the Company in writing
         of such election. In the case of redemptions pursuant to Section
         6(B)(i)(B) only, if the Company fails to tender cash as provided in
         this Section 6(B)(ii) on or before the Cash Redemption Closing Date,
         then the Holder may, at its sole option (and without limiting any other
         available remedies, including without limitation under Section 3(F) or
         at law or in equity) elect to receive shares of Registered Common Stock
         as set forth in Section 6(B)(iii), in which case the Stock Redemption
         Closing Date shall be the second Business Day after and excluding the
         date on which the Holder notifies the Company in writing of such
         election. If such redemption is for only part of the shares represented
         by the certificate surrendered, the Company shall send a new Preferred
         Stock certificate of like tenor, calling in the aggregate on the face
         or faces thereof for the number of shares of Series C Preferred Stock
         which have not been redeemed via reputable overnight courier to such
         address specified by the Holder.

                  (iii) If the Company elects in a writing substantially in the
         form attached as Annex D to the Main Agreement delivered to the
         redeeming Holder on or before the fifth Business Day following and
         excluding the Redemption Notice Date to redeem such Additional
         Redemption Shares of Series C Preferred Stock for shares of Registered
         Common Stock (or, in the case of redemptions pursuant to Section
         6(B)(i)(B), by the Redemption Reference Date), or if the Company fails
         to timely elect cash redemption as set forth in Section 6(B)(ii), then
         (a) all such shares shall be redeemed for Registered Common Stock
         (unless the Holder expressly consents in writing to the issuance of
         unregistered Common Stock), and (b) the closing of such redemption
         shall take place on the earlier of (1) the second Business Day after
         and excluding the delivery of the Company's election and (2) the
         seventh Business Day after and excluding the Redemption Notice Date,
         (or, in the case of redemptions pursuant to Section 6(B)(i)(B), by
         April 2, 2009) or on such other date as the Company and such Holder
         agree in writing (the "Stock Redemption Closing Date") and (c) unless
         otherwise agreed in writing by the Holder and the Company, all future
         redemptions of Series C Preferred Stock shall be for Registered Common
         Stock. At such closing, the






                                       16
<PAGE>

         Holder shall surrender the certificate representing the shares of
         Series C Preferred Stock to be redeemed to the Company at the address
         set forth for notices to the Company in Section 20 of the Main
         Agreement and the Company at its expense (including the payment by it
         of any applicable issue taxes) shall cause to be issued in the name of
         and delivered to the Holder whose Series C Preferred Stock is being
         redeemed via book-entry transfer (if available to the Company), the
         number of duly authorized, validly issued, fully paid and nonassessable
         shares of Registered Common Stock (unless the Holder expressly consents
         in writing to the issuance of unregistered Common Stock in which case
         all references to Registered Common Stock in this Section 6(B)(iii)
         shall be to unregistered Common Stock, but only with respect to the
         shares of Common Stock subject to such Redemption Notice) to which such
         Holder shall be entitled upon such redemption, plus, in lieu of any
         fractional share to which such Holder would otherwise be entitled, cash
         in an amount equal to the same fraction of the Daily Market Price per
         share on the Business Day immediately preceding the Stock Redemption
         Closing Date, and, in case such redemption is for only part of the
         shares represented by the certificate surrendered, at such address
         specified by the Holder via reputable overnight courier, a new
         Preferred Stock certificate of like tenor, calling in the aggregate on
         the face thereof for the number of shares of Series C Preferred Stock
         which have not been redeemed. The number of shares of Registered Common
         Stock to be delivered at such closing shall equal the quotient of (x)
         the aggregate Redemption Amount of the shares of Series C Preferred
         Stock being redeemed (calculated as of the Stock Redemption Closing
         Date) divided by (y) the greater of (1) the lesser of (A) the Average
         Market Price calculated as of the Redemption Notice Date or the
         Redemption Reference Date, as applicable, (B) the Daily Market Price on
         the date the Company delivers its election to redeem such shares for
         Registered Common Stock and (C) if the Company fails to deliver an
         election to redeem such shares for Registered Common Stock by the fifth
         Business Day following and excluding the Redemption Notice Date or by
         the Redemption Reference Date, as applicable, the Daily Market Price on
         the fifth Business Day following and excluding the Redemption Notice
         Date or the fifth (5th) Business Day immediately preceding the Stock
         Redemption Closing Date, as applicable, and (2) in the case of
         redemptions pursuant to Section 6(B)(i)(A) only (and not in the case of
         redemption pursuant to Section 6(B)(i)(B)), an amount equal to product
         of (a) the quotient of six dollars divided by eight dollars and fifty
         cents ($6.00/$8.50) times (b) the Main Agreement Date Price. It shall
         be a condition of the redeeming Holder's obligation to close that each
         of the following are satisfied, unless waived by such Holder:

                      A. (1) the representations and warranties made by the
              Company in the Main Agreement shall be true and correct as of the
              Stock Redemption Closing Date, except that those representations
              and warranties which only address matters on a particular date
              shall only be true and correct as of such date; (2) the Company
              shall have complied fully with all of the covenants and agreements
              in the Main Agreement; (3) all shares to be issued upon such
              redemption shall be registered under the Securities Act,








                                       17
<PAGE>

              shall be freely tradable and shall be duly listed and admitted to
              trading on the New York Stock Exchange, Nasdaq National Market or
              American Stock Exchange (unless, with respect to clause (3) only,
              the Holder expressly consents in writing to the issuance of
              unregistered Common Stock); and such Holder shall have received a
              certificate of the Chief Executive Officer or the Chief Financial
              Officer of the Company dated such date and to the effect of
              clauses (1), (2) and (3).

                      B. On the Stock Redemption Closing Date, the Company shall
              have delivered to the Holder an opinion of Dykema Gossett PLLC (or
              such other counsel reasonably satisfactory to such Holder)
              reasonably satisfactory to such Holder, dated the date of
              delivery, confirming in substance the matters covered in
              paragraphs (a), (b), (c), (d), (e), (f) and subsection (i) of (g)
              of Section 4 of the Main Agreement and to the effect that the
              offer and sale of such Registered Common Stock to such Holder
              hereunder do not require registration under the Securities Act.

                      C. There shall not exist an Issuance Blockage (as defined
              in the Main Agreement) and the issuance of Common Stock shall not
              cause the Company to exceed the Maximum Number (as defined in the
              Main Agreement).

         The Company shall use its best efforts to cause each of the foregoing
         conditions to be satisfied at the earliest possible date. If such
         conditions are not satisfied or waived on or before the Stock
         Redemption Closing Date, then the Holder may, at its sole option, and
         at any time, (1) withdraw the Redemption Notice by written notice to
         the Company regardless of whether such conditions have been satisfied
         or waived as of the withdrawal date and, after such withdrawal, shall
         have no further obligations with respect to such Redemption Notice and
         may submit a Redemption Notice with respect to the shares referenced in
         the withdrawn Redemption Notice at any time or (2) elect cash
         redemption as set forth in Section 6(B)(ii), in which case, the Cash
         Redemption Closing Date shall be the second Business Day after and
         excluding the date on which the Holder notifies the Company in writing
         of its election for cash redemption to the extent permitted under the
         terms of the Company's credit facilities set forth in Champion's SEC
         Filings (as defined in the Main Agreement) made on or before the date
         of the Main Agreement and excluding any subsequent amendments or
         extensions thereto.

         (C) The Company shall at all times reserve for issuance such number of
its shares of Common Stock as shall be required under the Main Agreement.

         (D) The Company will procure, at its sole expense, the listing of the
Common Stock issuable upon conversion or redemption of the Series C Preferred
Stock and shares issuable as dividends hereunder, subject to issuance or notice
of issuance, on all stock exchanges and quotation systems on which the Common
Stock is then listed or quoted, no later than the date on which such Series C
Preferred Stock is issued to the Holder and








                                       18
<PAGE>

thereafter shall use its best efforts to prevent delisting or removal from
quotation of such shares. The Company will pay any and all documentary stamp or
similar issue or transfer taxes that may be payable in respect of the issuance
or delivery of shares of Common Stock on conversion or redemption of shares of
the Series C Preferred Stock. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involving the issue and
delivery of shares of Common Stock in a name other than that in which the shares
of Series C Preferred Stock so converted or redeemed were registered, and no
such issue and delivery shall be made unless and until the person requesting
such issue has paid to the Company the amount of any such tax, or has
established, to the reasonable satisfaction of the Company, that such tax has
been paid.

         (E) No fractional shares or scrip representing fractional shares shall
be issued upon the conversion or redemption of the Series C Preferred Stock. If
any such conversion or redemption would otherwise require the issuance of a
fractional share of Common Stock, an amount equal to such fraction multiplied by
the current Daily Market Price per share of Common Stock on the date of
conversion or redemption shall be paid to the Holder in cash by the Company. If
more than one share of Series C Preferred Stock shall be surrendered for
conversion or redemption at one time by or for the same Holder, the number of
full shares of Common Stock issuable upon conversion or redemption thereof shall
be computed on the basis of the aggregate number of shares of Series C Preferred
Stock so surrendered.

         (F) Business Combinations.

             (i) In case the Company after the date of the Main Agreement is
         party to (a) any acquisition of the Company by means of merger or other
         form of corporate reorganization in which outstanding shares of the
         Company are exchanged for securities or other consideration issued, or
         caused to be issued, by the Acquiring Person or its Parent, Subsidiary
         or affiliate, (b) a sale of all or substantially all of the assets of
         the Company (on a consolidated basis) in a single transaction or series
         of related transactions, (c) any other transaction or series of related
         transactions by the Company in which the power to cast the majority of
         the eligible votes at a meeting of the Company's shareholders at which
         directors are elected is transferred to a single entity or group acting
         in concert, or (d) a capital reorganization or reclassification of the
         Common Stock or Other Securities (other than a reorganization or
         reclassification in which the Common Stock or Other Securities are not
         converted into or exchanged for cash or other property, and,
         immediately after consummation of such transaction, the shareholders of
         the Company immediately prior to such transaction own the Common Stock,
         Other Securities or other voting stock of the Company in substantially
         the same proportions relative to each other as such shareholders owned
         immediately prior to such transaction), then, and in the case of each
         such transaction (each of which is referred to herein as "Business
         Combination"), proper provision shall be made so that, upon the basis
         and the terms and in the manner provided herein, the Holder of each
         unconverted and unredeemed share of Series C Preferred Stock, upon
         conversion or redemption hereof at any time after the consummation of
         such Business Combination, shall be entitled to receive upon such
         conversion or







                                       19
<PAGE>

         redemption, in lieu of the cash, Common Stock or Other Securities
         issuable upon such conversion or redemption prior to such consummation,
         any of the following, as shall be elected, in whole or in part, from
         time to time, by such Holder:

                      A. the stock and other securities, cash and property to
               which such Holder would have been entitled upon such consummation
               if such Holder had converted such Series C Preferred Stock
               immediately prior thereto;

                      B. the stock and other securities, cash and property to
               which such Holder would have been entitled upon such consummation
               if (i) such Holder had elected redemption of such Series C
               Preferred Stock, with the Redemption Notice Date occurring
               immediately prior thereto (notwithstanding any restrictions on
               redemption existing on such Redemption Notice Date) and (ii) the
               Company had elected to redeem such shares for Registered Common
               Stock immediately prior thereto

                      C. the number of shares of common stock of the Acquiring
               Person or its Parent, at the election of the Holder, determined
               by dividing (A) the amount equal to the product obtained by
               multiplying (1) the number of shares of the Company's Common
               Stock (or Other Securities) to which such Holder would have been
               entitled had such holder converted such Series C Preferred Stock
               immediately prior to such consummation, times (2) the greater of
               the Acquisition Price and the Conversion Price in effect on the
               Business Day immediately preceding the date of such consummation,
               by (B) the Daily Market Price per share of the common stock of
               the Acquiring Person or its Parent, as the case may be, on the
               Business Day immediately preceding the date of such consummation;

                      D. the number of shares of common stock of the Acquiring
               Person or its Parent, at the election of the Holder, determined
               by dividing (A) the aggregate Redemption Amount of such shares of
               Series C Preferred Stock by (B) the lesser of (1) the Average
               Market Price of the common stock of the Acquiring Person or its
               Parent, as the case may be, calculated as of the date the
               Business Combination is consummated, and (2) the quotient of (a)
               the product of (i) the Conversion Price (but if before such
               consummation the Company shall combine, subdivide or reclassify
               its Common Stock, shall declare any dividend payable in shares of
               Common Stock, or shall take any other action of a similar nature
               affecting such shares, this amount shall be adjusted to the
               extent appropriate to reflect such event or events) and (ii) the
               Daily Market Price per share of the common stock of the Acquiring
               Person or its Parent, as the case may be, on the Business Day
               immediately preceding the date of such consummation divided by
               (b) the Daily Market Price per share of the Company's Common
               Stock on the Business Day immediately preceding the date of such
               consummation. The foregoing notwithstanding, if the Acquiring
               Person or its Parent, as the case may be, shall combine,
               subdivide or reclassify its Common Stock, or shall declare any
               dividend payable in shares of its Common Stock, or shall







                                       20
<PAGE>

               take any other action of a similar nature affecting such shares,
               the conversion or redemption price in this clause (D) shall be
               adjusted to the extent appropriate to reflect such event,
               including appropriate adjustments to account for any such event
               that occurs during any of the measurement periods set forth in
               the previous sentence; or

                      E. cash in an amount equal to one hundred thirty-three
               percent (133%) of the aggregate Redemption Amount of such shares
               of Series C Preferred Stock;

         provided, that if the Company delivers to such Holder a written notice
         in the form of Annex K to the Main Agreement (a "Business Combination
         Restriction Notice") no later than the fifteenth (15th) calendar day
         after and excluding the date on which the proposed Business Combination
         is first publicly disclosed and no later than the fifteenth (15th)
         calendar day before and excluding the closing date of such Business
         Combination, then in lieu of clauses (A), (B), (C), (D) and (E) above
         and all other rights and preferences under this Certificate of Rights
         and Preferences, the Holder shall receive, on such closing date, in
         exchange for the shares of Series C Preferred Stock then held by such
         Holder, (1) the stock and other securities, cash and property to which
         such Holder would have been entitled upon such closing date if such
         Holder had, (a) converted such Series C Preferred Stock immediately
         prior to such closing date or (b) redeemed (notwithstanding any
         restrictions on redemption existing on such Redemption Notice Date)
         such Series C Preferred Stock effective upon such closing date,
         calculated as if the Redemption Notice Date occurred immediately prior
         to such closing date and the Company had elected to redeem such shares
         for Registered Common Stock immediately prior thereto (the selection of
         (a) or (b) shall be made by such Holder in its sole discretion by
         written notice delivered to the Company no later than the third (3rd)
         Business Day before and including such closing date; provided that such
         Holder may change such election at any time if any material change
         shall occur in (i) the closing date, (ii) the consideration deliverable
         to Common Stock holders in such Business Combination, (iii) the
         Acquisition Price, or (iv) any material term or condition of such
         Business Combination) and (2) in addition to all consideration received
         by such Holder under clause (1) above, cash equal to the product of (x)
         the aggregate Redemption Amount of such shares of Series C Preferred
         Stock multiplied by (y) the Merger Adjustment Percentage and provided
         further, that if such Holder converts or redeems shares of Series C
         Preferred Stock on or after the date of delivery of the Business
         Combination Restriction Notice and before the date of closing of such
         Business Combination, then in addition to the stock and other
         securities, cash and property that such Holder has received, or is
         entitled to receive, upon the conversion or redemption of such shares,
         such Holder shall be entitled to receive upon the date of closing of
         such Business Combination the cash amount described in clause (2) above
         (but not the stock and other securities, cash and property described in
         clause (1) above) with respect to all such previously converted or
         redeemed shares. The "Merger Adjustment Percentage" shall equal the
         product of the Merger Payment Percentage multiplied







                                       21
<PAGE>

           by a fraction the numerator of which shall be the number of days
           remaining until the seventh (7th) anniversary of the Issue Date and
           the denominator of which shall be two thousand five hundred and
           twenty (2,520); provided that the Merger Adjustment Percentage shall
           not be less than zero percent (0%). The "Merger Payment Percentage"
           shall equal (A) fifty percent (50%) minus (B) the product of (1) ten
           percent (10%) multiplied by (2) the quotient (which shall not be less
           than zero percent (0%)) of (x) the Acquisition Price in effect on the
           Business Day immediately preceding the date of such consummation
           minus the Conversion Price in effect on the Business Day immediately
           preceding the date of such consummation divided by (y) the Conversion
           Price in effect on the Business Day immediately preceding the date of
           such consummation.

                  (ii) Notwithstanding anything contained herein or in the Main
           Agreement to the contrary, the Company will not effect any Business
           Combination unless the requirements of Section 11 of the Main
           Agreement have been met and unless, prior to the consummation
           thereof, each Person (other than the Company) that may be required to
           deliver any stock, securities, cash or property upon conversion of
           Series C Preferred Stock as provided herein shall assume, by written
           instrument delivered to, and reasonably satisfactory to, the Holders
           of a Majority of the Series C Preferred Stock, (A) the obligations of
           the Company under this Certificate of Rights and Preferences (and if
           the Company shall survive the consummation of such transaction, such
           assumption shall be in addition to, and shall not release the Company
           from, any continuing obligations of the Company under this
           Certificate of Rights and Preferences) and (B) the obligation to
           deliver to the Holders of Series C Preferred Stock such shares of
           stock, securities, cash or property as, in accordance with the
           foregoing provisions of this Section 6(F), such Holders may be
           entitled to receive, and such Person shall have similarly delivered
           to such Holders an opinion of counsel for such Person, which counsel
           shall be reasonably satisfactory to Holders of a Majority of the
           Series C Preferred Stock, stating that the rights of such Holders
           under this Certificate of Rights and Preferences shall thereafter
           continue in full force and effect and the terms hereof, including,
           without limitation, all of the provisions of this Section 6(F) shall
           be applicable to the stock, securities, cash or property which such
           Person may be required to deliver upon any conversion of Preferred
           Stock or exercise of any rights pursuant hereto.

     7. Status of Converted and Redeemed Shares; Limitations on Series C
Preferred Stock. The Company shall return to the status of unauthorized and
undesignated shares of Preferred Stock each share of Series C Preferred Stock
which shall be converted, redeemed or for any other reason acquired by the
Company, and such shares thereafter may have such characteristics and
designations as the Board may determine (subject to Section 5), provided,
however, no share of Series C Preferred Stock which shall be converted, redeemed
or otherwise acquired by the Company shall thereafter be reissued, sold or
transferred by the Company as Series C Preferred Stock. Except as provided in
the Main Agreement, the Company will not issue any further shares of Series C
Preferred Stock. Except for redemptions pursuant to Section 6(B), the Company
shall have no right to redeem the shares of Series C Preferred Stock without the
consent of a Majority of the Holders.






                                       22

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>4
<FILENAME>k68735ex4-2.txt
<DESCRIPTION>FIRST AMENDED AND RESTATED CERTIFICATE OF RIGHTS
<TEXT>
<PAGE>
                                                                     EXHIBIT 4.2



                           FIRST AMENDED AND RESTATED
                      CERTIFICATE OF RIGHTS AND PREFERENCES
                                       OF
                SERIES B-1 CUMULATIVE CONVERTIBLE PREFERRED STOCK
                                       OF
                           CHAMPION ENTERPRISES, INC.

                            CERTIFICATE OF RESOLUTION


         Pursuant to Section 450.1302 of the Michigan Business Corporation Act,
CHAMPION ENTERPRISES, INC., a corporation organized and existing under the laws
of the State of Michigan, hereby certifies that the following resolution was
duly adopted by the Board of Directors of the Company on June 29, 2001, as
amended and restated by a resolution duly adopted by the Board of Directors on
March 29, 2002, pursuant to authority conferred upon the Board of Directors by
the Restated Articles of Incorporation of the Company, which authorizes the
issuance of up to Five Million (5,000,000) shares of preferred stock, no par
value.

         RESOLVED, that pursuant to authority expressly granted to and vested in
the Board of Directors of the Company and pursuant to the provisions of the
Articles of Incorporation, the Board of Directors hereby creates a series of
preferred stock, herein designated and authorized as the Series B-1 Cumulative
Convertible Preferred Stock, no par value, which shall consist of Twenty
Thousand (20,000) of the Five Million (5,000,000) shares of preferred stock
which the Company now has authority to issue, and the Board of Directors hereby
fixes the powers, designations and preferences and the relative, participating,
optional and other special rights of the shares of such series, and the
qualifications, limitations and restrictions thereof as follows:

         1. Number. The number of shares constituting the Series B-1 Cumulative
Convertible Preferred Stock shall be Twenty Thousand (20,000).

         2. Definitions. Unless the context otherwise requires, when used herein
the following terms shall have the meaning indicated.

         "Acquiring Person" means, in connection with any Business Combination,
the continuing or surviving corporation of a consolidation or merger with the
Company (if other than the Company), the transferee of all or substantially all
of the properties or assets of the Company, the corporation consolidating with
or merging into the Company in a consolidation or merger in connection with
which the Common Stock is changed into or exchanged for stock or other
securities of any other Person or cash or any other property, the entity or
group acting in concert acquiring or possessing the power to cast the majority
of the eligible votes at a meeting of the Company's shareholders at which
directors are elected, or, in the case of a capital reorganization or
reclassification, the Company.

         "Acquisition Price" means (i) the Daily Market Price of the Common
Stock on the date immediately preceding the date on which a Business Combination
is consummated, or (ii) if a purchase, tender or exchange offer is made by the
Acquiring Person (or by any of its affiliates) to the holders of the Common
Stock and such offer is accepted by the holders of more than fifty




                                       1
<PAGE>
percent (50%) of the outstanding shares of Common Stock, the greater of (x) the
price determined in accordance with the provisions of the foregoing clause (i)
of this sentence and (y) the Daily Market Price on the date immediately
preceding the acceptance of such offer by the holders of more than fifty percent
(50%) of the outstanding shares of Common Stock.

         "Articles" means the Restated Articles of Incorporation of the Company,
as amended.

         "Average Market Price" means, with respect to any reference date, the
average of the Daily Market Prices of the Common Stock for the thirty (30)
Business Days ending on and including the third Business Day before such
reference date, but not greater than the average of the Daily Market Prices of
the Common Stock for the five (5) Business Days ending on and including the
twenty-eighth Business Day before such reference date.

         "Board" means the Board of Directors of the Company.

         "Business Combination" is defined in Section 6(F)(i).

         "Business Day" means any day on which the Common Stock may be traded on
the NYSE, or if not admitted for trading on the NYSE, on any day other than a
Saturday, Sunday or holiday on which banks in New York City are required or
permitted to be closed.

         "Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated) of capital or capital stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership,
limited partnership, limited liability company or other equity interests of such
Person.

         "Cash Redemption Closing Date" is defined in Section 6(B)(ii).

         "Certificate of Rights and Preferences" means this Certificate of
Rights and Preferences of the Series B-1 Preferred Stock.

         "Common Stock" means the Company's common stock, par value one dollar
($1.00) per share, and any Capital Stock for or into which such Common Stock
hereafter is exchanged, converted, reclassified or recapitalized by the Company
or pursuant to a Business Combination to which the Company is a party.

         "Company" means Champion Enterprises, Inc., a Michigan corporation.

         "Conversion Closing Date" is defined in Section 6(A)(i).

         "Conversion Notice" is defined in Section 6(A)(i).

          "Conversion Price" means (i) until and excluding December 29, 2001,
$15.93, and (ii) on and after December 29, 2001, one hundred and twenty percent
(120%) of the Average Market Price calculated as of December 29, 2001; provided
that the Conversion Price shall not be greater than $15.93 or less than seven
dollars and fifty cents ($7.50), in each case subject to adjustment for stock
splits, recombinations, stock dividends and the like.



                                       2
<PAGE>
         "Conversion Rate" means (i) the Stated Value of one share of Series B-1
Preferred Stock plus accrued and unpaid dividends divided by (ii) the Conversion
Price.

         "Daily Market Price" means, on any date, the amount per share of the
Common Stock (or, for purposes of determining the Daily Market Price of the
common stock of an Acquiring Person or its Parent under Section 6(F), the common
stock of such Acquiring Person or such Parent), equal to (i) the daily
volume-weighted average price on the NYSE or, if no such sale takes place on
such date, the average of the closing bid and asked prices on the NYSE thereof
on such date, in each case as reported by Bloomberg, L.P. (or by such other
Person as the Holder and the Company may agree), or (ii) if such Common Stock or
common stock of an Acquiring Person or its Parent is not then listed or admitted
to trading on the NYSE, the higher of (x) the book value per share thereof as
determined by any firm of independent public accountants of recognized standing
selected by the Board of Directors of the Company as of the last day of any
month ending within sixty (60) days preceding the date as of which the
determination is to be made or (y) the fair value per share thereof determined
in good faith by the Board of Directors of the Company as of a date which is no
more than ten (10) Business Days before and excluding the date as of which the
determination is to be made.

         "Dividend Payment Date" is defined in Section 3(A).

         "Dividend Period" is defined in Section 3(A).

         "Dividend Rate" means a rate equal to five percent (5%) per annum times
the Stated Value subject to Sections 3(E) and 3(F).

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Fletcher" means Fletcher International, Ltd. a company organized under
the laws of Bermuda, together with its successors.

         "Holder" shall mean a holder of Series B-1 Preferred Stock.

         "Issue Date" means with respect to any shares of Series B-1 Preferred
Stock the original date of issuance of such shares of Series B-1 Preferred
Stock.

         "Junior Securities" means Capital Stock that, with respect to dividends
and distributions upon Liquidation, ranks junior to the Series B Preferred
Shares (as defined in the Main Agreement), including but not limited to Common
Stock, Series A Preferred Stock, and any other class or series of Capital Stock
issued by the Company or any Subsidiary of the Company on or after the date of
the Main Agreement, but excluding any Parity Securities and Senior Securities
issued (i) to Fletcher or its authorized assignees under the Main Agreement,
(ii) with the approval of the Holders of a Majority of the Series B-1 Preferred
Stock or (iii) upon the conversion, redemption or exercise of securities
described in clause (i) or (ii).

         "Liquidation" means the voluntary or involuntary liquidation,
dissolution or winding up of the Company; provided, however, that a
consolidation, merger or share exchange shall not be deemed a Liquidation, nor
shall a sale, assignment, conveyance, transfer, lease or other disposition by
the Company of all or substantially all of its assets, which does not involve a



                                       3
<PAGE>
distribution by the Company of cash or other property to the holders of Common
Stock, be deemed to be a Liquidation.

         "Liquidation Preference" is defined in Section 4.

         "Main Agreement" means the Agreement dated as of June 29, 2001, between
the Company and Fletcher pursuant to which twenty thousand (20,000) shares of
Series B-1 Preferred Stock are to be issued by the Company, including all
schedules and exhibits thereto.

         "Majority of the Series B-1 Preferred Stock" means more than fifty
percent (50%) of the then outstanding shares of Series B-1 Preferred Stock.

         "NYSE" shall have the meaning set forth in the Main Agreement.

         "Other Securities" means any stock (other than Common Stock) and other
securities of the Company or any other Person which the Holders of the Series
B-1 Preferred Stock at any time shall be entitled to receive, or shall have
received, upon conversion or redemption of the Series B-1 Preferred Stock in
lieu of or in addition to Common Stock, or which at any time shall be issuable
or shall have been issued in exchange for or in replacement of Common Stock or
Other Securities.

         "Parent" means, as to any Acquiring Person, any corporation that (i)
controls the Acquiring Person directly or indirectly through one or more
intermediaries, (ii) is required to include the Acquiring Person in the
consolidated financial statements contained in such Parent's Annual Report on
Form 10-K (if the Parent is required to file such a report) and (iii) is not
itself included in the consolidated financial statements of any other Person
(other than its consolidated subsidiaries).

         "Parity Securities" means any class or series of Capital Stock that,
with respect to dividends or distributions upon Liquidation, is pari passu with
the Series B-1 Preferred Stock including the Series C Preferred Stock and the
Series B Preferred Shares (as defined in the Main Agreement).

         "Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, limited liability company, joint
venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.

         "Preferred Stock" means the Company's preferred stock authorized
pursuant to the provisions of the Articles.

         "Record Date" is defined in Section 3(A).

         "Redemption Amount" means a dollar amount for each share of the
then-outstanding Series B-1 Preferred Stock redeemed by such Holder equal to the
Stated Value per share plus an amount equal to all accrued but unpaid dividends
thereon, whether or not earnings are available in respect of such dividends or
such dividends have been declared, to and including the date full payment is
tendered to the Holders with respect to such redemption.



                                       4
<PAGE>
         "Redemption Notice" is defined in Section 6(B)(i).

         "Redemption Notice Date" is defined in Section 6(B)(i).

         "Registered Common Stock" means Common Stock that has been registered
under the Securities Act and is freely tradable.

         "Restatement" means that Champion adversely restates net income or
shareholders' equity, in any material respect, in any portion of its financial
statements as included in a Form 10-K or Form 10-Q filed with the Securities and
Exchange Commission in the form of an amendment thereto, press release, Form 8-K
or any other method except as is required as a result of a change occurring
after the date of the Main Agreement in (i) applicable law or (ii) generally
accepted accounting principles promulgated by the Financial Accounting Standards
Board or the Securities and Exchange Commission, which change is implemented by
the Company in the manner and at the time prescribed by such law or such
generally accepted accounting principle.

         "Restatement Conversion Price" means one hundred twenty percent (120%)
of the Average Market Price calculated on the date ninety (90) days after and
excluding the Restatement Date.

         "Restatement Date" means the most recent date on which a Restatement
occurs.

         "Restatement Notice" means a written notice from Champion to Fletcher,
(i) stating the Restatement Date and (ii) including the documents in which the
Restatement was publicly disclosed.

         "Securities Act" means the Securities Act of 1933, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.

         "Senior Securities" means any class or series of Capital Stock that,
with respect to dividends or distributions upon Liquidation, ranks senior to the
Series B-1 Preferred Stock.

         "Series A Preferred Stock" means the Series A Preferred Stock of the
Company, the powers, designations, preferences and relative, participating,
optional and other special rights of which are specified in the Articles.

         "Series B-1 Preferred Stock" means the Series B-1 Cumulative
Convertible Preferred Stock of the Company or successor as contemplated by
Section 6(F)(ii).

         "Series C Preferred Stock" means the Series C Cumulative Convertible
Preferred Stock of the Company or successor.

         "Series C Preferred Stock Agreement" means the Agreement by and between
the Company and Fletcher International, Ltd. dated as of March 29, 2002 relating
to the sale of Series C Preferred Stock and a warrant.

         "Stated Value" is an amount equal to one thousand dollars ($1,000) per
share of Series B-1 Preferred Stock.

                                       5
<PAGE>
         "Stock Redemption Closing Date" is defined in Section 6(B)(iii).

         "Subsidiary" of a Person means (i) a corporation, a majority of whose
stock with voting power, under ordinary circumstances, to elect directors is at
the time of determination, directly or indirectly, owned by such Person or by
one or more Subsidiaries of such Person, or (ii) any other entity (other than a
corporation) in which such Person or one or more Subsidiaries of such Person,
directly or indirectly, at the date of determination thereof has a least a
majority ownership interest.

         The foregoing definitions will be equally applicable to both the
singular and plural forms of the defined terms.

         3. Dividends and Distributions.

                  (A) Holders shall be entitled to receive out of the assets of
         the Company legally available for that purpose, dividends at the
         Dividend Rate to be paid in accordance with the terms of this Section
         3. Such dividends shall be fully cumulative from the Issue Date, shall
         accumulate regardless of whether the Company earns a profit and shall
         be payable in arrears, when and as declared by the Board, on March 31,
         June 30, September 30 and December 31 of each year (each such date
         being herein referred to as a "Dividend Payment Date"), commencing on
         September 30, 2001. The period from the Issue Date to September 30,
         2001, and each quarterly period between consecutive Dividend Payment
         Dates shall hereinafter be referred to as a "Dividend Period." The
         dividend for any Dividend Period for any share of Series B-1 Preferred
         Stock that is not outstanding on every day of the Dividend Period shall
         be prorated based on the number of days such share was outstanding
         during the period. Each such dividend shall be paid to the Holders of
         record as their names appear on the share register of the Company on
         the corresponding Record Date. As used above, the term "Record Date"
         means, with respect to the dividend payable on March 31, June 30,
         September 30 and December 31, respectively, of each year, the preceding
         March 15, June 15, September 15 and December 15, or such other record
         date designated by the Board with respect to the dividend payable on
         such respective Dividend Payment Date not exceeding thirty (30) days
         preceding such Dividend Payment Date. Dividends on account of arrears
         for any past Dividend Periods may be declared and paid at any time,
         without reference to any Dividend Payment Date, to Holders of record on
         a date designated by the Board, not exceeding thirty (30) days
         preceding the payment date thereof, as may be fixed by the Board. For
         purposes of determining the amount of dividends accrued as of the first
         Dividend Payment Date and as of any date that is not a Dividend Payment
         Date, such amount shall be calculated on the basis of the Dividend Rate
         for the actual number of days elapsed from and including the Issue Date
         (in case of the first Dividend Payment Date and any date prior to the
         first Dividend Payment Date) or the last preceding Dividend Payment
         Date (in case of any other date) to the date as of which such
         determination is to be made, based on a three hundred sixty (360) day
         year.

                  (B) Dividends payable on the Series B-1 Preferred Stock may be
         paid, at the option of the Company, either in cash or by the issuance
         of Registered Common Stock, provided, however, that the Company's right
         to pay dividends on any Dividend Payment





                                       6
<PAGE>
         Date by the issuance of Registered Common Stock shall continue only so
         long as the number of shares of Common Stock issued and issuable under
         the Main Agreement (including one year of dividends from such Dividend
         Payment Date, assuming that all such dividends will be paid in shares
         of Common Stock as they accrue) and all previously issued and issuable
         shares of Common Stock and all issued and issuable but unconverted
         Series B Preferred Shares (as defined in the Main Agreement) (on an
         as-converted basis as of that date) does not exceed seventeen and
         one-half percent (17.5%) of the Original Number (as defined in the Main
         Agreement), or, if such number of shares exceeds seventeen and one-half
         percent (17.5%) of the Original Number and does not exceed nineteen and
         ninety-nine one-hundredths percent (19.99%) of the Original Number, the
         Company has notified its shareholders of a shareholder's meeting for
         the purpose of voting on a Required Consent (as defined in the Main
         Agreement) in accordance with the Main Agreement and has used and is
         using its best efforts to obtain the Required Consent. Although it is
         the intent and view of the Company that the issuance of Common Stock
         with respect to Series B Preferred Shares (as defined in the Main
         Agreement) is to be treated as independent of any issuance of Common
         Stock with respect to Series C Preferred Stock, in the event any such
         issuances of Common Stock are deemed to be related pursuant to the
         listing requirements and rules of the NYSE by the NYSE, the provisions
         of this Section 3(B) (including, but not limited to, the obligation to
         obtain the Required Consent) shall be deemed to apply to the number of
         shares of Common Stock in the aggregate issued and issuable with
         respect to both the Series B Preferred Shares (as defined in the Main
         Agreement) and the Series C Preferred Stock. Subject to the foregoing,
         payments on any Dividend Payment Date shall be made in Registered
         Common Stock unless the Company notifies the Holders in writing of its
         intention to pay cash on or before, but no more than fifteen (15) days
         before, and including, the immediately preceding Dividend Payment Date.
         The number of shares of Registered Common Stock to be issued shall be
         determined by dividing the cash amount of the dividend otherwise
         payable by the Average Market Price calculated as of such Dividend
         Payment Date; provided, however, if the Company shall combine,
         subdivide or reclassify its Common Stock, or shall declare any dividend
         payable in shares of its Common Stock, or shall take any other action
         of a similar nature affecting such shares, the number of shares of
         Registered Common Stock to be issued shall be adjusted to the extent
         appropriate to reflect such event, including appropriate adjustments to
         account for any such event that occurs during the period used for
         calculating such Average Market Price. The number of shares of
         Registered Common Stock to be issued as a dividend shall be rounded up
         to the nearest whole share after aggregating all shares of Series B-1
         Preferred Stock owned by a Holder.

                  (C) If, on any Dividend Payment Date, the Company fails to pay
         dividends, then until the dividends that were scheduled to be paid on
         such date are paid, such dividends shall cumulate and shall accrue
         additional dividends to and including the date of payment thereof at
         the Dividend Rate then in effect, compounded quarterly on each
         subsequent Dividend Payment Date. Unpaid dividends for any period less
         than a full Dividend Period shall cumulate on a day to day basis and
         shall be computed on the basis of a three hundred sixty (360) day year.



                                       7
<PAGE>
                  (D) So long as any shares of the Series B-1 Preferred Stock
         shall be outstanding, (i) the Company shall not and shall not allow its
         Subsidiaries to declare or pay any dividend whatsoever, whether in
         cash, property or otherwise, set aside any cash or property for the
         payment of dividends, or make any other distribution on any Junior
         Securities, (ii) the Company shall not and shall not allow its
         Subsidiaries to declare or pay any dividend whatsoever, whether in
         cash, property or otherwise, set aside any cash or property for the
         payment of dividends, or make any other distribution on any Parity
         Securities, except for dividends paid to the Company or any of its
         wholly-owned Subsidiaries and dividends paid on the Series B Preferred
         Shares (as defined in the Main Agreement) and the dividends paid on the
         Series C Preferred Stock and (iii) the Company shall not and shall not
         allow its Subsidiaries to repurchase, redeem or otherwise acquire for
         value or set aside any cash or property for the repurchase or
         redemption of any Junior Securities or Parity Securities, unless in
         each such case (x) all dividends to which the Holders of the Series B-1
         Preferred Stock shall have been entitled to receive for all previous
         Dividend Periods shall have been paid and dividends for the subsequent
         four Dividend Periods shall have been designated and set aside and (y)
         a dividend (including the amount of any dividends paid pursuant to the
         provisions of Section 3(A)) is paid with respect to all outstanding
         shares of Series B-1 Preferred Stock in an amount for each such share
         of Series B-1 Preferred Stock equal to the aggregate amount of such
         dividend for the number of shares of Common Stock equal to (i) the
         Stated Value plus any accrued but unpaid dividends as of the record
         date of such dividend divided by (ii) the Conversion Price (or in the
         event of a Restatement, the Restatement Conversion Price, if the
         Restatement Conversion Price is lower than the then-current Conversion
         Price) on such record date (or, if such record date is not a Business
         Day, the last Business Day preceding such record date).

                  (E) Whenever, at any time or times, dividends payable on any
         Series B Preferred Share (as defined in the Main Agreement) or any
         share of Series C Preferred Stock shall be in arrears in an aggregate
         amount greater than two (2) quarterly dividends, the Dividend Rate
         shall mean a rate equal to fifteen percent (15%) per annum times the
         Stated Value until such date that all accrued and unpaid dividends
         shall have been declared and paid in full.

                  (F) Whenever, at any time or times (i) an Issuance Blockage
         (as defined in the Main Agreement or in the Series C Preferred Stock
         Agreement) shall exist at any time ninety (90) calendar days after and
         excluding the date of the first Excess Rights Notice (as defined in the
         Main Agreement or in the Series C Preferred Stock Agreement) or (ii)
         the Company shall fail to redeem any Series B Preferred Shares (as
         defined in the Main Agreement) or any shares of Series C Preferred
         Stock for cash by the date it is obligated to do so under Section 6(B)
         hereof or under Section 6(B) of any Subsequent Certificates of Rights
         and Preferences (as defined in the Main Agreement) or the Certificate
         of Rights and Preferences of the Series C Preferred and such failure to
         pay cash is ongoing, then (x) the Dividend Rate shall mean a rate equal
         to fifteen percent (15%) per annum times the Stated Value until such
         date as the circumstances described in clause (i) and (ii) no longer
         exist and (y) all dividends payable with respect to such periods shall
         be paid in additional shares of Series B-1 Preferred Stock.



                                       8
<PAGE>
         4. Liquidation Preference. In the event of any Liquidation, after
payment or provision for payment by the Company of the debts and other
liabilities of the Company and the liquidation preference of any Senior
Securities that rank senior to the Series B-1 Preferred Stock with respect to
distributions upon Liquidation, each Holder shall be entitled to receive an
amount in cash for each share of the then outstanding Series B-1 Preferred Stock
held by such Holder equal to the greater of (a) the Stated Value per share plus
an amount equal to all accrued but unpaid dividends thereon, whether or not
earnings are available in respect of such dividends or such dividends have been
declared, to and including the date full payment is tendered to the Holders with
respect to such Liquidation and no more and (b) the amount the Holders would
have received if the Holders had converted all outstanding shares of Series B-1
Preferred Stock into Common Stock in accordance with the provisions of Section
6(A) hereof as of the Business Day immediately preceding the date of such
Liquidation (such greater amount being referred to herein as the "Liquidation
Preference"), before any distribution shall be made to the holders of any Junior
Securities (and any Senior Securities or Parity Securities that, with respect to
distributions upon Liquidation, rank junior to the Series B-1 Preferred Stock)
upon the Liquidation of the Company. In case the assets of the Company available
for payment to the Holders are insufficient to pay the full Liquidation
Preference on all outstanding shares of the Series B-1 Preferred Stock and all
outstanding shares of Parity Securities and Senior Securities that, with respect
to distributions upon Liquidation, are pari passu with the Series B-1 Preferred
Stock in the amounts to which the holders of such shares are entitled, then the
entire assets of the Company available for payment to the Holders and to the
holders of such Parity Securities and Senior Securities shall be distributed
ratably among the Holders of the Series B-1 Preferred Stock and the holders of
such Parity Securities and Senior Securities, based upon the aggregate amount
due on such shares upon Liquidation. Written notice of any Liquidation of the
Company, stating a payment date and the place where the distributable amounts
shall be payable, shall be given by facsimile and overnight delivery not less
than ten (10) days prior to the payment date stated therein, to the Holders of
record of the Series B-1 Preferred Stock, if any, at their respective addresses
as the same shall appear on the books of the Company.

         5. Voting Rights. The Holders shall have the following voting rights
with respect to the Series B-1 Preferred Stock:

                  (A)      Each share of Series B-1 Preferred Stock shall
         entitle the holder thereof to the voting rights specified in Section
         5(B) and no other voting rights except as required by law.

                  (B)      The consent of the Holders of at least a Majority of
         the Series B-1 Preferred Stock, voting separately as a single class
         with one vote per share, in person or by proxy, either in writing
         without a meeting or at an annual or a special meeting of such Holders
         called for the purpose, shall be necessary to:

                           (i)      amend, alter or repeal any of the provisions
                  of the Articles, including the Certificate of Rights and
                  Preferences, or Bylaws of the Company so as to:



                                       9
<PAGE>
                                    A. change any of the rights, preferences or
                           privileges of Holders. Without limiting the
                           generality of the preceding sentence, such change
                           includes any action that would:

                                             1. Reduce the Dividend Rate on the
                                    Series B-1 Preferred Stock, or make such
                                    dividends non-cumulative, or defer the date
                                    from which dividends will accrue, or cancel
                                    accrued and unpaid dividends, or change the
                                    relative seniority rights of the holders of
                                    Series B-1 Preferred Stock as to the payment
                                    of dividends in relation to the holders of
                                    any other capital stock of the Company;

                                             2. Reduce the amount payable to the
                                    holders of the Series B-1 Preferred Stock
                                    upon the voluntary or involuntary
                                    liquidation, dissolution, or winding up of
                                    the Company, or change the relative
                                    seniority of the liquidation preferences of
                                    the holders of the Series B-1 Preferred
                                    Stock to the rights upon liquidation of the
                                    holders of any other capital stock of the
                                    Company;

                                             3. Make the Series B-1 Preferred
                                    Stock redeemable at the option of the
                                    Company, except as provided in Section 6
                                    hereof.

                                    B. authorize, create or issue any shares of
                           Parity Securities or Senior Securities (or amend the
                           provisions of any existing class of Capital Stock to
                           make such class of Capital Stock a class of Parity
                           Securities or Senior Securities) on any date before
                           and excluding January 4, 2003, when there shall be
                           issued and outstanding Series B Preferred Shares (as
                           defined in the Main Agreement) with an aggregate
                           Redemption Amount of at least twenty million dollars
                           ($20,000,000).

                           (ii) permit any Subsidiary of the Company to issue or
                  sell, or obligate itself to issue or sell, except to the
                  Company or any wholly owned Subsidiary, any Capital Stock of
                  such Subsidiary; or

                           (iii) increase or decrease (other than by redemption
                  or conversion) the total number of authorized shares of
                  Preferred Stock or amend any provisions of any Parity
                  Securities or Senior Securities so as to make such Parity
                  Securities or Senior Securities redeemable by the Company.

                           (iv) Notwithstanding the foregoing, so long as the
                  Company complies with the requirements of Section 6(F) of this
                  Certificate of Rights and Preferences and Section 11 of the
                  Main Agreement, with respect to a Business Combination, such
                  Business Combination shall not be deemed to alter or change
                  the powers, preferences or rights of the Series B-1 Preferred
                  Stock in any manner.

         6. Conversion and Redemption.

                  (A)      Procedure for Conversion.

                                       10
<PAGE>
                           (i)      Shares of Series B-1 Preferred Stock are
                  convertible into Registered Common Stock (or, at the sole
                  option of the Holder, unregistered Common Stock) at the
                  Conversion Rate per share (in the event of a Restatement, for
                  purposes of calculating the Conversion Rate, the Conversion
                  Price shall equal the Restatement Conversion Price, if the
                  Restatement Conversion Price is lower than the then-current
                  Conversion Price) at the option of the Holder thereof at any
                  time, from time to time, in whole or in part. The conversion
                  of shares of Series B-1 Preferred Stock at the option of the
                  Holder may be effected by delivering a duly executed written
                  Preferred Stock Conversion Notice, in form and substance as
                  attached to the Main Agreement as Annex G (the "Conversion
                  Notice"), by facsimile, mail or overnight courier delivery, to
                  the Company's address set forth in Section 20 of the Main
                  Agreement. The closing of such exercise shall take place (a)
                  on the second Business Day following and excluding the date
                  the Conversion Notice is delivered, (b) such later date as the
                  conditions set forth in Section 6(A)(ii) have been waived or
                  satisfied or (c) any other date upon which the exercising
                  Holder and the Company mutually agree (the "Conversion Closing
                  Date").

                           (ii)     It shall be a condition of the converting
                  Holder's obligation to close that each of the following are
                  satisfied, unless waived by such Holder:

                                    A. (1) the representations and warranties
                           made by the Company in the Main Agreement shall be
                           true and correct as of the Conversion Closing Date,
                           except those representations and warranties that
                           address matters only as of a particular date, which
                           shall be true and correct as of such date; (2) the
                           Company shall have complied fully with all of the
                           covenants and agreements in the Main Agreement; (3)
                           all shares to be issued upon such conversion shall be
                           registered under the Securities Act, shall be freely
                           tradable and shall be duly listed and admitted to
                           trading on the New York Stock Exchange, Nasdaq
                           National Market or American Stock Exchange (unless,
                           with respect to clause (3) only, the Holder expressly
                           consents in writing to the issuance of unregistered
                           Common Stock); and such Holder shall have received a
                           certificate of the Chief Executive Officer or the
                           Chief Financial Officer of the Company dated such
                           date and to the effect of clauses (1), (2) and (3).

                                    B. On the Conversion Closing Date, the
                           Company shall have delivered to the Holder an opinion
                           of Dykema Gossett PLLC (or such other counsel
                           reasonably satisfactory to such Holder) reasonably
                           satisfactory to such Holder, dated the date of
                           delivery, confirming in substance the matters covered
                           in paragraphs (a), (b), (c), (d), (e), (f) and
                           subsection (i) of (g) of Section 4 of the Main
                           Agreement and to the effect that the offer and sale
                           of such Registered Common Stock to such Holder
                           hereunder do not require registration under the
                           Securities Act.



                                       11
<PAGE>
                                    C. As of the Conversion Closing Date, the
                           Company shall have delivered to the Holder all
                           Restatement Notices required to be delivered
                           following a Restatement.

         The Company shall use its commercially reasonable efforts to cause each
of the foregoing conditions to be satisfied at the earliest possible date. If
such conditions are not satisfied or waived prior to the third Business Day
following and excluding the date the Conversion Notice is delivered, then the
Holder may, at its sole option, and at any time, withdraw the Conversion Notice
by written notice to the Company regardless of whether such conditions have been
satisfied or waived as of the withdrawal date and, after such withdrawal, shall
have no further obligations with respect to such Conversion Notice and may
submit a Conversion Notice with respect to the shares referenced in the
withdrawn Conversion Notice at any time.

                           (iii) Each conversion of Series B-1 Preferred Stock
                  shall be deemed to have been effected immediately prior to the
                  close of business on the Business Day on which the Conversion
                  Notice is delivered as provided in Section 6(A)(i), and at
                  such time the Person or Persons in whose name or names any
                  certificate or certificates for shares of Common Stock (or
                  Other Securities) shall be issuable upon such conversion as
                  provided in Section 6(A)(iv) shall be deemed to have become
                  the holder or holders of record thereof. The foregoing
                  notwithstanding, such conversion shall not be deemed effective
                  if and as of the date that the Holder delivers written notice
                  of withdrawal to the Company as set forth in Section 6(A)(ii)
                  above.

                           (iv) On the Conversion Closing Date, the Holder shall
                  surrender the certificate representing the shares of Series
                  B-1 Preferred Stock to be converted to the Company at the
                  address set forth for notices to the Company in Section 20 of
                  the Main Agreement, and such Holder shall thereupon be
                  entitled to receive the number of duly authorized, validly
                  issued, fully paid and nonassessable shares of Registered
                  Common Stock (or Other Securities or, if appropriate,
                  unregistered Common Stock) to which such Holder is entitled
                  upon such conversion.

                           (v) On the Conversion Closing Date, the Company at
                  its expense (including the payment by it of any applicable
                  issue taxes) will cause to be issued in the name of and
                  delivered to the Holder whose Series B-1 Preferred Stock is
                  being converted via book-entry transfer (if available to the
                  Company), or if such Holder shall direct, at such address
                  specified by the Holder via reputable overnight courier, one
                  or more certificates for the number of duly authorized,
                  validly issued, fully paid and nonassessable shares of
                  Registered Common Stock (or Other Securities or, if
                  appropriate, unregistered Common Stock) to which such Holder
                  shall be entitled upon such conversion, plus, in lieu of any
                  fractional share to which such Holder would otherwise be
                  entitled, cash in an amount equal to the same fraction of the
                  Daily Market Price per share on the Business Day immediately
                  preceding the date of such conversion, and, in case such
                  conversion is for only part of the shares represented by the
                  certificate surrendered, at such address specified by the
                  Holder via reputable overnight courier, a new Preferred




                                       12
<PAGE>
                  Stock certificate of like tenor, calling in the aggregate on
                  the face or faces thereof for the number of shares of Series
                  B-1 Preferred Stock which have not been converted into
                  Registered Common Stock (or Other Securities or, if
                  appropriate, unregistered Common Stock) upon such conversion.

                           (vi) The Company shall deliver a Restatement Notice
                  to the Holder no later than two (2) days after and excluding
                  each Restatement Date.

         (B)      Procedure for Redemption.

                  (i)         Redemption of the Series B-1 Preferred Stock shall
         occur under any of the following circumstances:

                           A. At any time on or after the Initial Closing Date
                  (as defined in the Series C Preferred Stock Agreement), a
                  Holder of Series B-1 Preferred Stock may require the Company
                  to redeem any or all shares of Series B-1 Preferred Stock held
                  by such Holder by delivering an optional redemption notice to
                  the Company substantially in the form attached as Annex C to
                  the Main Agreement (a "Redemption Notice"). The date such
                  Redemption Notice is delivered shall be the "Redemption Notice
                  Date". All such redemptions shall be made for shares of
                  Registered Common Stock (unless the Holder expressly consents
                  in writing to the issuance of unregistered Common Stock)
                  pursuant to Section 6(B)(iii). The Holder may not redeem
                  Series B Preferred Shares (as defined in the Main Agreement)
                  and Series C Preferred Stock with an aggregate Redemption
                  Amount greater than thirty million dollars ($30 million) in
                  any twelve-month period. In the event that the aggregate value
                  of the Common Stock to be received by a Holder pursuant to
                  this Section 6(B)(i)(A) is less than the amount such Holder
                  would have received upon redemption if such Holder had
                  converted the Series B-1 Preferred Stock subject to the
                  Redemption Notice into Common Stock in accordance with the
                  provisions of Section 6(A) hereof as of the Business Day
                  immediately preceding the Redemption Notice Date (as if the
                  Conversion Notice had been delivered on such date and the
                  Conversion Closing Date had occurred on such date), then such
                  Holder shall receive Common Stock with an aggregate value
                  equivalent to such amount in lieu of the amount of Common
                  Stock that would otherwise be issuable pursuant to this
                  Section 6(B)(i)(A).

                           B. On March 29, 2004, the Company shall redeem all of
                  the Series B-1 Preferred Stock held by all Holders. All such
                  redemptions shall be made for shares of Registered Common
                  Stock (unless the Holder expressly consents in writing to the
                  issuance of unregistered Common Stock) pursuant to Section
                  6(B)(iii), unless the Company satisfies the conditions for
                  cash redemption set forth in Section 6(B)(ii) and elects to
                  redeem such shares for cash. In the event that the aggregate
                  value of the Common Stock and cash, if any, to be received by
                  a Holder pursuant to this Section 6(B)(i)(B) is less than the
                  amount such Holder would have





                                       13
<PAGE>
                  received upon redemption if such Holder had converted all of
                  such Holder's Series B-1 Preferred Stock into Common Stock in
                  accordance with the provisions of Section 6(A) hereof as of
                  the Business Day immediately preceding March 29, 2004 (as if
                  the Conversion Notice had been delivered on such date and the
                  Conversion Closing Date had occurred on such date), then such
                  Holder shall receive Common Stock and cash, if any, pursuant
                  to Section 6(B)(ii) or Section 6(B)(iii), as the case may be,
                  with an aggregate value equivalent to such amount in lieu of
                  the amount of Common Stock and cash, if any, that would
                  otherwise be issuable pursuant to this Section 6(B)(i)(B).

                  (ii) In connection with a redemption under Section 6(B)(i)(B),
         if the Company is permitted under the terms of its then outstanding
         credit facilities and elects in a writing substantially in the form
         attached as Annex D to the Main Agreement delivered to the redeeming
         Holder on or before February 23, 2004 (the "Redemption Reference Date")
         to redeem such shares for cash, then (a) such shares shall be redeemed
         for cash, (b) the closing of such redemption shall take place on the
         second Business Day after and excluding the end of the calendar quarter
         in which the Redemption Reference Date occurs, provided that if the
         Redemption Reference Date is less than thirty (30) days before and
         excluding the end of such calendar quarter, then such closing shall
         occur on the thirtieth (30th) day after and excluding the Redemption
         Reference Date, unless otherwise agreed in writing by the Company and
         the redeeming Holder (or, in the case of a cash redemption pursuant to
         Section 6(B)(i)(B), by March 29, 2004) (each such date, a "Cash
         Redemption Closing Date") and (c) unless otherwise agreed in writing by
         the Holder and the Company, all future redemptions of Series B-1
         Preferred Stock shall be for cash. At such closing, the Holder shall
         surrender the certificate representing the shares of Series B-1
         Preferred Stock to be redeemed to the Company at the address set forth
         for notices to the Company in Section 20 of the Main Agreement, and the
         Company shall deliver to the Holder via wire transfer of immediately
         available U.S. funds cash equal to the aggregate Redemption Amount of
         such shares calculated as of the Cash Redemption Closing Date. In the
         case of a cash redemption pursuant to Section 6(B)(i)(B), if the
         Company acting in good faith is unable to tender cash as provided in
         this Section 6(B)(ii) on or before the Cash Redemption Closing Date and
         certifies such circumstance in a writing signed by the Chief Executive
         Officer and the Chief Financial Officer of the Company that is
         delivered to the Holder before the Cash Redemption Closing Date, then
         (x) (without limiting any other available remedies, including without
         limitation under Section 3(F) or at law or in equity) the Company may
         redeem such shares for Registered Common Stock as set forth in Section
         6(B)(iii), (y) the Stock Redemption Closing Date shall be the
         thirty-fifth (35th) calendar day after and excluding the date on which
         the Holder receives such notice (provided that the Holder may, by
         written notice to the Company, accelerate this date to the second (2nd)
         Business Day after and excluding the date the Company receives notice
         from such Holder), and (z) the rights of the Holder under this
         Certificate of Rights and Preferences (other than the accrual of
         dividends under Section 3 and the right to receive consideration for
         redemption as set forth herein) shall cease as





                                       14
<PAGE>
         of March 29, 2004 (provided that if the Company fails to redeem such
         shares on the Stock Redemption Closing Date provided above, then all
         such rights shall be reinstated in full). In the case of redemptions
         pursuant to Section 6(B)(i)(A) only, if the Company fails to tender
         cash as provided in this Section 6(B)(ii) on or before the Cash
         Redemption Closing Date, then the Holder may, at its sole option (and
         without limiting any other available remedies, including without
         limitation under Section 3(F) or at law or in equity) elect to (1)
         withdraw the Redemption Notice by written notice to the Company and,
         after such withdrawal, shall have no further obligations with respect
         to such Redemption Notice and may submit a Redemption Notice with
         respect to the shares referenced in the withdrawn Redemption Notice at
         any time or (2) receive shares of Registered Common Stock as set forth
         in Section 6(B)(iii), in which case the Stock Redemption Closing Date
         shall be the second Business Day after and excluding the date on which
         the Holder notifies the Company in writing of such election. In the
         case of redemptions pursuant to Section 6(B)(i)(B) only, if the Company
         fails to tender cash as provided in this Section 6(B)(ii) on or before
         the Cash Redemption Closing Date, then the Holder may, at its sole
         option (and without limiting any other available remedies, including
         without limitation under Section 3(F) or at law or in equity) elect to
         receive shares of Registered Common Stock as set forth in Section
         6(B)(iii), in which case the Stock Redemption Closing Date shall be the
         second Business Day after and excluding the date on which the Holder
         notifies the Company in writing of such election. If such redemption is
         for only part of the shares represented by the certificate surrendered,
         the Company shall send a new Preferred Stock certificate of like tenor,
         calling in the aggregate on the face or faces thereof for the number of
         shares of Series B-1 Preferred Stock which have not been redeemed via
         reputable overnight courier to such address specified by the Holder.

                  (iii) If the Holder elects to redeem pursuant to Section
         6(B)(i)(A) hereof or if the Company fails to timely elect cash
         redemption as set forth in Section 6(B)(ii), then (a) all such shares
         shall be redeemed for Registered Common Stock (unless the Holder
         expressly consents in writing to the issuance of unregistered Common
         Stock), and (b) the closing of such redemption shall take place on, in
         the case of a redemption pursuant to Section 6(B)(i)(A), the seventh
         Business Day after and excluding the Redemption Notice Date, or, in the
         case of a redemption pursuant to Section 6(B)(i)(B), on March 29, 2004,
         or in either case on such other date as the Company and such Holder
         agree in writing (the "Stock Redemption Closing Date"). At such
         closing, the Holder shall surrender the certificate representing the
         shares of Series B-1 Preferred Stock to be redeemed to the Company at
         the address set forth for notices to the Company in Section 20 of the
         Main Agreement and the Company at its expense (including the payment by
         it of any applicable issue taxes) shall cause to be issued in the name
         of and delivered to the Holder whose Series B-1 Preferred Stock is
         being redeemed via book-entry transfer (if available to the Company),
         the number of duly authorized, validly issued, fully paid and
         nonassessable shares of Registered Common Stock (unless the Holder
         expressly consents in writing to the issuance of unregistered Common
         Stock in which case all references to Registered Common Stock in this



                                       15
<PAGE>
         Section 6(B)(iii) shall be to unregistered Common Stock, but only with
         respect to the shares of Common Stock subject to such Redemption
         Notice) to which such Holder shall be entitled upon such redemption,
         plus, in lieu of any fractional share to which such Holder would
         otherwise be entitled, cash in an amount equal to the same fraction of
         the Daily Market Price per share on the Business Day immediately
         preceding the Stock Redemption Closing Date, and, in case such
         redemption is for only part of the shares represented by the
         certificate surrendered, at such address specified by the Holder via
         reputable overnight courier, a new Preferred Stock certificate of like
         tenor, calling in the aggregate on the face thereof for the number of
         shares of Series B-1 Preferred Stock which have not been redeemed. The
         number of shares of Registered Common Stock to be delivered at such
         closing shall equal the quotient of (x) the aggregate Redemption Amount
         of the shares of Series B-1 Preferred Stock being redeemed (calculated
         as of the Stock Redemption Closing Date) divided by (y) the greater of
         (1) the lesser of (A) the Average Market Price calculated as of the
         Redemption Notice Date or the Redemption Reference Date, as applicable,
         (B) in the case of elections pursuant to Section 6(B)(i)(B) only (and
         not in the case of elections pursuant to Section 6(B)(i)(A)), if the
         Company fails to deliver an election to redeem such shares for cash by
         the Redemption Reference Date, the Daily Market Price on the fifth
         (5th) Business Day immediately preceding the Stock Redemption Closing
         Date and (2) in the case of redemptions pursuant to Section 6(B)(i)(A)
         only (and not in case of redemption pursuant to Section 6(B)(i)(B)), an
         amount equal to the product of (a) the quotient of six dollars divided
         by eight dollars and fifty cents ($6.00/$8.50) times (b) the Main
         Agreement Date Price (as defined in the Certificate of Rights and
         Preferences of Series C Cumulative Convertible Preferred Stock). It
         shall be a condition of the redeeming Holder's obligation to close that
         each of the following are satisfied, unless waived by such Holder:

                           A. (1) the representations and warranties made by the
                  Company in the Main Agreement shall be true and correct as of
                  the Stock Redemption Closing Date, except that those
                  representations and warranties which only address matters on a
                  particular date shall only be true and correct as of such
                  date; (2) the Company shall have complied fully with all of
                  the covenants and agreements in the Main Agreement; (3) all
                  shares to be issued upon such redemption shall be registered
                  under the Securities Act, shall be freely tradable and shall
                  be duly listed and admitted to trading on the New York Stock
                  Exchange, Nasdaq National Market or American Stock Exchange
                  (unless, with respect to clause (3) only, the Holder expressly
                  consents in writing to the issuance of unregistered Common
                  Stock); and such Holder shall have received a certificate of
                  the Chief Executive Officer or the Chief Financial Officer of
                  the Company dated such date and to the effect of clauses (1),
                  (2) and (3).

                           B. On the Stock Redemption Closing Date, the Company
                  shall have delivered to the Holder an opinion of Dykema
                  Gossett PLLC (or such other counsel reasonably satisfactory to
                  such Holder) reasonably satisfactory to such Holder, dated the
                  date of delivery, confirming in




                                       16
<PAGE>
                  substance the matters covered in paragraphs (a), (b), (c),
                  (d), (e), (f) and subsection (i) of (g) of Section 4 of the
                  Main Agreement and to the effect that the offer and sale of
                  such Registered Common Stock to such Holder hereunder do not
                  require registration under the Securities Act.

                           C. There shall not exist an Issuance Blockage (as
                  defined in the Main Agreement) and the issuance of Common
                  Stock shall not cause the Company to exceed the Maximum Number
                  (as defined in the Main Agreement).

         The Company shall use its best efforts to cause each of the foregoing
         conditions to be satisfied at the earliest possible date. If such
         conditions are not satisfied or waived on or before the Stock
         Redemption Closing Date, then the Holder may, at its sole option, and
         at any time, (1) withdraw the Redemption Notice by written notice to
         the Company regardless of whether such conditions have been satisfied
         or waived as of the withdrawal date and, after such withdrawal, shall
         have no further obligations with respect to such Redemption Notice and
         may submit a Redemption Notice with respect to the shares referenced in
         the withdrawn Redemption Notice at any time or (2) elect cash
         redemption as set forth in Section 6(B)(ii), in which case, the Cash
         Redemption Closing Date shall be the second Business Day after and
         excluding the date on which the Holder notifies the Company in writing
         of its election for cash redemption to the extent permitted under the
         terms of the Company's credit facilities set forth in Champion's SEC
         Filings (as defined in the Main Agreement) made on or before the date
         of the Main Agreement and excluding any subsequent amendments or
         extensions thereto.

         (C)      The Company shall at all times reserve for issuance such
number of its shares of Common Stock as shall be required under the Main
Agreement.

         (D)      The Company will procure, at its sole expense, the listing of
the Common Stock issuable upon conversion or redemption of the Series B-1
Preferred Stock and shares issuable as dividends hereunder, subject to issuance
or notice of issuance, on all stock exchanges and quotation systems on which the
Common Stock is then listed or quoted, no later than the date on which such
Series B-1 Preferred Stock is issued to the Holder and thereafter shall use its
best efforts to prevent delisting or removal from quotation of such shares. The
Company will pay any and all documentary stamp or similar issue or transfer
taxes that may be payable in respect of the issuance or delivery of shares of
Common Stock on conversion or redemption of shares of the Series B-1 Preferred
Stock. The Company shall not, however, be required to pay any tax which may be
payable in respect of any transfer involving the issue and delivery of shares of
Common Stock in a name other than that in which the shares of Series B-1
Preferred Stock so converted or redeemed were registered, and no such issue and
delivery shall be made unless and until the person requesting such issue has
paid to the Company the amount of any such tax, or has established, to the
reasonable satisfaction of the Company, that such tax has been paid.

                                       17
<PAGE>
         (E)      No fractional shares or scrip representing fractional shares
shall be issued upon the conversion or redemption of the Series B-1 Preferred
Stock. If any such conversion or redemption would otherwise require the issuance
of a fractional share of Common Stock, an amount equal to such fraction
multiplied by the current Daily Market Price per share of Common Stock on the
date of conversion or redemption shall be paid to the Holder in cash by the
Company. If more than one share of Series B-1 Preferred Stock shall be
surrendered for conversion or redemption at one time by or for the same Holder,
the number of full shares of Common Stock issuable upon conversion or redemption
thereof shall be computed on the basis of the aggregate number of shares of
Series B-1 Preferred Stock so surrendered.

         (F)      Business Combinations.

                  (i)           In case the Company after the date of the Main
         Agreement is party to (a) any acquisition of the Company by means of
         merger or other form of corporate reorganization in which outstanding
         shares of the Company are exchanged for securities or other
         consideration issued, or caused to be issued, by the Acquiring Person
         or its Parent, Subsidiary or affiliate, (b) a sale of all or
         substantially all of the assets of the Company (on a consolidated
         basis) in a single transaction or series of related transactions, (c)
         any other transaction or series of related transactions by the Company
         in which the power to cast the majority of the eligible votes at a
         meeting of the Company's shareholders at which directors are elected is
         transferred to a single entity or group acting in concert, or (d) a
         capital reorganization or reclassification of the Common Stock or Other
         Securities (other than a reorganization or reclassification in which
         the Common Stock or Other Securities are not converted into or
         exchanged for cash or other property, and, immediately after
         consummation of such transaction, the shareholders of the Company
         immediately prior to such transaction own the Common Stock, Other
         Securities or other voting stock of the Company in substantially the
         same proportions relative to each other as such shareholders owned
         immediately prior to such transaction), then, and in the case of each
         such transaction (each of which is referred to herein as "Business
         Combination"), proper provision shall be made so that, upon the basis
         and the terms and in the manner provided herein, the Holder of each
         unconverted and unredeemed share of Series B-1 Preferred Stock, upon
         conversion or redemption hereof at any time after the consummation of
         such Business Combination, shall be entitled to receive upon such
         conversion or redemption, in lieu of the cash, Common Stock or Other
         Securities issuable upon such conversion or redemption prior to such
         consummation, any of the following, as shall be elected, in whole or in
         part, from time to time, by such Holder:

                           A. the stock and other securities, cash and property
                  to which such Holder would have been entitled upon such
                  consummation if such Holder had converted such Series B-1
                  Preferred Stock immediately prior thereto;

                           B. the stock and other securities, cash and property
                  to which such Holder would have been entitled upon such
                  consummation if (i) such Holder had elected redemption of such
                  Series B-1 Preferred Stock, with




                                       18
<PAGE>

                  the Redemption Notice Date occurring immediately prior thereto
                  (notwithstanding any restrictions on redemption existing on
                  such Redemption Notice Date) and (ii) the Company had elected
                  to redeem such shares for Registered Common Stock immediately
                  prior thereto

                           C. the number of shares of common stock of the
                  Acquiring Person or its Parent, at the election of the Holder,
                  determined by dividing (A) the amount equal to the product
                  obtained by multiplying (1) the number of shares of the
                  Company's Common Stock (or Other Securities) to which such
                  Holder would have been entitled had such holder converted such
                  Series B-1 Preferred Stock immediately prior to such
                  consummation, times (2) the greater of the Acquisition Price
                  and the Conversion Price in effect on the Business Day
                  immediately preceding the date of such consummation, by (B)
                  the Daily Market Price per share of the common stock of the
                  Acquiring Person or its Parent, as the case may be, on the
                  Business Day immediately preceding the date of such
                  consummation;

                           D. the number of shares of common stock of the
                  Acquiring Person or its Parent, at the election of the Holder,
                  determined by dividing (A) the aggregate Redemption Amount of
                  such shares of Series B-1 Preferred Stock by (B) the lesser of
                  (1) the Average Market Price of the common stock of the
                  Acquiring Person or its Parent, as the case may be, calculated
                  as of the date the Business Combination is consummated, and
                  (2) the quotient of (a) the product of (i) the Conversion
                  Price (but if before such consummation the Company shall
                  combine, subdivide or reclassify its Common Stock, shall
                  declare any dividend payable in shares of Common Stock, or
                  shall take any other action of a similar nature affecting such
                  shares, this amount shall be adjusted to the extent
                  appropriate to reflect such event or events) and (ii) the
                  Daily Market Price per share of the common stock of the
                  Acquiring Person or its Parent, as the case may be, on the
                  Business Day immediately preceding the date of such
                  consummation divided by (b) the Daily Market Price per share
                  of the Company's Common Stock on the Business Day immediately
                  preceding the date of such consummation. The foregoing
                  notwithstanding, if the Acquiring Person or its Parent, as the
                  case may be, shall combine, subdivide or reclassify its Common
                  Stock, or shall declare any dividend payable in shares of its
                  Common Stock, or shall take any other action of a similar
                  nature affecting such shares, the conversion or redemption
                  price in this clause (D) shall be adjusted to the extent
                  appropriate to reflect such event, including appropriate
                  adjustments to account for any such event that occurs during
                  any of the measurement periods set forth in the previous
                  sentence; or

                           E. cash in an amount equal to one hundred
                  thirty-three percent (133%) of the aggregate Redemption Amount
                  of such shares of Series B-1 Preferred Stock;

                                       19
<PAGE>
                  provided, that if the Company delivers to such Holder a
                  written notice in the form of Annex K to the Main Agreement (a
                  "Business Combination Restriction Notice") no later than the
                  fifteenth (15th) calendar day after and excluding the date on
                  which the proposed Business Combination is first publicly
                  disclosed and no later than the fifteenth (15th) calendar day
                  before and excluding the closing date of such Business
                  Combination, then in lieu of clauses (A), (B), (C), (D) and
                  (E) above and all other rights and preferences under this
                  Certificate of Rights and Preferences, the Holder shall
                  receive, on such closing date, in exchange for the shares of
                  Series B-1 Preferred Stock then held by such Holder, (1) the
                  stock and other securities, cash and property to which such
                  Holder would have been entitled upon such closing date if such
                  Holder had, (a) converted such Series B-1 Preferred Stock
                  immediately prior to such closing date or (b) redeemed
                  (notwithstanding any restrictions on redemption existing on
                  such Redemption Notice Date) such Series B-1 Preferred Stock
                  effective upon such closing date, calculated as if the
                  Redemption Notice Date occurred immediately prior to such
                  closing date and the Company had elected to redeem such shares
                  for Registered Common Stock immediately prior thereto (the
                  selection of (a) or (b) shall be made by such Holder in its
                  sole discretion by written notice delivered to the Company no
                  later than the third (3rd) Business Day before and including
                  such closing date; provided that such Holder may change such
                  election at any time if any material change shall occur in (i)
                  the closing date, (ii) the consideration deliverable to Common
                  Stock holders in such Business Combination, (iii) the
                  Acquisition Price, or (iv) any material term or condition of
                  such Business Combination) and (2) in addition to all
                  consideration received by such Holder under clause (1) above,
                  cash equal to the product of (x) the aggregate Redemption
                  Amount of such shares of Series B-1 Preferred Stock multiplied
                  by (y) the Merger Adjustment Percentage and provided further,
                  that if such Holder converts or redeems shares of Series B-1
                  Preferred Stock on or after the date of delivery of the
                  Business Combination Restriction Notice and before the date of
                  closing of such Business Combination, then in addition to the
                  stock and other securities, cash and property that such Holder
                  has received, or is entitled to receive, upon the conversion
                  or redemption of such shares, such Holder shall be entitled to
                  receive upon the date of closing of such Business Combination
                  the cash amount described in clause (2) above (but not the
                  stock and other securities, cash and property described in
                  clause (1) above) with respect to all such previously
                  converted or redeemed shares. The "Merger Adjustment
                  Percentage" shall equal the product of the Merger Payment
                  Percentage multiplied by a fraction the numerator of which
                  shall be the number of days remaining until the seventh (7th)
                  anniversary of the Issue Date and the denominator of which
                  shall be two thousand five hundred and twenty (2,520);
                  provided that the Merger Adjustment Percentage shall not be
                  less than zero percent (0%). The "Merger Payment Percentage"
                  shall equal (A) fifty percent (50%) minus (B) the product of
                  (1) ten percent (10%) multiplied by (2) the quotient (which
                  shall not be less than zero percent (0%)) of (x) the
                  Acquisition Price in effect on the Business Day immediately
                  preceding the date of such consummation minus the Conversion
                  Price in effect on the Business Day immediately preceding the
                  date of such consummation divided by (y) the


                                       20
<PAGE>
                  Conversion Price in effect on the Business Day immediately
                  preceding the date of such consummation.

                           (ii) Notwithstanding anything contained herein or in
                  the Main Agreement to the contrary, the Company will not
                  effect any Business Combination unless the requirements of
                  Section 11 of the Main Agreement have been met and unless,
                  prior to the consummation thereof, each Person (other than the
                  Company) that may be required to deliver any stock,
                  securities, cash or property upon conversion of Series B-1
                  Preferred Stock as provided herein shall assume, by written
                  instrument delivered to, and reasonably satisfactory to, the
                  Holders of a Majority of the Series B-1 Preferred Stock, (A)
                  the obligations of the Company under this Certificate of
                  Rights and Preferences (and if the Company shall survive the
                  consummation of such transaction, such assumption shall be in
                  addition to, and shall not release the Company from, any
                  continuing obligations of the Company under this Certificate
                  of Rights and Preferences) and (B) the obligation to deliver
                  to the Holders of Series B-1 Preferred Stock such shares of
                  stock, securities, cash or property as, in accordance with the
                  foregoing provisions of this Section 6(F), such Holders may be
                  entitled to receive, and such Person shall have similarly
                  delivered to such Holders an opinion of counsel for such
                  Person, which counsel shall be reasonably satisfactory to
                  Holders of a Majority of the Series B-1 Preferred Stock,
                  stating that the rights of such Holders under this Certificate
                  of Rights and Preferences shall thereafter continue in full
                  force and effect and the terms hereof, including, without
                  limitation, all of the provisions of this Section 6(F) shall
                  be applicable to the stock, securities, cash or property which
                  such Person may be required to deliver upon any conversion of
                  Preferred Stock or exercise of any rights pursuant hereto.

         7. Status of Converted and Redeemed Shares; Limitations on Series B-1
Preferred Stock. The Company shall return to the status of unauthorized and
undesignated shares of Preferred Stock each share of Series B-1 Preferred Stock
which shall be converted, redeemed or for any other reason acquired by the
Company, and such shares thereafter may have such characteristics and
designations as the Board may determine (subject to Section 5), provided,
however, no share of Series B-1 Preferred Stock which shall be converted,
redeemed or otherwise acquired by the Company shall thereafter be reissued, sold
or transferred by the Company as Series B-1 Preferred Stock. The Company will
not issue any further shares of Series B-1 Preferred Stock. Except for
redemptions pursuant to Section 6(B), the Company shall have no right to redeem
the shares of Series B-1 Preferred Stock without the consent of a Majority of
the Holders.



                                       21

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.3
<SEQUENCE>5
<FILENAME>k68735ex4-3.txt
<DESCRIPTION>WARRANT CERTIFICATE DATED AS OF APRIL 2, 2002
<TEXT>
<PAGE>
                                                                     EXHIBIT 4.3







                           CHAMPION ENTERPRISES, INC.



                               WARRANT CERTIFICATE




                            DATED AS OF APRIL 2, 2002


<PAGE>





WARRANT NO. W-1                             1,082,720 SHARES OF COMMON STOCK,
                                            SUBJECT TO ADJUSTMENT


                               WARRANT CERTIFICATE

                           CHAMPION ENTERPRISES, INC.

                  Champion Enterprises, Inc. (the "Issuer"), a Michigan
corporation, for value received, hereby certifies that Fletcher International,
Ltd., or registered assigns, is entitled to purchase from the Issuer the
Issuable Number of duly authorized, validly issued, fully paid and
non-assessable shares (subject to the net exercise provisions and the
adjustments contained in this Warrant and in the Agreement between Fletcher
International, Ltd. and the Issuer dated as of March 29, 2002 (the "Main
Agreement")) of common stock, par value one dollar ($1.00) per share (the
"Common Stock") of the Issuer on a net exercise basis as set forth in Section
1.1(a) at any time or from time to time prior to 6:30 p.m., New York City time,
on April 2, 2009 (or such later date as may be determined pursuant to the terms
hereof) (the "Termination Date"), all subject to the terms, conditions and
adjustments set forth below in this Warrant.

                  This Warrant was issued on April 2, 2002 (the "Issuance Date")
pursuant to the Main Agreement, is subject to the terms and conditions thereof
and the holder of this Warrant (the "Holder") is subject to certain restrictions
set forth in the Main Agreement and shall be entitled to certain rights and
privileges set forth in the Main Agreement. This Warrant is the Warrant referred
to as the "Warrant" in the Main Agreement. Capitalized terms used but not
otherwise defined herein shall have the meanings ascribed to them in the Main
Agreement. A copy of the Main Agreement may be obtained by the registered Holder
hereof upon written request to the Issuer.

1.       Exercise of Warrant.

         1.1 Manner of Exercise. This Warrant may be exercised by the Holder
hereof, in whole or in part, but not for less than 250,000 shares of Common
Stock appearing on the face of this Warrant at a time (or such lesser number of
shares which may then constitute the maximum number purchasable), at any time
and from time to time, on any Business Day, by facsimile, mail or overnight
courier delivery of a notice in substantially the form attached to this Warrant
(or a reasonable facsimile thereof) duly executed by such Holder (a "Warrant
Exercise Notice"). The closing of each exercise shall take place (i) on the
second (2nd) Business Day following, and excluding, the date the Warrant
Exercise Notice is delivered (the "Warrant Notice Date"), (ii) at the option of
the Holder, such later date as the conditions set forth in Section 1.2 have been
waived or satisfied or (iii) any other date upon which the exercising Holder and
the Issuer mutually agree (each, a "Warrant Closing Date") unless the Holder
shall have withdrawn the Warrant Exercise Notice prior to the closing of such
exercise on such Warrant Closing Date by written notice to the Issuer regardless
of whether such conditions have been waived or satisfied.



<PAGE>


                  (a) This Warrant may be exercised on a net exercise basis
         only. The number of shares of Common Stock that the Issuer shall issue
         shall be computed as of the date of the Warrant Exercise Notice using
         the following formula:

                               X = (N*Y/B)*(A-B)/A

                           Where:

                           X = the number of shares to be issued to the Holder
                           hereof;

                           N = the number of shares on the face of this
                           Warrant, not to exceed in the aggregate the
                           Issuable Number, for which this Warrant is
                           being exercised as specified in the Warrant
                           Exercise Notice;

                           Y = the Stock Purchase Price;

                           A = the Daily Market Price of one share of
                           the Common Stock issuable at the date of
                           such calculation; and

                           B = the Warrant Price (as defined below) (as
                           adjusted to the date of such calculation).

         1.2 Conditions to Closing. It shall be a condition of the exercising
Holder's obligation to close on each Warrant Closing Date that each of the
following are satisfied, unless waived by such Holder:

                  (a) (1) the representations and warranties made by the Issuer
         in the Main Agreement shall be true and correct as of such Warrant
         Closing Date, except those representations and warranties that address
         matters only as of a particular date, which shall be true and correct
         as of such date; (2) the Issuer shall have complied fully with all of
         the covenants and agreements in the Main Agreement; (3) all shares to
         be issued upon such exercise shall be registered under the Securities
         Act in accordance with the terms of the Main Agreement, shall be freely
         tradable Registered Common Stock and shall be duly listed and admitted
         to trading on the New York Stock Exchange, American Stock Exchange or
         Nasdaq National Market System in accordance with the terms of the Main
         Agreement (unless, with respect to clause (3) only, the Holder
         expressly consents in writing to the issuance of unregistered Common
         Stock for a portion or all of the shares to be issued upon such
         exercise; in such case, the Issuer shall use its best efforts to cause
         to be satisfied this condition in clause (3) for the balance of shares
         to be issued upon such exercise); and such Holder shall have received a
         certificate of the Chief Executive Officer or the Chief Financial
         Officer of the Issuer dated such date and to the effect of clauses (1),
         (2) and (3).

                  (b) On such Warrant Closing Date, the Issuer shall have
         delivered to the Holder an opinion of Dykema Gossett PLLC (or such
         other counsel reasonably






                                       2
<PAGE>
         satisfactory to such Holder) reasonably satisfactory to such Holder,
         dated the date of delivery, confirming in substance the matters covered
         in paragraphs (a), (b), (c), (d), (e), (f), and subsection (i) of (g)
         of Section 4 of the Main Agreement and to the effect that the offer and
         sale of such Registered Common Stock (as defined below) to such Holder
         do not require registration under the Securities Act.

                  (c) The issuance of Common Stock shall not cause the Issuer to
         exceed the Maximum Number (as defined in the Main Agreement).

                  (d) As of such Warrant Closing Date, the Issuer shall have
         delivered to the Holder all Restatement Notices required to be
         delivered following a Restatement, and no Restatement shall have
         occurred on or after the date on which the Warrant Exercise Notice is
         delivered.

The Issuer shall use its best efforts to cause each of the foregoing conditions
to be satisfied at the earliest possible date. If the condition set forth above
in paragraph (a)(3) of this Section 1.2 is not satisfied, (x) Holder shall be
entitled to all remedies available at law or in equity in respect of the
Issuer's failure to issue all of the Registered Common Stock required to be
issued pursuant to this Section 1, and (y) the Issuer, upon the written demand,
from time to time, of Holder, shall issue unregistered Common Stock for a
portion or all of the shares of Common Stock to be issued as set forth in such
written demand and shall use its best efforts to cause such condition to be
satisfied. In such cases, upon satisfaction of the condition set forth in the
above paragraph (a)(3), the Issuer shall deliver written notice to such Holder
of such satisfaction. If such condition is not satisfied or waived prior to the
second (2nd) Business Day following, and excluding, the date the Warrant
Exercise Notice is delivered, then (x) the Holder may, at its sole option, and
at any time, withdraw the Warrant Exercise Notice by written notice to the
Issuer regardless of whether such condition has been satisfied or waived as of
the withdrawal date and, after such withdrawal, shall have no further
obligations with respect to such Warrant Exercise Notice and may submit a
Warrant Exercise Notice on any future date with respect to the shares referenced
in the original Warrant Exercise Notice; provided, however, that if Holder shall
not have withdrawn a Warrant Exercise Notice by written notice delivered by the
corresponding Warrant Closing Date, then the Issuer shall place in escrow by 5
p.m., New York City time, on such Warrant Closing Date an amount of cash equal
to one hundred four percent (104%) of the product of (x) the number of shares of
Registered Common Stock due under this Section 1 multiplied by (y) the Daily
Market Price calculated as of such Warrant Notice Date. If such condition is not
satisfied within sixty (60) calendar days after and including such Warrant
Closing Date, the Issuer shall cause the escrow agent to deliver such cash to
Holder in lieu of the Issuer 's obligations to issue stock upon such exercise of
the Warrant; provided, however, that the Holder shall not be obligated to pay
any consideration to exercise the Warrant in order to receive the cash payment
specified immediately above; provided, further, however, that this Warrant shall
be deemed exercised with respect to such number of shares of Registered Common
Stock as was the subject of such Warrant Exercise Notice and due to be issued
under this Section 1.

         1.3 When Exercise Effective. Each exercise of this Warrant shall be
deemed to have been effected immediately prior to 6:30 p.m. (time in effect in
New York City on such date) on the Business Day on which the Warrant Exercise
Notice is delivered as provided in Section 1.1, and at such time the Person or
Persons in whose name or names any certificate or certificates









                                       3
<PAGE>

for shares of Common Stock (or Other Securities) shall be issuable upon such
exercise as provided in Section 1.4 shall be deemed to have become the Holder or
Holders of record thereof; provided, however, that such exercise shall not be
deemed effective if at or prior to 6:30 p.m. (time in effect in New York City on
such date) on the Warrant Closing Date the Holder delivers written notice of
withdrawal to the Issuer as set forth in Section 1.2.

         1.4      Delivery of Warrant. On the Warrant Closing Date, the
registered Holder shall surrender this Warrant Certificate to the Issuer at the
address set forth for notices to the Issuer in Section 20 of the Main Agreement
and such Holder shall thereupon be entitled to receive the number of duly
authorized, validly issued, fully paid and nonassessable shares of Common Stock
(or Other Securities) determined as provided in Section 1.1 hereof.

         1.5      Delivery of Stock Certificates, etc. On a Warrant Closing
Date, the Issuer at its expense (including the payment by it of any applicable
issue taxes) shall cause to be issued in the name of and delivered to the Holder
hereof or as such Holder may direct,

                  (a) via facsimile and at such address specified by the Holder
         via a reputable overnight courier, a delivery notice in the form of
         Exhibit 2 hereto and one or more certificates for the number of duly
         authorized, validly issued, fully paid and nonassessable shares of
         Common Stock (or Other Securities) to which such Holder shall be
         entitled upon such exercise plus, in lieu of any fractional share to
         which such Holder would otherwise be entitled, cash in an amount equal
         to the same fraction of the Daily Market Price per share on the
         Business Day next preceding the date of such exercise, and

                  (b) in case such exercise is in part only, at such address
         specified by the Holder via reputable overnight courier, a new Warrant
         of like tenor, calling in the aggregate on the face or faces thereof
         for the number of shares of Common Stock equal (without giving effect
         to any adjustment thereof) to the number of such shares called for on
         the face of this Warrant minus the number of such shares designated by
         the Holder in the Warrant Exercise Notice upon such exercise as
         provided in Section 1.1.

2.       Adjustment of Common Stock Issuable Upon Exercise.

         2.1      General; Warrant Price. Until the expiration of the
90-Business-Day period used in calculating the 90-Day Price, the "Warrant Price"
shall initially equal the Stock Purchase Price described in Section 12.21(a),
$12.0369, subject to adjustment and readjustment as provided in Sections 2, 3
and 4 hereof. Immediately following the expiration of the 90-Business-Day period
used in calculating the 90-Day Price, the "Warrant Price" shall initially equal
the Stock Purchase Price described in Section 12.21(b), subject to adjustment
and readjustment as provided in Sections 2, 3 and 4 for events occurring on or
before such date. The Warrant Price shall thereafter be adjusted and readjusted
from time to time as provided in Sections 2, 3 and 4 hereof and, as so adjusted
or readjusted, shall remain in effect until a further adjustment or readjustment
thereof is required by Sections 2, 3 and 4 hereof. Additionally, the Warrant
Price shall increase by seventy-five cents ($0.75) on each anniversary of the
date of the Main Agreement and each such increase shall be adjusted and
readjusted as if such increase had occurred on the date of the Main Agreement
and had subsequently been adjusted and readjusted as provided in Sections 2, 3
and 4 hereof.





                                       4
<PAGE>
              2.2     Adjustment of Warrant Price.

                     (a) Issuance of Additional Shares of Common Stock. In case
              the Issuer at any time or from time to time after the date hereof
              shall issue or sell Additional Shares of Common Stock (including
              Additional Shares of Common Stock deemed to be issued pursuant to
              Section 2.3 or 2.4) without consideration or for a consideration
              per share less than the Warrant Price in effect immediately prior
              to such issue or sale, then, and in each such case, subject to
              Section 2.8, such Warrant Price shall be reduced, concurrently
              with such issue or sale, to a price (calculated to the nearest
              .001 of a cent) determined by multiplying such Warrant Price by a
              fraction;

                         (i) the numerator of which shall be (1) the number of
                  shares of Common Stock outstanding immediately prior to such
                  issue or sale (on a fully-diluted basis calculated using the
                  treasury method in accordance with generally accepted
                  accounting principles) plus (2) the number of shares of Common
                  Stock which the aggregate consideration received or to be
                  received by the Issuer for the total number of such Additional
                  Shares of Common Stock so issued or sold would purchase at
                  such Warrant Price, and

                         (ii) the denominator of which shall be the number of
                  shares of Common Stock outstanding immediately after such
                  issue or sale (on a fully-diluted basis calculated using the
                  treasury method in accordance with generally accepted
                  accounting principles),

                  provided that, for the purposes of this Section 2.2(a) (x)
                  immediately after any Additional Shares of Common Stock are
                  deemed to have been issued pursuant to Section 2.3 or 2.4,
                  such Additional Shares of Common Stock shall be deemed to be
                  outstanding, and (y) treasury shares shall not be deemed to be
                  outstanding.

                  (b)      Dividends and Distributions. In case the Issuer at
              any time or from time to time after the date hereof shall declare,
              order, pay or make a dividend or other distribution (including,
              without limitation, any distribution of other or additional stock
              or other securities or property or Options by way of dividend or
              spin-off, reclassification, recapitalization or similar corporate
              rearrangement) on the Common Stock, other than a dividend payable
              in Additional Shares of Common Stock, then, subject to Section
              2.8, provision shall be made so that the Holder shall receive upon
              exercise hereof in addition to the number of shares of Common
              Stock receivable thereupon, the kind and amount of securities,
              cash or other property which the Holder would have been entitled
              to receive had the Holder held the Gross Number of shares of
              Common Stock with respect to such exercise on the date of such
              dividend record date and had the Holder thereafter, during the
              period from the date of such dividend to and including the date of
              exercise, retained such securities, cash or other property
              receivable by the Holder as aforesaid during such period, giving
              application to all adjustments called for during such period under
              this Warrant.




                                       5
<PAGE>


         2.3 Treatment of Options and Convertible Securities. In case the Issuer
at any time or from time to time after the date hereof shall issue, sell, grant
or assume, or shall fix a record date for the determination of Holders of any
class of securities entitled to receive, any Options or Convertible Securities
(other than Options or Convertible Securities that constitute Excluded
Securities), then, and in each such case, the maximum number of Additional
Shares of Common Stock (as set forth in the instrument relating thereto, without
regard to any provisions contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or, in the case of
Convertible Securities and Options therefor, the conversion or exchange of such
Convertible Securities, shall be deemed to be Additional Shares of Common Stock
issued as of the time of such issue, sale, grant or assumption or, in case such
a record date shall have been fixed, as of the close of business on such record
date (or, in the case of Options or Convertible Securities with terms described
in Section 2.3(b), the date of any change, increase or decrease described in
Section 2.3(b)) (or, if the Common Stock trades on an ex-dividend basis, on the
date prior to the commencement of ex-dividend trading), provided that such
Additional Shares of Common Stock shall not be deemed to have been issued unless
the consideration per share (determined pursuant to Section 2.5) of such shares
would be less than the Warrant Price in effect on the date of and immediately
prior to such issue, sale, grant or assumption or immediately prior to the close
of business on such record date (or, if the Common Stock trades on an
ex-dividend basis, on the date prior to the commencement of ex-dividend
trading), as the case may be, and provided, further, that in any such case in
which Additional Shares of Common Stock are deemed to be issued

                  (a) no further adjustment of the Warrant Price shall be made
         upon the subsequent issue or sale of Convertible Securities or shares
         of Common Stock upon the exercise of such Options or the conversion or
         exchange of such Convertible Securities;

                  (b) if such Options or Convertible Securities by their terms
         provide, with the passage of time or otherwise, for any change in the
         consideration payable to the Issuer, or increase or decrease in the
         number of Additional Shares of Common Stock issuable, upon the
         exercise, conversion or exchange thereof (by change of rate or
         otherwise), the Warrant Price computed upon the original issue, sale,
         grant or assumption thereof (or upon the occurrence of the record date,
         or date prior to the commencement of ex-dividend trading, as the case
         may be, with respect thereto), and any subsequent adjustments based
         thereon, shall, upon any such increase or decrease becoming effective,
         be recomputed to reflect such increase or decrease insofar as it
         affects such Options, or the rights of conversion or exchange under
         such Convertible Securities, which are outstanding at such time;

                  (c) upon the expiration (or purchase by the Issuer and
         cancellation or retirement) of any such Options which shall not have
         been exercised or the expiration of any rights of conversion or
         exchange under any such Convertible Securities which (or purchase by
         the Issuer and cancellation or retirement of any such Convertible
         Securities the rights of conversion or exchange under which) shall not
         have been exercised, the Warrant Price computed upon the original
         issue, sale, grant or assumption thereof (or upon the occurrence of the
         record date, or date prior to the commencement of ex-dividend trading,
         as the case may be, with respect thereto), and any subsequent






                                       6
<PAGE>

         adjustments based thereon, shall, upon such expiration (or such
         purchase by the Issuer and cancellation or retirement, as the case may
         be), be recomputed as if:

                          (i) in the case of Options for Common Stock or
                   Convertible Securities, the only Additional Shares of Common
                   Stock issued or sold were the Additional Shares of Common
                   Stock, if any, actually issued or sold upon the exercise of
                   such Options or the conversion or exchange of such
                   Convertible Securities and the consideration received
                   therefor was the consideration actually received by the
                   Issuer for the issue, sale, grant or assumption of all such
                   Options, whether or not exercised, plus the consideration
                   actually received by the Issuer upon such exercise, or for
                   the issue or sale of all such Convertible Securities which
                   were actually converted or exchanged, plus the additional
                   consideration, if any, actually received by the Issuer upon
                   such conversion or exchange, and

                          (ii) in the case of Options for Convertible
                   Securities, only the Convertible Securities, if any, actually
                   issued or sold upon the exercise of such Options were issued
                   at the time of the issue, sale, grant or assumption of such
                   Options, and the consideration received by the Issuer for the
                   Additional Shares of Common Stock deemed to have then been
                   issued was the consideration actually received by the Issuer
                   for the issue, sale, grant or assumption of all such Options,
                   whether or not exercised, plus the consideration deemed to
                   have been received by the Issuer (pursuant to Section 2.5)
                   upon the issue or sale of such Convertible Securities with
                   respect to which such Options were actually exercised;

                  (d) no readjustment pursuant to subdivision (b) or (c) above
         shall have the effect of increasing the Warrant Price by an amount in
         excess of the amount of the adjustment thereof originally made in
         respect of the issue, sale, grant or assumption of such Options or
         Convertible Securities; and

                  (e) in the case of any such Options which expire by their
         terms not more than 30 days after the date of issue, sale, grant or
         assumption thereof, no adjustment of the Warrant Price shall be made
         until the expiration or exercise of all such Options, whereupon such
         adjustment shall be made in the manner provided in subdivision (c)
         above.

         2.4 Treatment of Stock Dividends, Stock Splits, etc. In case the Issuer
at any time or from time to time after the date hereof shall declare or pay any
dividend on the Common Stock payable in Common Stock, or shall effect a
subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock), then, and in each such case, Additional Shares of
Common Stock shall be deemed to have been issued (a) in the case of any such
dividend, immediately after the close of business on the record date for the
determination of Holders of any class of securities entitled to receive such
dividend, or (b) in the case of any such subdivision, at the close of business
on the day immediately prior to the day upon which such corporate action becomes
effective.







                                       7
<PAGE>


         2.5 Computation of Consideration.

         For the purposes of this Section 2:

                  (a) the consideration for the issue or sale of any Additional
         Shares of Common Stock shall, irrespective of the accounting treatment
         of such consideration,

                           (i) insofar as it consists of cash, be computed at
                   the amount of cash received by the Issuer plus any expenses
                   paid or incurred by the Issuer or any commissions or
                   compensations paid or discounts or concessions allowed to
                   underwriters, dealers or others performing similar services
                   in connection with such issue or sale,

                           (ii) insofar as it consists of property (including
                   securities) other than cash, be computed at the fair value
                   thereof at the time of such issue or sale, as determined in
                   good faith by an independent appraisal firm of recognized
                   national standing appointed by the Issuer, and

                           (iii) in case Additional Shares of Common Stock are
                   issued or sold together with other stock or securities or
                   other assets of the Issuer for a consideration which covers
                   both, be the portion of such consideration so received,
                   computed as provided in clauses (i) and (ii) above, allocable
                   to such Additional Shares of Common Stock, as determined in
                   good faith by an independent appraisal firm of recognized
                   national standing appointed by the Issuer.

                  (b) Additional Shares of Common Stock deemed to have been
         issued pursuant to Section 2.3, relating to Options and Convertible
         Securities, shall be deemed to have been issued for a consideration per
         share determined by dividing

                           (i) the total amount, if any, received and receivable
                   by the Issuer as consideration for the issue, sale, grant or
                   assumption of the Options or Convertible Securities in
                   question, plus the minimum aggregate amount of additional
                   consideration (as set forth in the instruments relating
                   thereto, without regard to any provision contained therein
                   for a subsequent adjustment of such consideration to protect
                   against dilution) payable to the Issuer upon the exercise in
                   full of such Options or the conversion or exchange of such
                   Convertible Securities or, in the case of Options for
                   Convertible Securities, the exercise of such Options for
                   Convertible Securities and the conversion or exchange of such
                   Convertible Securities, in each case computing such
                   consideration as provided in the foregoing subdivision (a),

         by

                           (ii) the maximum number of shares of Common Stock (as
                   set forth in the instruments relating thereto, without regard
                   to any provision






                                       8
<PAGE>

                   contained therein for a subsequent adjustment of such number
                   to protect against dilution) issuable upon the exercise of
                   such Options or the conversion or exchange of such
                   Convertible Securities (including the full conversion or
                   exchange of all Options and Convertible Securities underlying
                   such Options and Convertible Securities); and

                   (c) Additional Shares of Common Stock deemed to have been
         issued pursuant to Section 2.4, relating to stock dividends, stock
         splits, etc., shall be deemed to have been issued for no consideration.

         2.6 Adjustments for Combinations, etc. In case the outstanding shares
of Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Warrant Price in
effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.

         2.7 Dilution in Case of Other Securities. In case any Other Securities
shall be issued or sold or shall become subject to issue or sale upon the
conversion or exchange of any stock (or Other Securities) of the Issuer (or any
issuer of Other Securities or any other Person referred to in Section 3) or to
subscription, purchase or other acquisition pursuant to any Options issued or
granted by the Issuer (or any such other issuer or Person) for a consideration
such as to dilute, on a basis consistent with the standards established in the
other provisions of this Section 2, the purchase rights granted by this Warrant,
then, and in each such case, the computations, adjustments and readjustments
provided for in this Section 2 with respect to the Warrant Price shall be made
as nearly as possible in the manner so provided and applied to determine the
amount of Other Securities from time to time receivable upon the exercise of the
Warrant, so as to protect the Holder or Holders of the Warrant against the
effect of such dilution.

         2.8 Minimum Adjustment of Warrant Price. If the amount of any
adjustment of the Warrant Price required pursuant to this Section 2 would be
less than one tenth (1/10) of one percent (1%) of the Warrant Price in effect at
the time such adjustment is otherwise so required to be made, such amount shall
be carried forward and adjustment with respect thereto made at the time of and
together with any subsequent adjustment which, together with such amount and any
other amount or amounts so carried forward, shall aggregate at least one tenth
(1/10) of one percent (1%) of such Warrant Price.

3.       Business Combinations.

         3.1 Adjustment upon Business Combination. In case the Issuer after the
date of the Main Agreement is party to (i) any acquisition of the Issuer by
means of merger or other form of corporate reorganization in which outstanding
shares of the Issuer are exchanged for securities or other consideration issued,
or caused to be issued, by the Acquiring Person or its Parent, Subsidiary or
affiliate, (ii) a sale of all or substantially all of the assets of the Issuer
(on a consolidated basis) in a single transaction or series of related
transactions, (iii) any other transaction or series of related transactions by
the Issuer in which the power to cast the majority of the eligible votes at a
meeting of the Issuer's shareholders at which directors are elected is
transferred to a single entity or group acting in concert, or (iv) a capital
reorganization or








                                       9
<PAGE>

reclassification of the Common Stock or Other Securities (other than a
reorganization or reclassification in which the Common Stock or Other Securities
are not converted into or exchanged for cash or other property, and, immediately
after consummation of such transaction, the shareholders of the Issuer
immediately prior to such transaction own the Common Stock, Other Securities or
other voting stock of the Issuer in substantially the same proportions relative
to each other as such shareholders owned immediately prior to such transaction),
then, and in the case of each such transaction (each of which is referred to
herein as "Business Combination"), proper provision shall be made so that, upon
the basis and the terms and in the manner provided herein, the Holder, upon
exercise of all or any part of this Warrant at any time after the consummation
of such Business Combination, shall be entitled to receive upon such exercise,
in lieu of the cash, property, Common Stock or Other Securities issuable upon
such exercise prior to such consummation, any of the following, as shall be
elected, in whole or in part, at least five (5) Business Days before such
consummation (or, if the Holder fails to so elect, the Holder shall be deemed to
have elected (B) below), by the Holder:

                  (A) the Common Stock and Other Securities, cash and property
         to which the Holder would have been entitled upon such consummation if
         the Holder had held the Gross Number of shares of Common Stock (or
         Other Securities) immediately prior thereto, adjusted as nearly as
         possible to give effect to the net exercise provisions of Section
         1.1(a); or

                  (B) cash in an amount equal to the price of a European option
         determined pursuant to the Black-Scholes formula as computed using the
         Bloomberg Professional Service for the Gross Number of shares of Common
         Stock (or Other Securities) with respect to exercise of the portion of
         the Warrant for which this clause (B) is elected, using the following
         variables: (i) the "current price" shall be the closing price per share
         for the Common Stock (or Other Securities) as reported by the Bloomberg
         Professional Service for the primary exchange or quotation system on
         which such Common Stock (or Other Securities) traded on the Business
         Day immediately before the date such Business Combination was
         consummated; (ii) the "strike price" shall be the Warrant Price as of
         the Business Day immediately before the date such Business Combination
         was consummated; (iii) the "interest rate" shall be the yield to
         maturity for a U.S. Treasury security with a time to maturity
         equivalent to the time between the Business Day immediately before the
         date such Business Combination was consummated and the Termination
         Date; (iv) "volatility" shall be equal to seventy-five percent (75%) of
         the number reported by the Bloomberg Professional Service for the
         260-Business-Day period as of the date that is five (5) Business Days
         before and excluding the date such Business Combination was announced
         (but in no event shall the "volatility" be greater than seventy-five
         percent (75%)); (v) the "expiration date" shall be the Termination
         Date; (vi) "trading date" shall be the Business Day immediately before
         the date such Business Combination was consummated; and (vii) "dividend
         yield" shall be zero percent (0%). The Holder shall not be obligated to
         pay any consideration (including, but not limited to, the Stock
         Purchase Price) in order to receive the consideration specified in this
         clause (B);




                                       10
<PAGE>


         provided, that if the Acquiring Person or its Parent, as the case may
         be, shall combine, subdivide or reclassify its common stock, or shall
         declare any dividend payable in shares of its common stock, or shall
         take any other action of a similar nature affecting such shares, the
         calculations above shall be adjusted to the extent appropriate to
         reflect such event, including appropriate adjustments to account for
         any such event that occurs during any of the measurement periods set
         forth above.

         3.2 Assumption of Obligations. Notwithstanding anything contained
herein or in the Main Agreement to the contrary, the Issuer will not effect any
Business Combination unless the requirements of Section 11 of the Main Agreement
have been met and unless, prior to the consummation thereof, each Person (other
than the Issuer) that may be required to deliver any stock, securities, cash or
property upon exercise of this Warrant as provided herein shall assume, by
written instrument delivered to, and reasonably satisfactory to, the Holder, (A)
the obligations of the Issuer under this Warrant (and if the Issuer shall
survive the consummation of such transaction, such assumption shall be in
addition to, and shall not release the Issuer from, any continuing obligations
of the Issuer under this Warrant) and (B) the obligation to deliver to the
Holder such shares of stock, securities, cash or property as, in accordance with
the foregoing provisions of this Section 3, the Holder may be entitled to
receive, and such Person shall have similarly delivered to the Holder an opinion
of counsel for such Person, which counsel shall be reasonably satisfactory to
the Holder, stating that the rights of the Holder under this Warrant shall
thereafter continue in full force and effect and the terms hereof, including,
without limitation, all of the provisions of this Section 3 shall be applicable
to the stock, securities, cash or property which such Person may be required to
deliver upon any exercise of this Warrant or the exercise of any of the rights
pursuant hereto.

4.       Other Dilutive Events, Restatements.

              (a) In case any event shall occur as to which the provisions of
         Sections 2 and 3 are not strictly applicable (including, without
         limitation, the repurchase by the Issuer of Options or Convertible
         Securities) but the failure to make any adjustment would not fairly
         protect the purchase rights represented by this Warrant in accordance
         with the essential intent and principles of such Sections, then, in
         each such case, the Issuer shall notify the Holder of such event and,
         upon demand by the Holder, the Issuer shall appoint a firm of
         independent certified public accountants of recognized national
         standing (which shall not be the regular auditors of the Issuer), which
         shall give their opinion upon the adjustment, if any, on a basis
         consistent with the essential intent and principles established in
         Sections 2 and 3, necessary to preserve the value of the purchase
         rights represented by this Warrant. Such opinion shall include the
         basis for the calculations and conclusions contained therein in
         reasonable detail. Upon receipt of such opinion, the Issuer will
         promptly deliver a copy thereof via facsimile and overnight courier to
         the Holder or Holders of this Warrant and shall make the adjustments
         described therein. Upon written request by Holder, Issuer shall provide
         Holder with reasonable access to such information as may be necessary
         to evaluate the calculations and conclusions contained in such opinion.
         Within twenty (20) Business Days of receiving all such information
         Holder may dispute the conclusions of such opinion by providing a
         written notice of dispute to Issuer, which notice shall include the
         basis for the calculations and








                                       11
<PAGE>

         conclusions contained therein in reasonable detail. If Issuer and
         Holder are unable to agree to the appropriate calculation of such
         adjustment within ten (10) Business Days of such notice from Holder,
         then an independent nationally-recognized firm of certified public
         accountants selected by Holder and reasonably acceptable to Issuer
         shall be appointed to resolve the dispute, and such accountants'
         decision shall be final and binding upon the Issuer and the Holder. The
         costs of such firm of certified public accountants shall be borne by
         Issuer.

              (b) In the event of a Restatement the Warrant Price shall equal
         the corresponding Restatement Purchase Price, if the Restatement
         Purchase Price is lower than the Warrant Price in effect on the date
         ninety (90) calendar days after and excluding such Restatement Date.
         "Restatement Purchase Price" means one hundred and fifty percent (150%)
         of the Average Market Price calculated on the date ninety (90) calendar
         days after and excluding the related Restatement Date. The Issuer shall
         deliver a Restatement Notice to the Holder no later than two (2) days
         after and excluding each Restatement Date.

5.       No Impairment. The Issuer will not, by amendment of its certificate of
incorporation or through any consolidation, merger, reorganization, transfer of
assets, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder of this Warrant against
impairment. Without limiting the generality of the foregoing, the Issuer (a)
will not permit the par value of any shares of stock receivable upon the
exercise of this Warrant to exceed the amount payable therefor upon such
exercise, (b) will take all such action as may be necessary or appropriate in
order that the Issuer may validly and legally issue fully paid and nonassessable
shares of stock on the exercise of the Warrants from time to time outstanding,
and (c) will not take any action which results in any adjustment of the Warrant
Price if the total number of shares of Common Stock (or Other Securities)
issuable after the action upon the exercise of all of the Warrants would exceed
the total number of shares of Common Stock (or Other Securities) then authorized
by the Issuer's certificate of incorporation and available for the purpose of
issue upon such exercise.

6.       Accountants' Report as to Adjustments. In each case of any adjustment
or readjustment in the shares of Common Stock (or Other Securities) issuable
upon the exercise of this Warrant, the Issuer at its expense will promptly
compute such adjustment or readjustment in accordance with the terms of this
Warrant and cause independent certified public accountants of recognized
national standing (which may be the regular auditors of the Issuer) selected by
the Issuer to verify such computation and prepare a report setting forth such
adjustment or readjustment and showing in reasonable detail the method of
calculation thereof and the facts upon which such adjustment or readjustment is
based, including but not limited to a statement of (a) the consideration
received or to be received by the Issuer for any Additional Shares of Common
Stock issued or sold or deemed to have been issued, (b) the number of shares of
Common Stock outstanding or deemed to be outstanding, and (c) the Warrant Price
in effect immediately prior to such issue or sale and as adjusted and readjusted
(if required by Section 2, 3 or 4) on account








                                       12
<PAGE>

thereof. The Issuer will forthwith mail a copy of each such report to each
Holder of a Warrant and will, upon the written request at any time of any Holder
of a Warrant, furnish to such Holder a copy of the most recent report setting
forth the Warrant Price in effect as of the date such report is delivered and
showing in reasonable detail how it was calculated. The Issuer will also keep
copies of all such reports at its principal office and will cause the same to be
available for inspection at such office during normal business hours by any
Holder of a Warrant or any prospective purchaser of a Warrant designated by the
Holder thereof.

7.       Notices of Corporate Action.

         In the event of:

              (a) any taking by the Issuer of a record of the holders of any
         class of securities for the purpose of determining the holders thereof
         who are entitled to receive any dividend (other than a regular periodic
         dividend payable in cash out of earned surplus in an amount not
         exceeding the amount of the immediately preceding cash dividend for
         such period) or other distribution, or any right to subscribe for,
         purchase or otherwise acquire any shares of stock of any class or any
         other securities or property, or to receive any other right, or

              (b) any capital reorganization of the Issuer, any reclassification
         or recapitalization of the capital stock of the Issuer or any
         consolidation or merger involving the Issuer and any other Person or
         any transfer of all or substantially all the assets of the Issuer to
         any other Person, or

              (c) any voluntary or involuntary dissolution, liquidation or
         winding-up of the Issuer,

the Issuer will mail to the Holder a notice specifying (i) the date or expected
date on which any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend,
distribution or right, and (ii) the date or expected date on which any such
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up is to take place and the time,
if any such time is to be fixed, as of which the holders of record of Common
Stock (or Other Securities) shall be entitled to exchange their shares of Common
Stock (or Other Securities) for the securities or other property deliverable
upon such reorganization, reclassification, recapitalization, consolidation,
merger, transfer, dissolution, liquidation or winding-up. Such notice shall be
delivered to Holder at least ten (10) Business Days prior to the date therein
specified, but in no event later than the date notice is delivered to any holder
of Common Stock.

8.       Reservation of Shares. For so long as the Warrant represented hereby
has not been exercised in full, the Issuer shall at all times prior to the
Termination Date reserve and keep available, free from pre-emptive rights, out
of its authorized but unissued capital stock, the number of shares required to
permit the full exercise of this Warrant (assuming it were exercised in the
manner provided for in Section 1.1(a) hereof). In the event the number of Common
Shares (or other securities) issuable hereunder exceeds the authorized number of
shares of Common Stock (or other securities), the Issuer shall, as soon as is
reasonably possible and in all events






                                       13
<PAGE>

within eight (8) Business Days, take all actions necessary to increase the
authorized number, including causing its Board of Directors to call a special
meeting of shareholders, recommend such increase and not withdraw such
recommendation.

9.       Transfer and Assignment.

         9.1 By accepting delivery of this Warrant Certificate, the registered
Holder hereof covenants and agrees with the Issuer not to exercise the Warrant
or transfer the Warrant or the Common Shares represented hereby except in
compliance with the terms of the Main Agreement and this Warrant Certificate.

         9.2 By accepting delivery of this Warrant Certificate, the registered
Holder hereof covenants and agrees with the Issuer that no Warrant may be sold
or assigned, in whole or in part, unless such sale or assignment complies with
applicable federal and state securities laws and until such Holder shall deliver
to the Issuer (i) written notice of such transfer and of the name and address of
the transferee and such notice has been received by the Issuer; (ii) a written
agreement of the transferee to comply with the terms of this Warrant Certificate
and, solely insofar as it relates to this Warrant, the Main Agreement; and (iii)
a certificate of the Holder or the transferee that such transfer complies with
applicable federal and state securities laws. If a portion of the Warrant is
transferred, all rights of the registered Holder hereunder may be exercised by
the transferee provided that any registered Holder of the Warrant may deliver a
Warrant Exercise Notice only with respect to the Common Stock subject to such
Holder's portion of the Warrant.

         9.3 The Issuer will pay all documentary stamp taxes (if any)
attributable to the issuance of Common Shares upon the exercise of the Warrant
by the registered Holder hereof; provided, however, that the Issuer shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the registration of the Warrant Certificate or any certificates for
Common Shares in a name other than that of the registered Holder of the Warrant
Certificate surrendered upon the exercise of a Warrant, and the Issuer shall not
be required to issue or deliver the Warrant Certificate or certificates for
Common Shares unless or until the person or persons requesting the issuance
thereof shall have paid to the Issuer the amount of such tax or shall have
established to the reasonable satisfaction of the Issuer that such tax has been
paid.

10.      Lost or Stolen Warrant. In case this Warrant Certificate shall be
mutilated, lost, stolen or destroyed, the Issuer shall issue in exchange and
substitution for and upon cancellation of the mutilated Warrant Certificate, or
in lieu of and substitution for the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor, but only upon receipt of
evidence reasonably satisfactory to the Issuer of such loss, theft or
destruction of such Warrant Certificate and customary indemnity reasonably
satisfactory to the Issuer.

11.      Warrant Agent. The Issuer (and any corporation into which the Issuer is
merged or any corporation resulting from any consolidation to which the Issuer
is a party) shall serve as warrant agent (the "Warrant Agent") under this
Warrant. The Warrant Agent hereunder shall at all times maintain a register (the
"Warrant Register") of the Holders of this Warrant. Upon 30 days' notice to the
registered Holder hereof, the Issuer may appoint a new Warrant Agent. Such new
Warrant






                                       14
<PAGE>

Agent shall be a corporation doing business and in good standing under the laws
of the United States or any state thereof, and having a combined capital and
surplus of not less than $100,000,000. The combined capital and surplus of any
such new Warrant Agent shall be deemed to be the combined capital and surplus as
set forth in the most recent report of its condition published by such Warrant
Agent prior to its appointment; provided that such reports are published at
least annually pursuant to law or to the requirements of a federal or state
supervising or examining authority. After acceptance in writing of such
appointment by the new Warrant Agent, it shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named herein as
the Warrant Agent, without any further assurance, conveyance, act or deed; but
if for any reason it shall be reasonably necessary or expedient to execute and
deliver any further assurance, conveyance, act or deed, the same shall be done
at the expense of the Issuer and shall be legally and validly executed and
delivered by the Issuer. Any corporation into which any new Warrant Agent may be
merged or any corporation resulting from any consolidation to which any new
Warrant Agent shall be a party or any corporation to which any new Warrant Agent
transfers substantially all of its corporate trust or shareholders services
business shall be a successor Warrant Agent under this Warrant without any
further act; provided that such corporation (i) would be eligible for
appointment as successor to the Warrant Agent under the provisions of this
Section 11 or (ii) is a wholly owned subsidiary of the Warrant Agent. Any such
successor Warrant Agent shall promptly cause notice of its succession as Warrant
Agent to be delivered via reputable overnight courier to the registered Holder
hereof at such Holder's last address as shown on the Warrant Register.

12.      Definitions. As used herein, unless the context otherwise requires, the
following terms have the following respective meanings:

         12.1 "90-Day Price" means the average of the Daily Market Prices over
the 90-Business-Day period commencing on the first Business Day after and
excluding the date of the Main Agreement.

         12.2 "Acquiring Person" means, in connection with any Business
Combination: (i) the continuing or surviving corporation of a consolidation or
merger with the Issuer (if other than the Issuer), (ii) the transferee of all or
substantially all of the properties or assets of the Issuer, (iii) the
corporation consolidating with or merging into the Issuer in a consolidation or
merger in connection with which the Common Stock is changed into or exchanged
for stock or other securities of any other Person or cash or any other property,
(iv) the entity or group acting in concert acquiring or possessing the power to
cast the majority of the eligible votes at a meeting of the Issuer's
shareholders at which directors are elected or, (v) in the case of a capital
reorganization or reclassification described in clause (d) of the definition of
Business Combination, the Issuer.

         12.3 "Acquisition Price" means (i) the Daily Market Price of the Common
Stock on the Business Day immediately preceding the date on which a Business
Combination is consummated, or (ii) if a purchase, tender or exchange offer is
made by the Acquiring Person (or by any of its affiliates) to the holders of the
Common Stock and such offer is accepted by the holders of more than fifty
percent (50%) of the outstanding shares of Common Stock, the greater of (x) the
price determined in accordance with the provisions of the foregoing clause (i)
of this sentence and (y) the Daily Market Price on the Business Day immediately
preceding









                                       15
<PAGE>

the acceptance of such offer by the holders of more than fifty percent (50%) of
the outstanding shares of Common Stock.

         12.4 "Additional Shares of Common Stock" means all shares (including
treasury shares) of Common Stock issued or sold (or, pursuant to Section 2.3 or
2.4, deemed to be issued) by the Issuer after the date hereof, whether or not
subsequently reacquired or retired by the Issuer, other than shares issued upon
the exercise of the Warrants; provided, however, that this term shall not
include Excluded Securities.

         12.5 "Average Market Price" means, with respect to any reference date,
the average of the Daily Market Prices of the Common Stock (or, for purposes of
determining the Average Market Price of the common stock of an Acquiring Person
or its Parent under Section 3, the common stock of such Acquiring Person or such
Parent) for the thirty (30) Business Days ending on and including the third
Business Day before such reference date, but not greater than the average of the
Daily Market Prices of the Common Stock for the five (5) Business Days ending on
and including the twenty-eighth Business Day before such reference date, subject
to adjustment for stock splits, recombinations, stock dividends and the like.

         12.6 "Common Stock" as defined in the introduction to this Warrant,
such term to include any stock into which such Common Stock shall have been
changed or any stock resulting from any reclassification of such Common Stock,
and all other stock of any class or classes (however designated) of the Issuer
the Holders of which have the right, without limitation as to amount, either to
all or to a share of the balance of current dividends and liquidating dividends
after the payment of dividends and distributions on any shares entitled to
preference to Common Stock shares.

         12.7 "Convertible Securities" means any evidences of indebtedness,
shares of stock (other than Common Stock) or other securities directly or
indirectly convertible into or exchangeable for Additional Shares of Common
Stock.

         12.8 "Daily Market Price" means, on any date, the amount per share of
the Common Stock (or, for purposes of determining the Daily Market Price of the
common stock of an Acquiring Person or its Parent under Section 3, the common
stock of such Acquiring Person or such Parent), equal to (i) the daily
volume-weighted average price on the NYSE (or, in the case of an Acquiring
Person or its Parent, on the national securities exchange on which such entity's
common stock is admitted for trading) or, if no such sale takes place on such
date, the average of the closing bid and asked prices on the NYSE thereof on
such date, in each case as reported by Bloomberg, L.P. (or by such other Person
as the Holder and the Issuer may agree), or (ii) if such Common Stock or common
stock of an Acquiring Person or its Parent is not then listed or admitted to
trading on the NYSE, the higher of (x) the book value per share thereof as
determined by any firm of independent public accountants of recognized standing
selected by the Board of Directors of the Issuer as of the last calendar day of
any month ending within sixty (60) calendar days preceding the date as of which
the determination is to be made or (y) the fair value per share thereof
determined in good faith by an independent, nationally recognized appraisal firm
selected by the Issuer and reasonably acceptable to the Holder (whose fees and
expenses shall be borne by the Issuer), subject to adjustment for stock splits,
recombinations, stock dividends and the like.




                                       16
<PAGE>


         12.9 "Excluded Securities" means each of the following:

              (a) Except for purposes of Section 2.4, Common Stock issued or
         issuable pursuant to any stock split, dividend or distribution payable
         in additional shares of Common Stock or other securities or rights
         convertible into, or entitling the holder thereof to receive directly
         or indirectly, additional shares of Common Stock without payment of any
         consideration by such holder, including Common Stock issued or issuable
         with respect to the Series B Preferred Stock or Series C Preferred
         Stock;

              (b) Common Stock issued or issuable upon the exercise of any
         options or warrants to purchase Common Stock outstanding on the date of
         the Main Agreement or upon conversion of any securities convertible
         into Common Stock outstanding on the date of the Main Agreement, in
         each case in accordance with the terms of such options, warrants or
         securities in effect on the date of the Main Agreement;

              (c) Common Stock, Options or Convertible Securities issued or
         issuable consistent with past practice to employees, consultants or
         directors of Issuer directly or pursuant to a stock option plan,
         employee stock purchase plan or restricted stock plan, or other similar
         arrangements related to compensation for services in effect on the date
         of the Main Agreement, or similar plans or arrangements, consistent
         with past practice, approved by Issuer's Board of Directors and, when
         required by law, its shareholders after the date of the Main Agreement;

              (d) Common Stock, Options or Convertible Securities issued or
         issuable in connection with any debt financing transaction; provided
         that (i) the number of shares of Common Stock (including shares of
         Common Stock issuable upon exercise, conversion, redemption or
         otherwise under such Options and Convertible Securities) shall not,
         when aggregated with all other shares of Common Stock (including shares
         of Common Stock issuable upon exercise, conversion, redemption or
         otherwise under such Options and Convertible Securities) issued under
         this subsection (d), exceed 2,428,261, subject to appropriate
         adjustment for stock splits, stock dividends, stock distributions,
         reverse stock splits, and similar transactions, and (ii) the value of
         the Common Stock (including shares of Common Stock issuable upon
         exercise, conversion, redemption or otherwise under such Options and
         Convertible Securities) issued in each such transaction, determined as
         if each such share of Common Stock has a value equal to the Daily
         Market Price as of the date such transaction is consummated, shall not
         exceed ten percent (10%) of the value of the non-equity portion of such
         transaction; and

              (e) Common Stock issued or issuable upon exercise of this Warrant.

         12.10 "Gross Number" means, with respect to any exercise of this
Warrant, the product of (A) the number of shares on the face of this Warrant,
not to exceed in the aggregate the Issuable Number, for which this Warrant is
being exercised as specified in the respective Warrant Exercise Notice
multiplied by (B) the quotient of (1) the Stock Purchase Price divided by (2)
the Warrant Price (as adjusted to the date of such calculation).



                                       17
<PAGE>


         12.11 "Issuable Number" means one million eighty-two thousand seven
hundred twenty (1,082,720), provided that if the 90-Day Price is less than the
Conversion Price (as defined in the First Amended and Restated Certificate of
Rights and Preferences of Series B-1 Cumulative Convertible Preferred Stock),
then "Issuable Number" shall mean a quantity equal to the quotient of (a) $15
million divided by (b) the 90-Day Price, provided, however, that for purposes of
this paragraph, in no event shall the 90-Day Price be greater than 135% of the
Main Agreement Date Price (as defined in the Certificate of Rights and
Preferences of Series C Cumulative Convertible Preferred Stock) or less than the
amount equal to the product of (a) the quotient of six dollars divided by eight
dollars and fifty cents ($6.00/$8.50) times (b) the Main Agreement Date Price
(as defined in the Certificate of Rights and Preferences of Series C Cumulative
Convertible Preferred Stock).

         12.12 "Issuer" as defined in the introduction to this Warrant, means
Champion Enterprises, Inc. and any corporation which shall succeed to or assume
the obligations of Champion Enterprises, Inc.

         12.13 "Options" means any rights, options or warrants to subscribe for,
purchase or otherwise acquire either Additional Shares of Common Stock or
Convertible Securities.

         12.14 "Other Securities" means any stock (other than Common Stock) and
other securities of the Issuer or any other Person (corporate or otherwise)
which the Holders of the Warrants at any time shall be entitled to receive, or
shall have received, upon the exercise of the Warrants, in lieu of or in
addition to Common Stock, or which at any time shall be issuable or shall have
been issued in exchange for or in replacement of Common Stock or Other
Securities.

         12.15 "Parent" as to any Acquiring Person, means any corporation which
(a) controls the Acquiring Person directly or indirectly through one or more
intermediaries, (b) is required to include the Acquiring Person in the
consolidated financial statements contained in such Parent's Annual Report on
Form 10-K (if Parent is required to file such a report) or would be required to
so include the Acquiring Person in such Parent's consolidated financial
statements if they were prepared in accordance with U.S. GAAP and (c) is not
itself included in the consolidated financial statements of any other Person
(other than its consolidated subsidiaries).

         12.16 "Person" means a corporation, an association, a partnership, a
limited liability company, an organization, a business, an individual, a
government or political subdivision thereof or a governmental agency.

         12.17 "Registered Common Stock" means Common Stock that has been
registered under the Securities Act and is freely tradable.

         12.18 "Restatement" means that the Issuer adversely restates net income
or shareholders' equity, in any material respect, in any portion of its
financial statements as included in a Form 10-K or Form 10-Q filed with the
Securities and Exchange Commission in the form of an amendment thereto, press
release, Form 8-K or any other method except as is required as a result of a
change occurring after the date of the Main Agreement in (i) applicable law or
(ii) generally accepted accounting principles promulgated by the Financial
Accounting Standards Board or the







                                       18
<PAGE>

Securities and Exchange Commission, which change is implemented by the Issuer in
the manner and at the time prescribed by such law or such generally accepted
accounting principle.

         12.19 "Restatement Date" means the most recent date on which a
Restatement occurs.

         12.20 "Restatement Notice" means a written notice from the Issuer to
the Holder, (i) stating the Restatement Date and (ii) including the documents in
which the Restatement was publicly disclosed.

         12.21 "Stock Purchase Price" means, (a) until the expiration of the
90-Business-Day period used in calculating the 90-Day Price, $12.0369, and, (b)
immediately following the expiration of the 90-Business-Day period used in
calculating the 90-Day Price, the product of (i) one hundred and fifty percent
(150%) times (ii) the 90-Day Price. The Stock Purchase Price shall increase by
seventy-five cents ($0.75) on each anniversary of the date of the Main
Agreement.

         12.22 "Subsidiary" of a Person means (i) a corporation, a majority of
whose stock with voting power, under ordinary circumstances, to elect directors
is at the time of determination, directly or indirectly, owned by such Person or
by one or more Subsidiaries of such Person, or (ii) any other entity (other than
a corporation) in which such Person or one or more Subsidiaries of such Person,
directly or indirectly, at the date of determination thereof has at least a
majority ownership interest.

         12.23 "Termination Date" means the date set forth in the first
paragraph hereof, provided that the Termination Date shall be extended by one
day for each day that the Registration Requirement (as defined in the Main
Agreement) is not satisfied.

13.       Remedies. The Issuer stipulates that the remedies at law of the Holder
of this Warrant in the event of any default or threatened default by the Issuer
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific performance
of any agreement contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.

14.      No Rights or Liabilities as Shareholder. Nothing contained in this
Warrant shall be construed as conferring upon the Holder hereof any rights as a
shareholder of the Issuer or as imposing any obligation on such Holder to
purchase any securities or as imposing any liabilities on such Holder as a
shareholder of the Issuer, whether such obligation or liabilities are asserted
by the Issuer or by creditors of the Issuer.

15.      Notices. All notices and other communications under this Warrant shall
be in writing and shall be delivered by facsimile or by a nationally recognized
overnight courier, postage prepaid, addressed (a) if to Holder or the Issuer, in
the manner provided in the Main Agreement, or (b) if to any other Holder of any
Warrant, at the registered address of such Holder as set forth in the register
kept at the principal office of the Issuer, provided that the exercise of any
Warrant shall be effective in the manner provided in Section 1.




                                       19
<PAGE>


16.      Amendments. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.

17.      Descriptive Headings.  The headings in this Warrant are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.

18.      GOVERNING LAW.  THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

19.      Judicial Proceedings; Waiver of Jury. Any judicial proceeding brought
against the Issuer with respect to this Warrant may be brought in any court of
competent jurisdiction in the State of New York or of the United States of
America for the Southern District of New York and, by execution and delivery of
this Warrant, each of the Issuer and Holder (a) accepts, generally and
unconditionally, the nonexclusive jurisdiction of such courts and any related
appellate court, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Warrant, subject to any rights of appeal, and
(b) irrevocably waives any objection the Issuer or Holder may now or hereafter
have as to the venue of any such suit, action or proceeding brought in such a
court or that such court is an inconvenient forum. Each of the Issuer and Holder
hereby waives personal service of process and consents, that service of process
upon it may be made by certified or registered mail, return receipt requested,
at its address specified or determined in accordance with the provisions of
Section 15, and service so made shall be deemed completed on the first Business
Day after such service is deposited with a reputable overnight courier or, if
earlier, when delivered. Nothing herein shall affect the right to serve process
in any other manner permitted by law or shall limit the right of any party to
bring proceedings against the other party in the courts of any other
jurisdiction. EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY, OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS WARRANT OR THE RELATIONSHIP ESTABLISHED HEREUNDER.

         This Warrant Certificate shall not be valid unless signed by the
Issuer.

                  [REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]




                                       20
<PAGE>




         IN WITNESS WHEREOF, Champion Enterprises, Inc. has caused this Warrant
Certificate to be signed by its duly authorized officer.

Dated:  April 2, 2002          CHAMPION ENTERPRISES, INC.


                               By:         /s/ Anthony S. Cleberg
                                      ----------------------------------------
                               Name:    Anthony S. Cleberg
                               Title:   Executive Vice President and Chief
                                        Financial Officer





<PAGE>



                                                                       EXHIBIT 1


                        [FORM OF WARRANT EXERCISE NOTICE]

                  (To Be Executed Upon Exercise Of the Warrant)


                                     [DATE]

Champion Enterprises, Inc.
2701 Cambridge Court, Suite 300
Auburn Hills, MI 48326
Attention:  Chief Financial Officer

                  Re:      Warrant No. W-[  ]
                           __________________

Ladies and Gentlemen:

         The undersigned is the registered Holder of the above-referenced
warrant (the "Warrant") issued by Champion Enterprises, Inc. (the "Issuer"),
evidenced by copy of the Warrant Certificate attached hereto, and hereby elects
to exercise the Warrant to purchase [___________](1) shares of Common Stock (as
defined in such Warrant Certificate) and, pursuant to Section 1.1(a) of the
Warrant Certificate shall be entitled to receive [______________](2) shares of
Common Stock, net.

         In accordance with the terms of the attached Warrant Certificate, the
undersigned requests that certificates for such shares be registered in the name
of and delivered to the undersigned at the following address:



         The undersigned will deliver the original of the Warrant Certificate no
later than the second Business Day after and excluding the date of this notice.

         [If the number of shares of Common Stock to be delivered is less than
the total number of shares of Common Stock deliverable under the Warrant, insert
the following -- The undersigned requests that a new warrant certificate
substantially identical to the attached Warrant Certificate





______________________

(1)  Insert here the number of shares called for on the face of this Warrant
     (or, in the case of a partial exercise, the portion thereof as to which
     this Warrant is being exercised), in either case without making any
     adjustment for Additional Shares of Common Stock or any other stock or
     other securities or property or cash which, pursuant to the adjustment
     provisions of this Warrant, may be delivered upon exercise. In the case of
     partial exercise, a new Warrant or Warrants will be issued and delivered,
     representing the unexercised portion of the Warrant, to the Holder
     surrendering the Warrant.

(2)  Insert here the net number of shares that the Holder is entitled to receive
     upon exercise, using the formula in Section 1(a) of this Warrant.







<PAGE>

be issued to the undersigned evidencing the right to purchase the number of
shares of Common Stock equal to (x) the total number of shares of Common Stock
deliverable under the Warrant less (y) [_____________](3).]





















                                    [FLETCHER INTERNATIONAL, LTD., by its
                                    duly authorized investment advisor,
                                    FLETCHER ASSET MANAGEMENT, INC.]


                                     By:
                                        --------------------------------------
                                     Name:
                                     Title:



                                      By:
                                         --------------------------------------
                                      Name:
                                      Title:
ACKNOWLEDGED:

CHAMPION ENTERPRISES, INC.


By:
     --------------------------------------------
Name:
Title:





















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

(3)  Insert here the number of shares identified in the first footnote to this
     Form of Warrant Exercise Notice.



                                   2
<PAGE>






                                                                       EXHIBIT 2



                   [FORM OF WARRANT EXERCISE DELIVERY NOTICE]


                                     [Date]




Fletcher International, Ltd.
c/o Fletcher Asset Management, Inc.
22 East 67th Street
New York, NY  10021
Attention:        Peter Zayfert
Telephone:        (212) 284-4800
Facsimile:        (212) 284-4801

Ladies and Gentlemen:

         Reference is made to the Agreement (the "Main Agreement") dated as of
March 29, 2002 by and between Champion Enterprises, Inc. and Fletcher
International, Ltd. Capitalized terms not otherwise defined herein shall have
the meanings ascribed thereto in the Main Agreement.

         This notice confirms that the Warrant has been exercised by the Holder
with respect to ______________ shares of Common Stock at a Warrant Price (as
defined in the Warrant Certificate) of $_____________. Attached are copies of
the front and back of the _________ original stock certificates, each
representing ___________ shares of Common Stock, together with a copy of the
overnight courier air bill which will be used to ship such stock certificates.
Also attached is a reissued warrant certificate, as provided in Section 1.5 of
the Warrant Certificate. We will send the original stock certificates by
overnight courier to the following address:

                            [TO COME]

                            with a copy to:

                            Fletcher International, Ltd.
                            c/o Fletcher Asset Management, Inc.
                            22 East 67th Street
                            New York, NY  10021-5805
                            Attention:        Peter Zayfert






<PAGE>



                                     CHAMPION ENTERPRISES, INC.



                                     By:
                                         -----------------------------
                                     Name:
                                     Title:















                                       2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.4
<SEQUENCE>6
<FILENAME>k68735ex4-4.txt
<DESCRIPTION>AGREEMENT, DATED AS OF MARCH 29, 2002
<TEXT>
<PAGE>
                                                                     EXHIBIT 4.4



                                    AGREEMENT


                  This Agreement (this "Agreement") dated as of March 29, 2002
is entered into by and between Champion Enterprises, Inc., a corporation
organized under the laws of Michigan (together with its successors, "Champion"),
and Fletcher International, Ltd., a company organized under the laws of Bermuda
(together with its successors, "Fletcher").

                  The parties hereto agree as follows:

                  1. Purchase and Sale. In consideration of and upon the basis
of the representations, warranties and agreements and subject to the terms and
conditions set forth in this Agreement:

                           (a)      Fletcher agrees to purchase from Champion
         for an aggregate purchase price of twenty-five million dollars
         ($25,000,000), and Champion agrees to sell to Fletcher on the Initial
         Closing Date (as defined below), in accordance with Section 2 below,
         (i) twenty-five thousand (25,000) shares (the "Initial Preferred
         Shares") of Champion's Series C Cumulative Convertible Preferred Stock
         (the "Series C Preferred Stock"), having the terms and conditions set
         forth in the Certificate of Rights and Preferences attached hereto as
         Annex A (the "Certificate of Rights and Preferences"), (ii) one warrant
         in the form attached hereto as Annex L (a "Warrant"), (iii) the
         Fletcher Rights as provided in Section 1(c) hereof, and (iv) the other
         rights described herein (including, but not limited to, the amendment
         to the Certificate of Rights and Preferences of Series B-1 Cumulative
         Convertible Preferred Stock of Champion Enterprises, Inc. as provided
         in Section 1(f) hereof and the extension of the Fletcher Rights Period
         (as defined in Section 1(c) of the Prior Agreement) as set forth in
         Section 1(g) hereof). Fletcher shall have the right to convert the
         outstanding Initial Preferred Shares into shares of Common Stock of
         Champion, par value one dollar ($1.00) (the "Common Stock"), in the
         manner, and subject to the terms, specified in this Agreement and in
         the Certificate of Rights and Preferences. Fletcher shall have the
         right to exercise the Warrant in the manner, and subject to the terms,
         specified in this Agreement and in the Warrant.

                           (b)      The closing (the "Initial Closing") of the
         sale of the Initial Preferred Shares and the Warrant shall occur on
         Tuesday, April 2, 2002, or at such other date and time as Fletcher and
         Champion shall mutually agree (such date, the "Initial Closing Date").

                           (c)      Champion grants Fletcher rights (the
         "Fletcher Rights") to require Champion to issue to it from time to
         time, in whole or in part, up to an aggregate of ten thousand (10,000)
         shares of Series C Preferred Stock (such shares shall collectively be
         referred to as the "Additional Preferred Shares" and together with the
         Initial Preferred Shares, the "Series C Preferred Shares") at a price
         of one thousand dollars ($1,000) per share for an aggregate purchase
         price for all Fletcher Rights of ten million dollars ($10,000,000).
         Fletcher shall have the right to convert the outstanding Additional
         Preferred Shares into shares of Common Stock in the manner, and subject
         to the terms, specified in this Agreement and in the Certificate of
         Rights and Preferences. To exercise
<PAGE>
         any Fletcher Rights, Fletcher shall deliver one or more written notices
         substantially in the form attached hereto as Annex B (a "Fletcher
         Notice") to Champion from time to time during the period commencing on
         the date hereof (the "Rights Commencement Date") and ending no later
         than sixty (60) Business Days after and excluding the Rights
         Commencement Date (the "Fletcher Rights Period"). Fletcher may deliver,
         in the aggregate, no more than four (4) Fletcher Notices. Upon
         satisfaction or, if applicable, waiver of the relevant conditions set
         forth in Sections 14 and 15 hereof, the closing of each exercise of
         Fletcher Rights (each, a "Subsequent Closing") shall take place on the
         date that is two (2) Business Days following and excluding delivery of
         the Fletcher Notice, or at such other date and time as Fletcher and
         Champion shall mutually agree (such date and time being referred to
         herein as the "Subsequent Closing Date," and together with the Initial
         Closing Date, each a "Closing Date"). Fletcher may, in its sole
         discretion and at any time, waive all or any part of the Fletcher
         Rights by delivering written notice to that effect to the Company.

                           (d)      The Warrant is exercisable into Common
         Shares in accordance with the terms and conditions set forth in the
         Warrant. The form of the "Warrant Exercise Notice" to be executed and
         delivered by Fletcher to Champion specified therein is attached as
         Exhibit 1 to the Warrant and the form of the "Warrant Exercise Delivery
         Notice" to be executed and delivered by Champion to Fletcher as
         specified therein is attached as Exhibit 2 to the Warrant.

                           (e)      Champion grants Fletcher the rights to
         redeem all or part of the Series C Preferred Shares (including any
         accrued and unpaid dividends), pursuant to the terms and conditions set
         forth in the Certificate of Rights and Preferences (the "Redemption
         Rights"), upon delivery of a notice of redemption in the form attached
         hereto as Annex C (the "Redemption Notice"). Under certain
         circumstances set forth in the Certificate of Rights and Preferences,
         Champion may satisfy its redemption obligations by delivering shares of
         Common Stock (the amount of which shall be determined pursuant to the
         terms and conditions set forth in the Certificate of Rights and
         Preferences) (the "Redemption Common Stock").

                           (f)      On the Initial Closing Date, Champion shall
         file with the Michigan Department of Consumer and Industry Services an
         Amended and Restated Certificate of Rights and Preferences of Series
         B-1 Cumulative Convertible Preferred Stock of Champion Enterprises,
         Inc., having the terms and conditions set forth in the First Amended
         and Restated Certificate of Rights and Preferences of Series B-1
         Cumulative Convertible Preferred Stock of Champion Enterprises, Inc.
         attached hereto as Annex M (the "Amended Series B-1 Certificate").
         Additionally, Annex N attached hereto shall replace in its entirety
         Annex A to the Prior Agreement (as defined below). Each Subsequent
         Certificate of Rights and Preferences (as defined in the Prior
         Agreement) shall have the same terms and conditions as set forth in
         Annex N, except as set forth in Section 1(c) of the Prior Agreement.

                           (g)      Fletcher and Champion hereby agree that the
         expiration of the Fletcher Rights Period (as defined in Section 1(c) of
         the Prior Agreement) shall be extended to December 31, 2004.



                                       2
<PAGE>

                           (h)      As used herein, the term "Common Shares"
         means the Redemption Common Stock and shares issuable upon conversion
         or redemption of or as dividends under the Series C Preferred Shares,
         and all other Common Stock issuable under the Certificate of Rights and
         Preferences, the Warrant or this Agreement; the term "Prior Agreement"
         means the Agreement dated as of June 29, 2001 between Champion and
         Fletcher; the term "Prior Common Shares" means the Common Shares (as
         that term is defined in the Prior Agreement); the term "Investment
         Securities" means the Series C Preferred Shares and the Warrant issued
         hereunder, and all Common Shares; the term "Business Day" means any day
         on which the Common Stock may be traded on the NYSE or, if not admitted
         for trading on the NYSE, on any day other than a Saturday, Sunday or
         holiday on which banks in New York City are required or permitted to be
         closed; and the term "NYSE" means the New York Stock Exchange, but if
         the New York Stock Exchange is not then the principal U.S. trading
         market for the Common Stock, or such other applicable common stock,
         then "NYSE" shall be deemed to mean the principal U.S. national
         securities exchange (as defined in the Securities Exchange Act of 1934,
         as amended (the "Exchange Act")) on which the Common Stock, or such
         other applicable common stock, is then traded, or if such Common Stock,
         or such other applicable common stock, is not then listed or admitted
         to trading on any national securities exchange but is designated as a
         national market system security or a Nasdaq SmallCap Market Security by
         the National Association of Securities Dealers, Inc. ("NASD"), then
         such market system, or if such Common Stock, or such other applicable
         common stock, is not listed or quoted on any of the foregoing, then the
         OTC Bulletin Board.

                  2. Initial Closing. The Initial Closing shall take place
initially via facsimile on the Initial Closing Date in the manner set forth
below; provided that original certificates representing shares of Series C
Preferred Stock and the Warrant shall be delivered via Federal Express or
another reputable overnight carrier to Fletcher as Fletcher instructs in
writing. At the Initial Closing, the following deliveries shall be made:

                           (a) Series C Preferred Stock. Champion shall deliver
         to Fletcher five (5) stock certificates, each representing five
         thousand (5,000) shares of Series C Preferred Stock, duly executed by
         Champion in definitive form, together with one Warrant duly executed by
         Champion in definitive form, in each case duly registered on the books
         of Champion in the name of "Bear Stearns Securities Corp., as Custodian
         for Bear Stearns International Limited, Pledgee of Fletcher
         International, Ltd." or, if otherwise instructed by Fletcher, of
         Fletcher or any of its affiliates, pledgees or assignees.

                           (b) Purchase Price. Fletcher shall cause to be wire
         transferred to Champion, in accordance with the instructions set forth
         in Section 20, the aggregate purchase price of twenty-five million
         dollars ($25,000,000) in immediately available United States funds.

                           (c) Closing Documents. The closing documents required
         by Sections 14 and 15 shall be delivered to Fletcher and Champion,
         respectively.

                           (d) Delivery Notice. An executed copy of the delivery
         notice in the form attached hereto as Annex E shall be delivered to
         Fletcher.



                                       3
<PAGE>
The deliveries specified in this Section 2 shall be deemed to occur
simultaneously as part of a single transaction, and no delivery shall be deemed
to have been made until all such deliveries have been made.

                  3. Subsequent Closing. Each Subsequent Closing shall take
place initially via facsimile on the Subsequent Closing Date in the manner set
forth below; provided that original certificates representing Additional
Preferred Shares shall be delivered via Federal Express or another reputable
overnight carrier to Fletcher as Fletcher instructs in writing. At each
Subsequent Closing, the following deliveries shall be made:

                           (a)      Additional Preferred Shares. Champion shall
         issue and deliver to Fletcher stock certificates, each representing
         five thousand (5,000) Additional Preferred Shares (except that to the
         extent the number of Additional Preferred Shares to be delivered is not
         evenly divisible by five thousand (5,000), one (1) stock certificate
         shall represent the remaining shares), duly executed by Champion, and
         shall register such shares in the shareholder register of Champion.

                           (b)      Purchase Price. Fletcher shall cause to be
         wire transferred to Champion, in accordance with the instructions set
         forth in Section 20, one thousand dollars ($1,000) per Additional
         Preferred Share, in the aggregate the "Additional Issuance Price" as
         specified in the applicable Fletcher Notice (the "Additional Issuance
         Price") payable on such Subsequent Closing Date, in immediately
         available United States dollars.

                           (c)      Closing Documents. The closing documents
         required by Sections 14 and 15 shall be delivered to Fletcher and
         Champion, respectively.

                           (d)      Delivery Notice. An executed copy of the
         delivery notice in the form attached hereto as Annex E shall be
         delivered to Fletcher.

The deliveries specified in this Section 3 shall be deemed to occur
simultaneously as part of a single transaction, and no delivery shall be deemed
to have been made until all such deliveries have been made.

                  4. Representations and Warranties of Champion. Champion hereby
represents and warrants to Fletcher on each Closing Date, as follows:

                           (a)      Champion has been duly incorporated and is
         validly existing in good standing under the laws of Michigan or, after
         the Initial Closing Date, if another entity has succeeded Champion in
         accordance with the terms hereof, under the laws of one of the states
         of the United States.

                           (b)      The execution, delivery and performance of
         this Agreement, the Certificate of Rights and Preferences and the
         Warrant (including the authorization, sale, issuance and delivery of
         the Investment Securities) have been duly authorized by all requisite
         corporate action and no further consent or authorization of Champion,
         its Board of Directors or its shareholders is required, except as
         otherwise contemplated by this Agreement.



                                       4
<PAGE>
                           (c)      This Agreement has been duly executed and
         delivered by Champion and, when this Agreement is duly authorized,
         executed and delivered by Fletcher, will be a valid and binding
         agreement enforceable against Champion in accordance with its terms,
         subject to bankruptcy, insolvency, reorganization, moratorium and
         similar laws of general applicability relating to or affecting
         creditors' rights generally and to general principles of equity. The
         issuance of the Investment Securities are not and will not be subject
         to any preemptive right or rights of first refusal that have not been
         properly waived or complied with.

                           (d)      Champion has full corporate power and
         authority necessary to (i) own and operate its properties and assets,
         execute and deliver this Agreement, (ii) perform its obligations
         hereunder and under the Certificate of Rights and Preferences and the
         Warrant (including, but not limited to, the issuance of the Investment
         Securities) and (iii) carry on its business as presently conducted and
         as presently proposed to be conducted. Champion and its subsidiaries
         are duly qualified and are authorized to do business and are in good
         standing as foreign corporations in all jurisdictions in which the
         nature of their activities and of their properties (both owned and
         leased) makes such qualification necessary, except for those
         jurisdictions in which failure to do so would not have a material
         adverse effect on the business affairs, assets, results of operations
         or prospects of Champion and its subsidiaries, taken as a whole. Set
         forth on Schedule 4(d) attached hereto, is a complete list of all
         subsidiaries of Champion as of the date hereof.

                           (e)      No consent, approval, authorization or order
         of any court, governmental agency or other body is required for
         execution and delivery by Champion of this Agreement or the performance
         by Champion of any of its obligations hereunder and under the
         Certificate of Rights and Preferences or the Warrant other than such as
         may already have been received.

                           (f)      Neither the execution and delivery by
         Champion of this Agreement nor the performance by Champion of any of
         its obligations hereunder and under the Certificate of Rights and
         Preferences or the Warrant:

                                    (i)      violates, conflicts with, results
                  in a breach of, or constitutes a default (or an event which
                  with the giving of notice or the lapse of time or both would
                  be reasonably likely to constitute a default) or creates any
                  rights in respect of any person under (A) the certificates of
                  incorporation or by-laws of Champion or any of its
                  subsidiaries, (B) any decree, judgment, order, or
                  determination of any court, governmental agency or body, or
                  arbitrator having jurisdiction over Champion or any of its
                  subsidiaries or any of their respective properties or assets
                  or any material law, treaty, rule or regulation, (C) the terms
                  of any bond, debenture, note, indenture, credit agreement or
                  any other evidence of indebtedness, or any material agreement,
                  stock option or other similar plan, lease, mortgage, deed of
                  trust or other instrument to which Champion or any of its
                  subsidiaries is a party, by which Champion or any of its
                  subsidiaries is bound, or to which any of the properties or
                  assets of Champion or any of its subsidiaries is subject, (D)
                  the terms of any "lock-up" or similar provision of any
                  underwriting or similar agreement to which Champion or any of
                  its subsidiaries is a party, (E) any



                                       5
<PAGE>
                  material rule or regulation of the NASD or the New York Stock
                  Exchange or any rule or regulation of the markets where
                  Champion's securities are publicly traded or quoted applicable
                  to Champion or the transactions contemplated hereby or (F) the
                  Rights Agreement by and between Champion and Harris Trust and
                  Savings Bank, dated January 9, 1996, except for such
                  violations, conflicts, breaches or defaults referred to in
                  clauses (B), (C), (D) and (E) that would not affect Champion's
                  ability to execute and deliver or to perform any of its
                  obligations under this Agreement, the Certificate of Rights
                  and Preferences or the Warrant; or

                                    (ii)     results in the creation or
                  imposition of any lien, charge or encumbrance upon any
                  Investment Securities or any material lien, charge or
                  encumbrance upon any of the properties or assets of Champion
                  or any of its subsidiaries.

                           (g)      Champion has validly reserved for issuance
         to Fletcher the Initial Preferred Shares, any Additional Preferred
         Shares and the Warrant under this Agreement and that number of shares
         of Common Stock equal to the Registrable Number (determined as if the
         Required Registration Statement were filed as of the date this
         representation is made). When issued to Fletcher against payment
         therefor, each Investment Security:

                                    (i)      will have been duly and validly
                  authorized, duly and validly issued, fully paid and
                  non-assessable;

                                    (ii)     will be free and clear of any
                  security interests, liens, claims or other encumbrances; and

                                    (iii)    will not have been issued or sold
                  in violation of any preemptive or other similar rights of the
                  holders of any securities of Champion.

                           (h)      As of the date hereof, Champion satisfies
         all maintenance criteria of the New York Stock Exchange and, after the
         Closing Date, Champion satisfies all maintenance criteria for the New
         York Stock Exchange, Nasdaq National Market, or American Stock
         Exchange, or has a valid exemption from such criteria of which it has
         previously notified Fletcher in writing. To the best knowledge of
         Champion, after due inquiry, no present set of facts or circumstances
         will (with the passage of time or the giving of notice or both or
         neither) cause any of the Common Stock to be delisted from the New York
         Stock Exchange. Within five (5) Business Days after and excluding the
         Initial Closing Date, all of the Covered Securities (as defined in
         Section 5(b)) will, when issued, be duly listed and admitted for
         trading on all of the markets where shares of Common Stock are traded,
         including the New York Stock Exchange. At each Subsequent Closing Date,
         all of the Covered Securities (as defined in Section 5(b)) will, when
         issued, be duly listed and admitted for trading on all of the markets
         where shares of Common Stock are traded, including one of the
         following: (i) the New York Stock Exchange, (ii) the Nasdaq National
         Market, or (iii) the American Stock Exchange.



                                       6
<PAGE>
                           (i)      There is no pending or, to the best
         knowledge of Champion, threatened action, suit, proceeding or
         investigation before any court, governmental agency or body, or
         arbitrator having jurisdiction over Champion or any of its affiliates
         that would materially affect the execution by Champion of, or the
         performance by Champion of its obligations under, this Agreement, the
         Certificate of Rights and Preferences or the Warrant.

                           (j)      Since March 31, 1998, none of Champion's
         filings with the United States Securities and Exchange Commission (the
         "SEC") under the Securities Act of 1933, as amended (the "Securities
         Act") or under Section 13(a) or 15(d) of the Exchange Act (each an "SEC
         Filing") contained any untrue statement of a material fact or omitted
         to state any material fact necessary in order to make the statements,
         in the light of the circumstances under which they were made, not
         misleading. Since March 31, 1998, there has not been any pending or, to
         the best knowledge of Champion, threatened action, suit, proceeding or
         investigation before any court, governmental agency or body, or
         arbitrator having jurisdiction over Champion or any of its affiliates
         that could cause a material adverse change in the condition, financial
         or otherwise, or in the business affairs, assets, results of operations
         or prospects of Champion, whether or not arising in the ordinary course
         of business, except as disclosed in Champion's SEC Filings on or before
         the date immediately prior to and excluding the date hereof. Since the
         date of Champion's most recent SEC Filing, there has not been any
         material adverse change in the condition, financial or otherwise, or in
         the business affairs, assets, results of operations or prospects of
         Champion, whether or not arising in the ordinary course of business.
         Except as set forth on Schedule 4(p) hereto, Champion's SEC Filings
         made before and excluding the date hereof fully disclose all material
         information concerning Champion and its subsidiaries.

                           (k)      The offer and sale of the Investment
         Securities to Fletcher pursuant to this Agreement will, subject to
         compliance by Fletcher with the applicable representations and
         warranties contained in Section 8 hereof and with the applicable
         covenants and agreements contained in Section 12 hereof, be made in
         accordance with an exemption from the registration requirements of the
         Securities Act and any applicable state law. Neither Champion nor any
         agent on its behalf has solicited or will solicit any offers to sell or
         has offered to sell or will offer to sell all or any part of the Series
         C Preferred Shares or the Warrant to any person or persons so as to
         bring the sale of such Series C Preferred Shares or the Warrant by
         Champion within the registration provisions of the Securities Act.

                           (l)      Immediately prior to the Initial Closing
         Date, the authorized capital stock of Champion consists of one hundred
         twenty million (120,000,000) shares of Common Stock, par value one
         dollar ($1.00), and five million (5,000,000) shares of preferred stock,
         no par value ("Preferred Stock") of which seven hundred and fifty
         thousand (750,000) are designated Series A Preferred Stock and twenty
         thousand (20,000) are designated Series B-1 Preferred Stock.
         Immediately prior to the Initial Closing Date, (A) forty-eight million
         five hundred sixty-five thousand two hundred eight (48,565,208) shares
         of Common Stock, no shares of Series A Preferred Stock and
         twenty-thousand (20,000) shares of Series B-1 Preferred Stock, were
         issued and outstanding, (B)




                                       7
<PAGE>
         eight million eighty-three thousand eight hundred thirty-one
         (8,083,831) shares of Common Stock, seven hundred and fifty thousand
         (750,000) shares of Series A Preferred Stock and twelve thousand
         (12,000) shares of Series B Preferred Stock are currently reserved and
         subject to issuance upon the exercise of outstanding stock options,
         warrants or other convertible rights, (C) no shares of Common Stock are
         held in the treasury of Champion, and (D) up to three hundred
         thirty-four thousand one hundred forty-seven (334,147) additional
         shares of Common Stock may be issued under the Champion Enterprises,
         Inc. Savings Plan. All of the outstanding shares of Preferred Stock and
         Common Stock are, and all shares of capital stock which may be issued
         pursuant to stock options, warrants or other convertible rights will
         be, when issued and paid for in accordance with the respective terms
         thereof, duly authorized, validly issued, fully paid and
         non-assessable, free of any preemptive rights in respect thereof and
         issued in material compliance with all applicable state and federal
         laws concerning issuance of securities. As of the date hereof, except
         as set forth above, and except for shares of Common Stock or other
         securities issued upon conversion, exchange, exercise or purchase
         associated with the securities, options, warrants, rights and other
         instruments referenced above, no shares of capital stock or other
         voting securities of Champion were outstanding, no equity equivalents,
         interests in the ownership or earnings of Champion or other similar
         rights were outstanding, and there were no existing options, warrants,
         calls, subscriptions or other rights or agreements or commitments
         relating to the capital stock of Champion or any of its subsidiaries or
         obligating Champion or any of its subsidiaries to issue, transfer, sell
         or redeem any shares of capital stock, or other equity interest in,
         Champion or any of its subsidiaries or obligating Champion or any of
         its subsidiaries to grant, extend or enter into any such option,
         warrant, call, subscription or other right, agreement or commitment.
         Attached hereto as Schedule 4(l) is a true and correct list as of the
         date of this Agreement of all outstanding options, warrants, calls,
         subscriptions and other rights or agreements or commitments relating to
         the issuance of additional shares of capital stock of Champion and with
         respect to each a description of the number and class of securities and
         the exercise price thereof.

                           (m)      Solvency. The sum of the assets of Champion,
         at a fair valuation, exceeds its liabilities. Champion has sufficient
         capital with which to conduct its business as presently conducted and
         as proposed to be conducted and Champion has not incurred debts, and
         does not intend to incur debts, beyond its ability to pay such debts as
         they mature. For purposes of this paragraph, "debt" means any liability
         on a claim, and "claim" means (x) a right to payment, whether or not
         such right is reduced to judgment, liquidated, unliquidated, fixed,
         contingent, matured, unmatured, disputed, undisputed, legal, equitable,
         secured, or unsecured, or (y) a right to an equitable remedy for breach
         of performance if such breach gives rise to a payment, whether or not
         such right to an equitable remedy is reduced to judgment, fixed,
         contingent, matured, unmatured, disputed, undisputed, secured, or
         unsecured.

                           (n)      Audited Financials. Attached hereto as Annex
         F is a true, correct and complete copy of (i) the report of
         PricewaterhouseCoopers LLP dated February 8, 2002, together with the
         accompanying consolidated financial statements and schedules of
         Champion at December 29, 2001 and the results of Champion's operations
         and cash flows for each of the three (3) years in the period ended
         December 29, 2001, as such




                                       8
<PAGE>
         report appears in the Annual Report on Form 10-K for the fiscal year
         ended December 29, 2001 filed by Champion with the SEC (the "Auditor
         Report") and (ii) the written consent of PricewaterhouseCoopers LLP to
         the inclusion of its report described in clause (i) herein.

                           (o)      Equivalent Value. As of the Initial Closing
         Date, the consideration that Champion is receiving from Fletcher is
         equivalent in value to the consideration Fletcher is receiving from
         Champion pursuant to this Agreement. As of the Initial Closing Date,
         under the terms of this Agreement, Champion is receiving fair
         consideration from Fletcher for the agreements, covenants,
         representations and warranties made by Champion to Fletcher.

                           (p)      No Non-Public Information. Except as set
         forth on Schedule 4(p) attached hereto, Fletcher has not requested from
         Champion, and Champion has not furnished to Fletcher, any material
         non-public information or confidential information that may constitute
         material non-public information concerning Champion or its
         subsidiaries.

                           (q)      Restatement Notices. As of each Subsequent
         Closing Date, Champion has provided Fletcher with all Restatement
         Notices (as defined in the Certificate of Rights and Preferences)
         required to be delivered following a Restatement (as defined in the
         Certificate of Rights and Preferences).

                  5. Registration Provisions.

                           (a)     Champion shall at its own expense and as soon
as practicable, but in no event later than three (3) Business Days after and
excluding the earlier of (a) any Subsequent Closing Date or the date on which
Fletcher waives any of the Fletcher Rights if (i) after such date there are no
additional Fletcher Rights outstanding and unexercised by Fletcher and (ii) the
Company shall have consummated the first stage of the transaction described in
Schedule 4(p) hereto(1) or shall have decided to abandon such transaction, or
(b) the date of expiration of the Fletcher Rights Period (such earlier date to
be referred to as the "Rights Completion Date"), file a registration statement
(the "Required Registration Statement")) under the Securities Act covering the
resale of all of the Initial Common Shares (as defined below) and any Additional
Common Shares (as defined below) and shall use its best efforts to cause such
Required Registration Statement to be declared effective as soon as practicable
and in all events no later than ninety (90) calendar days following, and
including, the Rights Completion Date (the "Required Registration Date"). The
obligations to have such Required Registration Statement declared effective and
to maintain such effectiveness as provided in this Section 5 are referred to
herein as the "Registration Requirement." Champion shall register pursuant to
such Required Registration Statement not less than the number of shares of
Common Stock equal to 1.5 times the total number of Common Shares issued or
issuable for which such Required Registration Statement is filed, whether upon
exercise, conversion or redemption, within the year following the Required
Registration Date or otherwise on an as-converted basis as of such date (the
"Registrable

---------------------
(1) Schedule 4(p) shall describe the notes offering in stages. The first stage
shall be completion of the 144A placement.


                                       9
<PAGE>
Number"). Champion shall promptly amend such Required Registration Statement
(or, if necessary, file a new registration statement (such new registration
statement to be deemed an additional "Required Registration Statement" for
purposes of this Agreement)) at any time that the number of Common Shares for
which such Required Registration Statement was filed exceeds eighty percent
(80%) of the number of shares then registered so that the Registrable Number (as
determined on such date) of shares of Common Stock shall be registered and
freely tradable. "Additional Common Shares" (and each an "Additional Common
Share") means all shares of Common Stock issued and issuable upon conversion or
redemption of or as dividends under the Additional Preferred Shares. "Initial
Common Shares" (and each an "Initial Common Share") means all Common Shares
excluding the Additional Common Shares.

                           (b) Each Initial Common Share and each Additional
Common Share is a "Covered Security." Champion shall provide prompt written
notice to Fletcher when any Required Registration Statement has been declared
effective by the SEC.

                           (c) Champion will use its best efforts to: (A) keep
the Required Registration Statement effective until the earlier of (x) the later
of (i) the second anniversary of the date of expiration of the Fletcher Rights
Period, or (ii) such time as all of the Covered Securities issued or issuable to
Fletcher can be sold by Fletcher or any of its affiliates within a three
(3)-month period without compliance with the registration requirements of the
Securities Act pursuant to Rule 144 under the Securities Act ("Rule 144") or (y)
the date all of the Covered Securities issued or issuable shall have been sold
by Fletcher (such later period, the "Registration Period"); (B) prepare and file
with the SEC such amendments and supplements to the Required Registration
Statement and the prospectus used in connection with the Required Registration
Statement (as so amended and supplemented from time to time, the "Prospectus")
as may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all Covered Securities by Fletcher or any of its
affiliates; (C) furnish such number of Prospectuses and other documents incident
thereto, including any amendment of or supplement to such Prospectus, as
Fletcher from time to time may reasonably request; (D) cause all Covered
Securities to be listed on each securities exchange and quoted on each quotation
service on which similar securities issued by Champion are then listed or
quoted; (E) provide a transfer agent and registrar for all Covered Securities
and a CUSIP number for all Covered Securities; (F) otherwise comply with all
applicable rules and regulations of the SEC, the New York Stock Exchange and any
other exchange or quotation service on which the Covered Securities are
obligated to be listed or quoted under this Agreement; and (G) file the
documents required of Champion and otherwise obtain and maintain requisite blue
sky clearance in (x) New York and all other jurisdictions in which any of the
shares of Common Stock were originally sold and (y) all other states specified
in writing by Fletcher, provided, however, that as to this clause (y), Champion
shall not be required to qualify to do business or consent to service of process
in any state in which it is not now so qualified or has not so consented.
Fletcher shall have the right to approve the description of the selling
shareholder, plan of distribution and all other references to Fletcher contained
in the Required Registration Statement and Prospectus.

                           (d) Champion shall furnish to Fletcher upon request a
reasonable number of copies of a supplement to or an amendment of the Prospectus
as may be necessary in order to facilitate the public sale or other disposition
of all or any of the Covered Securities by Fletcher or any of its affiliates
pursuant to the Required Registration Statement.



                                       10
<PAGE>
                           (e) With a view to making available to Fletcher and
its affiliates the benefits of Rule 144 and Form S-3 under the Securities Act,
Champion covenants and agrees to: (A) make and keep available adequate current
public information (within the meaning of Rule 144(c)) concerning Champion,
until the earlier of (x) the second (2nd) anniversary of the date of expiration
of the Fletcher Rights Period or (y) such date as all of the Covered Securities
shall have been resold by Fletcher or any of its affiliates; and (B) furnish to
Fletcher upon request, as long as Fletcher owns any Covered Securities, (x) a
written statement by Champion that it has complied with the reporting
requirements of the Securities Act and the Exchange Act, (y) a copy of the most
recent annual or quarterly report of Champion, and (z) such other information as
may be reasonably requested in order to avail Fletcher and its affiliates of
Rule 144 or Form S-3 with respect to such Covered Securities.

                           (f) Notwithstanding anything else in this Section 5,
if, at any time during which a Prospectus is required to be delivered in
connection with the sale of any Covered Security, Champion determines in good
faith that a development has occurred or a condition exists as a result of which
the Required Registration Statement or Prospectus contains a material
misstatement or omission, or that a material transaction in which Champion is
engaged or proposes to engage would require an amendment to the Required
Registration Statement, a supplement to such Prospectus, or a filing under the
Exchange Act or other public disclosure of material information and the
disclosure of such transaction would be premature or injurious to the
consummation of the transaction, Champion will immediately notify Fletcher
thereof by telephone and in writing. Upon receipt of such notification, Fletcher
and its affiliates will immediately suspend all offers and sales of any Covered
Security pursuant to such Required Registration Statement. In such event,
Champion will amend or supplement such Required Registration Statement and
Prospectus or make such filings or public disclosures as promptly as practicable
and will use its best efforts to take such other steps as may be required to
permit sales of all Covered Securities thereunder by Fletcher and its affiliates
in accordance with applicable federal and state securities laws. Champion will
promptly notify Fletcher after it has determined in good faith that such sales
have become permissible in such manner and will promptly deliver copies of the
Required Registration Statement and Prospectus (as so amended or supplemented,
if applicable) to Fletcher in accordance with paragraphs (c) and (d) of this
Section 5. Notwithstanding the foregoing, (A) under no circumstances shall
Champion be entitled to exercise its right to suspend sales of any Covered
Securities as provided in this Section 5(f) and Section 5(f) of the Prior
Agreement and pursuant to the Required Registration Statement for more than a
total of sixty (60) days in any twelve (12)-month period, (B) the period during
which such sales may be suspended (each a "Blackout Period") at any time shall
not exceed thirty (30) days, and (C) no Blackout Period may commence less than
thirty (30) days after the end of (i) the preceding Blackout Period or (ii) the
preceding Blackout Period (as that term is defined in the Prior Agreement).

                           (g) Upon the commencement of a Blackout Period
pursuant to this Section 5, Fletcher will notify Champion of any contract to
sell, assign, deliver or otherwise transfer any Covered Security (each a "Sales
Contract") that Fletcher or any of its affiliates has entered into prior to the
commencement of such Blackout Period and that would require delivery of such
Covered Securities during such Blackout Period, which notice will contain the
aggregate sale price and volume of Covered Securities pursuant to such Sales
Contract. Upon receipt of such notice, Champion will immediately notify Fletcher
of its election either (i) to terminate the





                                       11
<PAGE>
Blackout Period and, as promptly as practicable, amend or supplement the
Required Registration Statement or Prospectus in order to correct the material
misstatement or omission and deliver to Fletcher copies of such amended or
supplemented Required Registration Statement and such Prospectus in accordance
with paragraphs (c) and (d) of this Section 5, or (ii) to continue the Blackout
Period in accordance with this paragraph. If Champion elects to continue the
Blackout Period (and, in any case, if a Blackout Period continues), and Fletcher
or any of its affiliates are therefore unable to consummate the sale of Covered
Securities pursuant to the Sales Contract, Champion will promptly indemnify each
Fletcher Indemnified Party (as such term is defined in Section 18(a) below)
against any Proceeding (as such term is defined in Section 18(a) below) that
each Fletcher Indemnified Party may incur arising out of or in connection with
Fletcher's breach or alleged breach of any such Sales Contract, and Champion
shall reimburse each Fletcher Indemnified Party for any reasonable costs or
expenses (including reasonable legal fees) incurred by such party in
investigating or defending any such Proceeding.

                           (h) In addition to any other remedies available to
Fletcher under this Agreement or at law or equity, if the Required Registration
Statement has not been declared effective by the Required Registration Date or
the Required Registration Statement is not available with respect to all Covered
Securities at any time on or after the Required Registration Date (except during
a Blackout Period permitted under Section 5(f)), then the Conversion Price (as
defined in the Certificate of Rights and Preferences) and the Warrant Price (as
defined in the Warrant) shall be permanently decreased by one fifteenth of one
percent (1/15 of 1%) for each day, compounded monthly, that the Required
Registration Statement is not available with respect to all Covered Securities
(except during a Blackout Period permitted under Section 5(f)).


                  6. "Market Stand-Off" Agreement. If requested by Champion and
an underwriter in a firm commitment underwritten public offering of Common Stock
with net proceeds of at least twenty-five million dollars ($25,000,000) to
Champion, after underwriter's discounts or commissions and other fees or
expenses, Fletcher shall not sell any Common Stock (other than Common Stock
included in the registration) during the ninety (90) day period (or such shorter
period, if so notified by Champion in writing) following the effective date of a
registration statement of Champion filed under the Securities Act, provided
that:

                           (a) such agreement shall only apply to registration
statements of Champion including securities to be sold on its behalf to the
public in an underwritten offering where the effective date of any such
registration statement shall not occur before the first anniversary of the
effective date of the immediately prior registration statement with respect to
which Fletcher was required to provide such agreement;

                           (b) all officers and directors of Champion and all
purchasers or subsequent holders of Offered Shares (other than subsequent
holders who acquire such securities through bona fide purchases in the public
market) are bound by and have entered into similar agreements; and

                           (c) Champion shall (and shall cause such underwriter
to) use best efforts to cause such stand-off period not to exist or, if it does
exist, to terminate at the earliest practicable date.




                                       12
<PAGE>
The obligations described in this Section 6 shall not apply to a registration
relating solely to employee benefit plans on Form S-1 or Form S-8 or similar
forms that may be promulgated in the future, or a registration relating solely
to a transaction on Form S-4 or similar forms that may be promulgated in the
future. Nothing in this Section 6 shall be deemed to limit Fletcher's right to
engage in assignments, pledges, hypothecations and non-sale transfers of Common
Stock (including, but not limited to, in connection with financing or hedging
transactions) and to deliver Common Stock in connection with such transactions.
This Section 6 supersedes Section 6 of the Prior Agreement.

                  7. Conversion and Redemption of Preferred Shares.

                           (a)      Preferred Shares and Additional Preferred
         Shares are convertible and redeemable into Common Shares in accordance
         with the terms and conditions set forth in Section 6 of the Certificate
         of Rights and Preferences. The form of the "Preferred Stock Conversion
         Notice" to be executed and delivered by Fletcher to Champion as
         specified therein is attached hereto as Annex G and the form of the
         "Preferred Stock Conversion Delivery Notice" to be executed and
         delivered by Champion to Fletcher as specified therein is attached
         hereto as Annex H.

                           (b)      If the number of Common Shares issued and
         issuable under this Agreement (including, but not limited to, all
         Common Shares issued or issuable upon conversion or redemption
         (notwithstanding any limitations on redemption on any date) of Series C
         Preferred Shares issued or issuable under this Agreement and the
         Warrant) on the date of any Preferred Stock Conversion Notice,
         Redemption Notice or Warrant Notice Date (as defined in the Warrant)
         (each a "Fletcher Notice Date") would result in Fletcher receiving more
         than seventeen and one-half percent (17.5%) of the shares of Common
         Stock outstanding as of the date of this Agreement (the "Original
         Number") and Fletcher's receipt of twenty percent (20%) or more of the
         Original Number would require the approval (the "Required Consent") of
         the holders of Common Stock pursuant to the listing requirements or
         rules of the NYSE, Champion (A) shall not issue Common Shares (the
         "Issuance Blockage") to the extent that the total number of Common
         Shares issued hereunder would exceed nineteen and ninety-nine
         one-hundredths percent (19.99%) of the Original Number, (B) shall
         notify Champion's shareholders of a shareholder meeting for the purpose
         of voting on the Required Consent within twenty (20) Business Days from
         and including the Fletcher Notice Date, which meeting shall be held on
         or before the sixtieth (60th) calendar day after the Fletcher Notice
         Date, and (C) shall otherwise use its best efforts to obtain, on or
         before the sixtieth (60th) day after the Fletcher Notice Date, the
         Required Consent for the issuance of all Common Shares issued or
         issuable under this Agreement (including, but not limited to, all
         Common Shares issued or issuable upon conversion or redemption of
         Series C Preferred Shares issued or issuable under this Agreement or
         upon exercise of the Warrant) including, but not limited to,
         recommending to Champion's shareholders that such shareholders give the
         Required Consent and not withdrawing such recommendation.
         Notwithstanding anything else in this paragraph, if at any time before
         the Required Consent has been obtained, or if Champion otherwise does
         not have sufficient authorized shares to fulfill its obligation, (i)
         Fletcher shall have the right to convert and redeem (subject to any
         restrictions on redemption) Series C Preferred Shares and exercise the
         Warrant, the conversion,




                                       13
<PAGE>
         redemption or exercise of which would not cause the total number of
         shares issued hereunder and under the Warrant to exceed nineteen and
         ninety-nine one-hundredths percent (19.99%) of the Original Number (or
         up to the total number of available authorized shares, if less) into
         Common Stock and (ii) Fletcher shall have the right to convert and
         redeem up to that amount of the Series C Preferred Shares and exercise
         the Warrant (regardless of any remaining time period that must pass
         before redemption may occur under the Certificate of Rights and
         Preferences), the conversion, redemption or exercise of which would
         cause the total number of shares issued hereunder to exceed nineteen
         and ninety-nine one-hundredths percent (19.99%) of the Original Number
         or that number which is unavailable for issuance, as the case may be,
         into the rights described herein (the "Excess Rights"). Fletcher shall
         exercise such right to obtain Excess Rights by delivering one or more
         written notices in the form attached hereto as Annex I (an "Excess
         Rights Notice") to Champion from time to time. The stated value of the
         Excess Rights shall be an amount equal to the product of (A) the
         Average Price on the Excess Notice Date multiplied by (B) the number of
         Common Shares that would be issuable in respect of such conversion but
         for the Issuance Blockage (without regard to any requirement to deliver
         a 65 Day Notice). At any time on or after the date of the first Excess
         Rights Notice, Fletcher may, at its sole option, convert its Excess
         Rights into a new series of Additional Preferred Shares. "Average
         Price" means (A) the daily volume weighted average price on the NYSE
         or, if no such sale takes place on such date, the average of the
         closing bid and asked prices on the NYSE thereof on such date, in each
         case as reported by Bloomberg, L.P. (or by such other entity as
         Fletcher and Champion may agree), or (B) if such Common Stock is not
         then listed or admitted to trading on the NYSE, the higher of (1) the
         book value per share thereof as determined by any firm of independent
         public accountants of recognized standing selected by the Board of
         Directors of Champion as of the last day of any month ending within
         sixty (60) days preceding the date as of which the determination is to
         be made and (2) the fair value per share thereof determined in good
         faith by the Board of Directors of Champion of a date which is within
         ten (10) days of the date as of which the determination is to be made.
         Although it is the intent and view of the parties to this Agreement
         that the transactions contemplated in this Agreement are to be treated
         as independent of the transactions contemplated under the Prior
         Agreement, in the event such transactions are deemed to be related
         transactions pursuant to the listing requirements and rules of the NYSE
         by the NYSE, the provisions of this Section 7(b) and of Section 7(b) of
         the Prior Agreement (including, but not limited to, the obligation to
         obtain the Required Consent) shall be deemed to apply to the number of
         Common Shares in the aggregate issued and issuable pursuant to the
         Prior Agreement and this Agreement.

                           (c)      The aggregate number of Common Shares
         issuable upon conversion or redemption of the Series B Preferred
         Shares, the Series C Preferred Shares and exercise of the Warrant, when
         combined with all shares of Common Stock then beneficially owned (as
         determined pursuant to Exchange Act Rule 13d-3) by Fletcher, shall not
         exceed the Maximum Number of shares of Common Stock. The "Maximum
         Number" equals the sum of 4,720,000 plus the Exercisable Number. The
         "Exercisable Number" is initially zero (0) and thereafter may be
         increased upon expiration of a sixty-five (65) day period (the "Notice
         Period") after Fletcher delivers a notice (a "65 Day Notice") to
         Champion designating an aggregate number of Common Shares in excess of





                                       14
<PAGE>

         the Maximum Number which shall be issuable upon conversion or
         redemption of the Series B Preferred Stock and the Series C Preferred
         Shares and exercise of the Warrant. A 65 Day Notice may be given at any
         time. From time to time following the Notice Period, Common Stock may
         be issued to Fletcher on any Business Day for any quantity of Common
         Stock, such that the aggregate number of shares of Common Stock issued
         hereunder is less than or equal to the Maximum Number. Nothing in this
         Section 6(c) shall limit or apply to the creation or conversion of
         Excess Rights under Section 6(b) hereunder or under the Prior
         Agreement. This Section 7(c) amends and supersedes Section 7(c) of the
         Prior Agreement.

                  8. Representations and Warranties of Fletcher. Fletcher hereby
represents and warrants to Champion on each Closing Date:

                           (a)      Fletcher has been duly incorporated and is
         validly existing under the laws of Bermuda.

                           (b)      The execution, delivery and performance of
         this Agreement by Fletcher have been duly authorized by all requisite
         corporate action and no further consent or authorization of Fletcher,
         its Board of Directors or its shareholders is required. This Agreement
         has been duly executed and delivered by Fletcher and, when duly
         authorized, executed and delivered by Champion, will be a valid and
         binding agreement enforceable against Fletcher in accordance with its
         terms, subject to bankruptcy, insolvency, reorganization, moratorium
         and similar laws of general applicability relating to or affecting
         creditors' rights generally and to general principles of equity.

                           (c)      Fletcher understands that no United States
         federal or state agency has passed on, reviewed or made any
         recommendation or endorsement of the Investment Securities.

                           (d)      Fletcher is an "accredited investor" as such
         term is defined in Regulation D promulgated under the Securities Act.

                           (e)      Fletcher is purchasing the Investment
         Securities for its own account for investment only and not with a view
         to, or for resale in connection with, the public sale or distribution
         thereof in the United States, except pursuant to sales registered under
         the Securities Act or an exemption therefrom.

                           (f)      Fletcher understands that the Investment
         Securities are being or will be offered and sold to it in reliance on
         specific exemptions from the registration requirements of United States
         federal securities laws and that Champion is relying on the truth and
         accuracy of, and Fletcher's compliance with, the representations,
         warranties, agreements, acknowledgments and understandings of Fletcher
         set forth herein in order to determine the availability of such
         exemptions and the eligibility of Fletcher to acquire the Investment
         Securities.

                           (g)      Fletcher has had access to documents
         publicly filed with the SEC by Champion, and has been given a
         reasonable opportunity to ask questions of Champion's officers
         regarding publicly available information concerning Champion.



                                       15
<PAGE>
                           (h)      Fletcher hereby waives its right of first
         offer contained in Section 9 of the Prior Agreement with respect to the
         transactions contemplated by this Agreement.

                  9. Right of First Offer. Subject to the terms and conditions
specified in this Section 9, Champion hereby grants to (i) Fletcher or (ii) any
affiliate or wholly-owned subsidiary of Fletcher (collectively, the "First Offer
Shareholders"), a right of first offer with respect to future sales by Champion
of its Offered Shares (as hereinafter defined). The term "Offered Shares" means
any shares of, or securities convertible into or exercisable or exchangeable for
any shares of, any class of its capital stock where the aggregate number of
shares or price per share of such capital stock issuable at closing, or upon
conversion, redemption exercise, exchange or otherwise, cannot be determined as
of the date such agreement is entered into or is subject to change as of any
date for any reason other than stock splits, recombinations, stock dividends or
the like. Each time Champion has a bona fide intention to offer to sell to a
third party any Offered Shares, Champion shall first negotiate with the First
Offer Shareholders to sell such Offered Shares in accordance with the following
provisions:

                           (a)      Champion shall deliver a notice in
         accordance with Section 20 of this Agreement ("Offer Notice") to
         Fletcher stating (i) its bona fide intention to offer such Offered
         Shares, (ii) the number of such Offered Shares proposed to be offered
         and (iii) the price and terms upon which it proposes to offer such
         Offered Shares.

                           (b)      For three (3) Business Days after delivery
         of the Offer Notice, Champion shall negotiate exclusively and in good
         faith with the First Offer Shareholders with respect to the proposed
         sale of Offered Shares and Champion shall not enter into or continue
         negotiations with, respond to, furnish information to, or consummate
         any transaction with any person or entity concerning any transaction
         regarding any shares of, or securities convertible into or exercisable
         or exchangeable for any shares of, any class of its capital stock.

                           (c)      Within three (3) Business Days after
         delivery of the Offer Notice, the First Offer Shareholders may elect by
         delivering a written notice to Champion, to purchase or obtain, at the
         price and on the terms specified in the Offer Notice (or on terms that
         are substantially similar to, or more favorable to Champion than, the
         terms contained in the Offer Notice), all but not less than all of the
         Offered Shares; provided, that Champion shall use commercially
         reasonable efforts to cause the First Offer Shareholders to be able to
         participate in the purchase of the Offered Shares to the extent the
         First Offer Shareholders desire to do so. If the Offer Notice specifies
         consideration other than cash is to be paid for the Offered Shares, the
         First Offer Shareholders may, at their sole option, (if they choose to
         purchase such Offered Shares) deliver either of (i) such consideration
         or (ii) cash equal to the fair market value of such consideration on
         the date and at the time such offer is accepted. The closing of any
         such transaction shall occur not later than twenty (20) Business Days
         after Champion receives written notice of such election. If the First
         Offer Shareholders do not so elect within three (3) days after delivery
         of the Offer Notice or if Champion and the First Offer Shareholders are
         unable to reach agreement on the terms of a sale of the Offered Shares
         to the First Offer Shareholders, then Champion may sell the Offered
         Shares to any Person at the price and




                                       16
<PAGE>
         on terms that are no less favorable to Champion than the terms
         contained in the Offer Notice within ninety (90) days after the date of
         the Offer Notice.

                           (d)      The right of first offer in this Section 9
         shall not be applicable to any issuance or sale of the following
         securities:

                                    (i)      Common Stock issued as
                  consideration for the acquisition of at least fifty percent
                  (50%) of the voting capital stock or assets of a bona fide
                  operating company in a similar or complementary line of
                  business to that of Champion, as determined reasonably and in
                  good faith by Champion's Board of Directors whether through
                  purchase, merger, consolidation, tender offer or otherwise,
                  provided that the purpose of Champion entering into any such
                  transaction shall not be to raise capital, directly or
                  indirectly, or otherwise to avoid the requirements of this
                  Section 9;

                                    (ii)     Common Stock issued pursuant to any
                  stock split, dividend or distribution payable in additional
                  shares of Common Stock or other securities or rights
                  convertible into, or entitling the holder thereof to receive
                  directly or indirectly, additional shares of Common Stock
                  without payment of any consideration by such holder;

                                    (iii)    Common Stock issuable or issued to
                  employees, consultants or directors of Champion directly or
                  pursuant to a stock option plan, employee stock purchase plan
                  or restricted stock plan, or other similar arrangements
                  related to compensation for services in effect on the date of
                  this Agreement or approved by Champion's shareholders, in each
                  case in the ordinary course of business consistent with
                  Champion's past practice;

                                    (iv)     Common Stock issued as dividends
                  on, or upon conversion or redemption of, Champion's Series A
                  Preferred Stock outstanding as of the date of this Agreement
                  and the Series B Preferred Shares and the Series C Preferred
                  Shares, or Common Stock issued upon exercise of the Warrant;

                                    (v)      Securities qualifying as "Excluded
                  Securities" as defined in the Warrant based upon satisfaction
                  of the provisions contained in the entirety of Section 12.9(d)
                  of the Warrant; or

                                    (vi)     Common Stock issued in a bona fide
                  firm commitment underwritten offering to the public with net
                  proceeds of at least twenty-five million dollars ($25,000,000)
                  to Champion, after underwriter's discounts or commissions and
                  other fees or expenses.

                  This Section 9(d) amends and supersedes Section 9(d) of the
Prior Agreement.

                           (e)      Notwithstanding the provisions of this
         Section 9, the right of first offer hereunder shall apply only during
         those periods from time to time when Fletcher, together with its
         affiliates and wholly-owned subsidiaries, owns Series C Preferred
         Shares or Series B Preferred Shares (i) convertible or redeemable
         (without regard to any



                                       17
<PAGE>
         65 Day Notice requirement, Issuance Blockage or passage of time
         required until the redemption rights vest) in the aggregate into a
         number of Common Shares and Prior Common Shares that exceeds three and
         one-half percent (3.5%) of the Original Number or (ii) with an
         aggregate Redemption Amount of at least fifteen million dollars
         ($15,000,000).

                  10. Covenants of Champion. Champion covenants and agrees with
Fletcher as follows:

                           (a)      For so long as Fletcher owns or has the
         right to purchase any Series C Preferred Shares or holds the Warrant,
         and for a period of one (1) year thereafter, Champion will (i) maintain
         the eligibility of the Common Stock for listing on the New York Stock
         Exchange, Nasdaq National Market, or American Stock Exchange and (ii)
         regain the eligibility of the Common Stock for listing or quotation on
         all markets and exchanges including the New York Stock Exchange, Nasdaq
         National Market, or American Stock Exchange, in the event that the
         Common Stock is delisted by the New York Stock Exchange or any other
         applicable market or exchange; and will use commercially reasonable
         efforts to (iii) cause the representations and warranties contained in
         Section 4 to be and remain true and correct.

                           (b)      Champion will provide Fletcher with an
         opportunity, which shall not be less than one (1) full Business Day to
         review and comment on any public disclosure by Champion of information
         regarding this Agreement and the transactions contemplated hereby,
         prior to such public disclosure. Beginning on the date hereof and for
         so long as Fletcher owns or has the right to purchase any Series C
         Preferred Shares or holds the Warrant and for a period of ninety (90)
         days thereafter, Champion will promptly notify Fletcher immediately
         following any press release or other information disseminated to any
         shareholder, analyst, or media source.

                           (c)      As soon as such information is available
         (but in no event later than two (2) weeks after the Closing Date),
         Champion shall deliver to Fletcher a written notice stating the number
         of outstanding shares of Common Stock as of the Initial Closing Date.

                           (d)      Champion will make all filings required by
         law with respect to the transactions contemplated hereby.

                           (e)      Champion will comply with the terms and
         conditions of the Warrant and the Series C Preferred Shares as set
         forth in the Certificate of Rights and Preferences and will not amend
         the Certificate of Rights and Preferences without the required consent
         of the holders of Series C Preferred Shares and will not amend the
         Warrant without the consent of the registered holder of the Warrant.

                           (f)      For so long as Fletcher holds any Series C
         Preferred Shares or the Warrant, prior to the filing of each of its
         quarterly reports on Form 10-Q with the SEC, Champion shall deliver to
         Fletcher a review report relating to the final consolidated unaudited
         financial statements contained therein, prepared by
         PricewaterhouseCoopers LLP in accordance with Statements of Auditing
         Standard No. 71. For so long as Fletcher





                                       18
<PAGE>
         (i) no longer holds any Series B Preferred Shares or Fletcher Rights
         (as defined in the Prior Agreement) and (ii) holds any Series C
         Preferred Shares or the Warrant, Fletcher shall pay for one-half (1/2)
         of the cost of the two (2) such quarterly reviews for the quarters
         ending March 31 and September 30 of each year for up to an aggregate
         maximum of $50,000; provided, however, that Champion shall pay all
         other amounts payable for such reports and the full amount payable for
         the quarter ending June 30 of each year.

                           (g)      Champion shall use commercially reasonable
         efforts to cause the Common Shares to be eligible for book-entry
         transfer through The Depository Trust Company (or any successor
         thereto) as soon as practicable after the date of this Agreement and
         thereafter to use commercially reasonable efforts to maintain such
         eligibility.

                           (h)      Champion shall at all times reserve for
         issuance such number of its shares of Common Stock as shall from time
         to time be sufficient to effect (i) the conversion of all such Series C
         Preferred Shares and to satisfy its delivery obligation upon such
         conversion and to effect the redemption of the Series C Preferred
         Shares and (ii) full exercise of the Warrant.

                           (i)      Champion shall deliver a notice (an
         "Increase Notice") stating the increase, if any, in the aggregate
         number of shares of Common Stock outstanding as of the last day of the
         preceding month over the number outstanding as of the last day of the
         second preceding month, or in the case of the last day of the month
         immediately following the Initial Closing Date, the number of shares
         outstanding specified in Section 4(l). Unless expressly waived by
         Fletcher, Champion shall deliver an Increase Notice to Fletcher on or
         before the tenth (10th) day of every calendar month from and including
         the Initial Closing Date.

                           (j)      Champion shall, within one (1) Business Day
         after and excluding each Closing Date publicly distribute a press
         release disclosing the material terms of such Closing and shall, within
         three (3) Business Days after and excluding each Closing Date file a
         report with the SEC on Form 8-K with respect to the same.

                  11.      Consolidation, Merger, Etc. In case Champion shall be
a party to any Business Combination (as defined in the Certificate of Rights and
Preferences), Fletcher and its assigns shall have the rights set forth in the
Certificate of Rights and Preferences and the Warrant regarding Business
Combinations in addition to the rights contained in this Agreement. "Acquirer"
means, in connection with any Business Combination, the continuing or surviving
corporation of a consolidation or merger with Champion (if other than Champion),
the transferee of all or substantially all of the properties or assets of the
Company, the corporation consolidating with or merging into Champion in a
consolidation or merger in connection with which Common Stock is changed into or
exchanged for stock or other securities of any other person or cash or any other
property, or, in the case of a capital reorganization or reclassification,
Champion. Champion agrees that it will not enter into an agreement with an
Acquirer for a Business Combination unless such agreement expressly obligates
the Acquirer to assume all of Champion's obligations under this Agreement, the
Certificate of Rights and Preferences and the





                                       19
<PAGE>
Warrant including, but not limited to, the dividend, liquidation, conversion,
exercise, redemption, voting and other provisions regarding the Series C
Preferred Stock, the Warrant and the Fletcher Rights contained herein and
therein. Without limiting the foregoing, all unexercised and unexpired Fletcher
Rights shall automatically be converted into equivalent rights with respect to
the Acquirer including, but not limited to, the right to receive the equivalent
of the Additional Preferred Shares issuable upon the exercise of such rights and
to receive the consideration for such Additional Preferred Shares set forth in
Section 6(F) of the Certificate of Rights and Preferences; provided that if the
Company delivers to Fletcher a written notice in the form attached as Annex K
hereto stating its election to redeem the Fletcher Rights no later than the
fifteenth (15th) calendar day after and excluding the date on which the proposed
Business Combination is first publicly disclosed and no later than the fifteenth
(15th) calendar day before and excluding the closing date of such Business
Combination, then upon such closing date, any Fletcher Rights that remain
unexercised as of such closing date shall be redeemed and Champion shall pay to
Fletcher (or shall cause Acquirer to pay to Fletcher) on or before such closing
date cash equal to the product of (i) the aggregate amount of such Fletcher
Rights multiplied by (ii) the Merger Payment Percentage (as defined in the
Certificate of Rights and Preferences). On or before the date an agreement is
entered into with an Acquirer for a Business Combination, the Company shall
deliver to Fletcher written notice that the Acquirer has assumed such
obligations. Provided that Champion is in compliance with this Section 11,
Section 3 of the Warrant and Section 6(F) of the Certificate of Rights and
Preferences, Fletcher and other holders of Series C Preferred Shares shall vote
their Series C Preferred Shares in favor of any Business Combination upon which,
in accordance with applicable law or the Certificate of Rights and Preferences,
Fletcher or such holders shall have the right to vote as a single class not
aggregated with holders of the Common Stock; provided, however, that the
Business Combination agreements must provide (A) either for (i) such rights,
preferences and privileges for the Series C Preferred Shares pursuant to the
provisions of this Agreement and the Certificate of Rights and Preferences or
(ii) the redemption of any unexercised and unexpired Fletcher Rights as provided
in this Section 11, and the payment in exchange for the Series C Preferred
Shares pursuant to a Business Combination Restriction Notice under Section 6(F)
of the Certificate of Rights and Preferences and (B) such rights, preferences
and privileges for the Warrant as set forth in the Warrant and this Agreement.
Notwithstanding the foregoing, this Section 11 shall not be construed to
obligate Fletcher or its assigns to vote their Common Shares in favor of any
Business Combination.

         12.      Covenants of Fletcher. Fletcher hereby covenants and agrees
with Champion that:

                           (a)      Neither Fletcher, nor any of its affiliates,
         will at any time offer or sell any Investment Securities other than
         pursuant to registration under the Securities Act or pursuant to an
         available exemption therefrom.

                           (b)      Neither Fletcher, nor any of its affiliates,
         shall engage an underwriter for an underwritten public offering of
         Common Shares, unless such underwriter shall be reasonably satisfactory
         to Champion.

                                       20
<PAGE>
                           (c)      Neither Fletcher, nor any of its affiliates,
         shall engage in short sales of securities issued by Champion. This
         Section 12(c) supersedes Section 12(c) of the Prior Agreement.

                           (d)      Fletcher, in its capacity as sole holder of
         all of the shares of Series B-1 Preferred Stock outstanding, hereby
         consents (1) to the amendment and restatement of the Certificate of
         Rights and Preferences of Series B-1 Cumulative Convertible Preferred
         Stock of the Company in accordance with the terms hereof and (2) to the
         issuance of the Series C Preferred Shares and the Warrant in accordance
         with the terms hereof.

         13.    Legend. Subject to Section 5, Fletcher understands that the
         certificates or other instruments representing the Investment
         Securities shall bear a restrictive legend in the following form (and a
         stop transfer order may be placed against transfer of such certificates
         or other instruments):

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
         APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR
         INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
         ASSIGNED UNLESS (1) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER
         SUCH ACT COVERING SUCH SECURITIES, OR (2) THE SALE IS MADE IN
         ACCORDANCE WITH RULE 144 OR (3) THE SALE IS MADE IN ACCORDANCE WITH
         ANOTHER APPLICABLE EXEMPTION UNDER THE SECURITIES ACT AND THE COMPANY
         RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES
         REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
         TRANSFER OR ASSIGNMENT IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
         DELIVERY REQUIREMENTS OF SUCH ACT.

                  The legend set forth above shall be removed and Champion shall
issue a certificate without such legend to any holder of Investment Securities
if, unless otherwise required by state securities laws, (a) such shares are sold
pursuant to Rule 144 or an effective Registration Statement under the Securities
Act, or (b) such holder provides Champion with an opinion of counsel reasonably
satisfactory to Champion that such shares may be publicly sold pursuant to an
exemption from such registration requirements without restriction.

         14.      Conditions Precedent to Fletcher's Obligations.  The
obligations of Fletcher hereunder are subject to the performance by Champion of
its obligations hereunder and to the satisfaction of the following additional
conditions precedent, unless expressly waived in writing by Fletcher:

                           (a)      On each Closing Date, (i) the
         representations and warranties made by Champion in this Agreement shall
         be true and correct, except those representations and warranties which
         address matters only as of a particular date, which shall be true and
         correct as of such date; (ii) Champion shall have complied fully with
         all of the covenants



                                       21
<PAGE>
         and agreements in this Agreement; and (iii) Fletcher shall have
         received (A) on the Initial Closing Date a certificate of the Chief
         Financial Officer of Champion dated such date and to such effect and
         (B) on each Subsequent Closing Date a certificate of the Chief
         Executive Officer and the Chief Financial Officer of Champion dated
         such date and to such effect.

                           (b)      On each Closing Date, Champion shall have
         delivered to Fletcher an opinion of Dykema Gossett PLLC reasonably
         satisfactory to Fletcher, dated the date of delivery, confirming in
         substance the matters covered in paragraphs (a), (b), (c), (d), (e),
         (f) and subsection (i) of (g) of Section 4 hereof and to the effect
         that the offer and sale of the Investment Securities to Fletcher
         hereunder do not require registration under the Securities Act.

                           (c)      On the Initial Closing Date, Fletcher shall
         have received a letter from PricewaterhouseCoopers LLP to the effect
         that, as of such date, it consents to the inclusion in this Agreement
         of the Auditor Report. On each Subsequent Closing Date, Fletcher shall
         receive a report of PricewaterhouseCoopers LLP, together with the
         accompanying consolidated financial statement and schedules of Champion
         and results of Champion's operations and cash flows, as such report
         appears in the most recent Form 10-K filed by Champion with the SEC.

         15.      Conditions Precedent to Champion's Obligations. The
obligations of Champion hereunder are subject to the performance by Fletcher of
its obligations hereunder and to the satisfaction (unless expressly waived in
writing by Champion) of the additional conditions precedent that, on each
Closing Date: (i) the representations and warranties made by Fletcher in this
Agreement shall be true and correct; (ii) Fletcher shall have complied fully
with all the covenants and agreements in this Agreement; and (iii) Champion
shall have received on each such date a certificate of an appropriate officer of
Fletcher dated such date and to such effect.

         16.      Fees and Expenses.  Each of Fletcher and Champion agrees to
pay its own expenses incident to the performance of its obligations hereunder,
including, but not limited to the fees, expenses and disbursements of such
party's counsel, except as is otherwise expressly provided in this Agreement.

         17.      Non-Performance.

                           (a)      If Champion, at any time, shall fail to
         deliver the Investment Securities to Fletcher required to be delivered
         pursuant to this Agreement, in accordance with the terms and conditions
         of this Agreement, for any reason other than the failure of any
         condition precedent to Champion's obligations hereunder or the failure
         by Fletcher to comply with its obligations hereunder, then Champion
         shall:

                                    (i)      indemnify and hold Fletcher
                  harmless against any loss, claim or damage (including without
                  limitation, incidental and consequential damages) arising from
                  or as a result of such failure by Champion; and

                                    (ii)     reimburse Fletcher for all of its
                  reasonable out-of-pocket expenses, including fees and
                  disbursements of its counsel, incurred by



                                       22
<PAGE>
                  Fletcher in connection with this Agreement and the
                  transactions contemplated herein and therein.

                           (b)      If Fletcher, at any time, shall fail to make
         the payments to Champion required to be delivered pursuant to this
         Agreement, in accordance with the terms and conditions of this
         Agreement, for any reason other than the failure of any condition
         precedent to Fletcher's obligations hereunder or the failure by
         Champion to comply with its obligations hereunder, then Fletcher shall:

                                    (i)      indemnify and hold Champion
                  harmless against any loss, claim or damage (including without
                  limitation, incidental and consequential damages) arising from
                  or as a result of such failure by Fletcher; and

                                    (ii)     reimburse Champion for all of its
                  reasonable out-of-pocket expenses, including fees and
                  disbursements of its counsel, incurred by Champion in
                  connection with this Agreement and the transactions
                  contemplated herein and therein.

18.      Indemnification.

                           (a)      Indemnification of Fletcher. Champion hereby
         agrees to indemnify Fletcher and each of its officers, directors,
         employees, agents and affiliates and each person that controls (within
         the meaning of Section 20 of the Exchange Act) any of the foregoing
         persons (each a "Fletcher Indemnified Party") against any claim,
         demand, action, liability, damages, loss, cost or expense (including,
         without limitation, reasonable legal fees and expenses) (a
         "Proceeding"), that it may incur in connection with any of the
         transactions contemplated hereby arising out of or based upon:

                                    (i)      any untrue or alleged untrue
                  statement of a material fact in a SEC Filing by Champion or
                  any of its affiliates or any person acting on its or their
                  behalf or omission or alleged omission to state therein any
                  material fact necessary in order to make the statements, in
                  the light of the circumstances under which they were made, not
                  misleading by Champion or any of its affiliates or any person
                  acting on its or their behalf;

                                    (ii)     any of the representations or
                  warranties made by Champion herein being untrue or incorrect
                  at the time such representation or warranty was made; and

                                    (iii)    any breach or non-performance by
                  Champion of any of its covenants, agreements or obligations
                  under this Agreement, the Certificate of Rights and
                  Preferences or the Warrant;

and Champion hereby agrees to reimburse each Fletcher Indemnified Party for any
reasonable legal or other expenses incurred by such Fletcher Indemnified Party
in investigating or defending any such Proceeding; provided, however, that the
foregoing indemnity shall not apply to any Proceeding to the extent that it
arises out of, or is based upon, the gross negligence or willful misconduct of
Fletcher in connection therewith. Furthermore, the foregoing indemnity rights



                                       23
<PAGE>
will not take effect unless and until the total amount of the indemnification in
the aggregate is ten thousand dollars ($10,000) or greater.

                           (b)      Indemnification of Champion. Fletcher hereby
         agrees to indemnify Champion and each of its officers, directors,
         employees, agents and affiliates and each person that controls (within
         the meaning of Section 20 of the Exchange Act) any of the foregoing
         persons (each a "Champion Indemnified Party") against any Proceeding,
         that it may incur in connection with any of the transactions
         contemplated hereby arising out of or based upon:

                                    (i)      any untrue or alleged untrue
                  statement of a material fact included in an SEC filing by
                  Champion with the express written consent of Fletcher therefor
                  by Fletcher or any of its affiliates or any person acting on
                  its or their behalf or omission or alleged omission to state
                  any such material fact necessary in order to make the
                  statements, in the light of the circumstances under which they
                  were made, not misleading by Fletcher or any of its affiliates
                  or any person acting on its or their behalf;

                                    (ii)     any of the representations or
                  warranties made by Fletcher herein being untrue or incorrect
                  at the time such representation or warranty was made; and

                                    (iii)    any breach or non-performance by
                  Fletcher of any of its covenants, agreements or obligations
                  under this Agreement;

and Fletcher hereby agrees to reimburse each Champion Indemnified Party for any
reasonable legal or other expenses incurred by such Champion Indemnified Party
in investigating or defending any such Proceeding; provided, however, that the
foregoing indemnity shall not apply to any Proceeding to the extent that it
arises out of, or is based upon, the gross negligence or willful misconduct of
Champion in connection therewith. Furthermore, the foregoing indemnity rights
will not take effect unless and until the total amount of the indemnification in
the aggregate is ten thousand dollars ($10,000) or greater.

                           (c)      Conduct of Claims.

                                    (i)      Whenever a claim for
                  indemnification shall arise under this Section 18, the party
                  seeking indemnification (the "Indemnified Party"), shall
                  notify the party from whom such indemnification is sought (the
                  "Indemnifying Party") in writing of the Proceeding and the
                  facts constituting the basis for such claim in reasonable
                  detail;

                                    (ii)     Such Indemnifying Party shall have
                  the right to retain the counsel of its choice in connection
                  with such Proceeding and to participate at its own expense in
                  the defense of any such Proceeding; provided, however, that
                  counsel to the Indemnifying Party shall not (except with the
                  consent of the relevant Indemnified Party) also be counsel to
                  such Indemnified Party. In no event shall the Indemnifying
                  Party be liable for fees and expenses of more than





                                       24
<PAGE>
                  one counsel (in addition to any local counsel) separate from
                  its own counsel for all Indemnified Parties in connection with
                  any one action or separate but similar or related actions in
                  the same jurisdiction arising out of the same general
                  allegations or circumstances; and

                                    (iii)    No Indemnifying Party shall,
                  without the prior written consent of the Indemnified Parties
                  (which consent shall not be unreasonably withheld), settle or
                  compromise or consent to the entry of any judgment with
                  respect to any litigation, or any investigation or proceeding
                  by any governmental agency or body, commenced or threatened,
                  or any claim whatsoever in respect of which indemnification
                  could be sought under this Section unless such settlement,
                  compromise or consent (A) includes an unconditional release of
                  each Indemnified Party from all liability arising out of such
                  litigation, investigation, proceeding or claim and (B) does
                  not include a statement as to or an admission of fault,
                  culpability or a failure to act by or on behalf of any
                  Indemnified Party.

         19.      Survival of the Representations, Warranties, etc. The
respective representations, warranties, and agreements made herein by or on
behalf of the parties hereto shall remain in full force and effect, regardless
of any investigation made by or on behalf of the other party to this Agreement
or any officer, director or employee of, or person controlling or under common
control with, such party and will survive delivery of and payment for any
Investment Securities issuable hereunder.

         20.      Notices.  All communications hereunder shall be in writing and
delivered as set forth below.

                           (a)      If sent to Fletcher, all communications
         shall be delivered by hand, sent by reputable overnight courier or
         transmitted and confirmed by facsimile to Fletcher, unless otherwise
         notified in writing of a substitute address, at:

                           Fletcher International, Ltd.
                           c/o A. S. & K. Services Ltd.
                           Cedar House, 41 Cedar Avenue
                           Hamilton HM EX
                           Bermuda
                           Attention:  Felicity Holmes, Corporate Administrator
                           Telephone:  441-295-2244
                           Facsimile:  441-292-8666

                           with a copy to:

                           Fletcher Asset Management, Inc.
                           22 East 67th Street
                           New York, NY  10021
                           Attention:  Peter Zayfert
                           Telephone:  (212) 284-4800
                           Facsimile:  (212) 284-4801



                                       25
<PAGE>

                                    with a copy to:

                                    Skadden, Arps, Slate, Meagher & Flom LLP
                                    1440 New York Avenue, N.W.
                                    Washington, D.C. 20005
                                    Attention:       Stephen W. Hamilton, Esq.
                                    Telephone:       (202) 371-7010
                                    Facsimile:       (202) 393-5760

                           (b)      If sent to Champion, all communications
         shall be delivered by hand, sent by reputable overnight courier or
         transmitted and confirmed by facsimile to Champion, unless otherwise
         notified in writing of a substitute address, at:

                                    Champion Enterprises, Inc.
                                    2701 Cambridge Court
                                    Suite 300
                                    Auburn Hills, MI  48326
                                    Attention:       Walter R. Young
                                    Telephone:       (248) 340-9090
                                    Facsimile:       (248) 340-9345

                                    with a copy to:

                                    Dykema Gossett PLLC
                                    39577 North Woodward Avenue
                                    Bloomfield Hills, MI  48304
                                    Attention:       D. Richard McDonald
                                    Telephone:       (248) 203-0859
                                    Facsimile:       (248) 203-0763

To the extent that any funds shall be delivered to Champion by wire transfer,
unless otherwise instructed by Champion, such funds should be delivered in
accordance with the following wire instructions:

                                    Champion Enterprises, Inc.
                                    Account Number:   1076-118940
                                    ABA Number:   072000096
                                    Bank:   Comerica Bank
                                    Account Name: Champion Enterprises, Inc.

         21.      Miscellaneous.

                           (a)      The parties may execute and deliver this
         Agreement as a single document or in any number of counterparts,
         manually, by facsimile or by other electronic means, including
         contemporaneous xerographic or electronic reproduction by each party's
         respective attorneys. Each counterpart shall be an original, but a
         single document


                                       26
<PAGE>

         or all counterparts together shall constitute one instrument that shall
         be the agreement. This Agreement shall become effective when each party
         executes and delivers this Agreement to the other party.

                           (b)      This Agreement shall inure to the benefit of
         and be binding upon the parties hereto, their respective successors and
         assigns and, with respect to Section 18 hereof, shall inure to the
         benefit of their respective officers, directors, employees, agents,
         affiliates and controlling persons, and no other person shall have any
         right or obligation hereunder. Champion may not assign this Agreement.
         Notwithstanding anything to the contrary in this Agreement, Fletcher
         may assign, pledge, hypothecate or transfer any of the rights and
         associated obligations contemplated by this Agreement (including, but
         not limited to, the Series C Preferred Shares, the Warrant and the
         Common Shares), in whole or in part, at its sole discretion (including,
         but not limited to, assignments, pledges, hypothecations and transfers
         in connection with financing or hedging transactions with respect to
         this Agreement, the Series C Preferred Shares, the Warrant and the
         Common Shares), provided that any such assignment, pledge,
         hypothecation or transfer must comply with applicable federal and state
         securities laws, and provided further that the rights contained in
         Section 9 hereof may not be assigned, pledged, hypothecated or
         transferred. No person acquiring Common Stock from Fletcher pursuant to
         a public market purchase shall thereby obtain any of the rights
         contained in this Agreement. This Agreement constitutes the entire
         agreement and supersedes all prior agreements and understandings, both
         written and oral, between the parties hereto with respect to the
         subject matter of this Agreement. Except as provided in this Section
         21(b), this Agreement is not intended to confer upon any person other
         than the parties hereto any rights or remedies hereunder.
         Notwithstanding the provisions of this Section 21(b) set forth above
         and Section 6 herein, Fletcher shall not assign, pledge, hypothecate or
         transfer any of the rights or associated obligations contemplated by
         this Agreement (including, but not limited to, the Series C Preferred
         Shares, the Warrant and the Common Shares), in whole or in part, to any
         entity set forth on Schedule 21(b) hereto; provided that this
         restriction shall not apply to (i) any such assignment, pledge,
         hypothecation or transfer in connection with a Business Combination (as
         defined in the Certificate of Rights and Preferences) that is approved
         at any time by the requisite vote of the Company's shareholders or
         Board of Directors or (ii) the tender of Common Stock in any publicly
         announced tender offer.

                           (c)      This Agreement shall be governed by, and
         construed in accordance with, the internal laws of the State of New
         York, and each of the parties hereto hereby submits to the
         non-exclusive jurisdiction of any state or federal court in the State
         of New York and any court hearing any appeal therefrom, over any suit,
         action or proceeding against it arising out of or based upon this
         Agreement (a "Related Proceeding"). Each of the parties hereto hereby
         waives any objection to any Related Proceeding in such courts whether
         on the grounds of venue, residence or domicile or on the ground that
         the Related Proceeding has been brought in an inconvenient forum.

                           (d)      Each party represents and acknowledges that,
         in the negotiation and drafting of this Agreement and the other
         instruments and documents required or contemplated hereby, it has been
         represented by and relied upon the advice of counsel of





                                       27
<PAGE>
         its choice. Each party hereby affirms that its counsel has had a
         substantial role in the drafting and negotiation of this Agreement and
         such other instruments and documents. Therefore, each party agrees that
         no rule of construction to the effect that any ambiguities are to be
         resolved against the drafter shall be employed in the interpretation of
         this Agreement and such other instruments and documents.

                           (e)      Without prejudice to other rights or
         remedies hereunder (including any specified interest rate), and except
         as otherwise expressly set forth herein, interest shall be due on any
         amount that is due pursuant to this Agreement and has not been paid
         when due, calculated for the period from and including the due date to
         but excluding the date on which such amount is paid at the prime rate
         of U.S. money center banks as published in The Wall Street Journal (or
         if The Wall Street Journal does not exist or publish such information,
         then the average of the prime rates of three U.S. money center banks
         agreed to by the parties) plus two percent (2%).

                           (f)      Fletcher and Champion stipulate that the
         remedies at law of the parties hereto in the event of any default or
         threatened default by either party in the performance of or compliance
         with any of the terms of this Agreement, the Certificate of Rights and
         Preferences and the Warrant are not and will not be adequate and that,
         to the fullest extent permitted by law, such terms may be specifically
         enforced by a decree for the specific performance of any agreement
         contained herein or by an injunction against a violation of any of the
         terms hereof or otherwise.

                           (g)      Any and all remedies set forth in this
         Agreement, the Certificate of Rights and Preferences and the Warrant:
         (i) shall be in addition to any and all other remedies Fletcher or
         Champion may have at law or in equity, (ii) shall be cumulative, and
         (iii) may be pursued successively or concurrently as each of Fletcher
         and Champion may elect. The exercise of any remedy by Fletcher or
         Champion shall not be deemed an election of remedies or preclude
         Fletcher or Champion, respectively, from exercising any other remedies
         in the future.

                           (h)      Champion agrees that the parties have
         negotiated in good faith and at arms' length concerning the
         transactions contemplated herein, and that Fletcher would not have
         agreed to the terms of this Agreement without each and every of the
         terms, conditions, protections and remedies provided herein and the
         Certificate of Rights and Preferences and the Warrant. Except as
         specifically provided otherwise in this Agreement, the Certificate of
         Rights and Preferences and the Warrant, Champion's obligations to
         indemnify and hold Fletcher harmless in accordance with Section 18 of
         this Agreement are obligations of Champion that Champion promises to
         pay to Fletcher when and if they become due. Champion shall record any
         such obligations on its books and records in accordance with U.S.
         generally accepted accounting principles. Except as specifically
         provided otherwise in this Agreement, the Certificate of Rights and
         Preferences and the Warrant, Fletcher's obligations to indemnify and
         hold Champion harmless in accordance with Section 18 of this Agreement
         are obligations of Fletcher that Fletcher promises to pay to Champion
         when and if they become due. Fletcher shall record any such obligations
         on its books and records in accordance with U.S. generally accepted
         accounting principles.



                                       28
<PAGE>

                           (i)      This Agreement may be amended, modified or
         supplemented in any and all respects, but only by a written instrument
         signed by Fletcher and Champion expressly stating that such instrument
         is intended to amend, modify or supplement this Agreement.

                           (j)      Each of the parties will cooperate with the
         others and use its best efforts to prepare all necessary documentation,
         to effect all necessary filings, and to obtain all necessary permits,
         consents, approvals and authorizations of all governmental bodies and
         other third-parties necessary to consummate the transactions
         contemplated by this Agreement.

                           (k)      For purposes of this Agreement, except as
         otherwise expressly provided or unless the context otherwise requires:
         (i) the terms defined in this Agreement have the meanings assigned to
         them in this Agreement and include the plural as well as the singular,
         and the use of any gender herein shall be deemed to include the other
         gender and neuter gender of such term; (ii) accounting terms not
         otherwise defined herein have the meanings assigned to them in
         accordance with U.S. generally accepted accounting principles; (iii)
         references herein to "Articles", "Sections", "Subsections",
         "Paragraphs" and other subdivisions without reference to a document are
         to designated Articles, Sections, Subsections, Paragraphs and other
         subdivisions of this Agreement, unless the context shall otherwise
         require; (iv) a reference to a Subsection without further reference to
         a Section is a reference to such Subsection as contained in the same
         Section in which the reference appears, and this rule shall also apply
         to Paragraphs and other subdivisions; (v) the words "herein", "hereof",
         "hereunder" and other words of similar import refer to this Agreement
         as a whole and not to any particular provision; (vi) the term "include"
         or "including" shall mean without limitation; (vii) the table of
         contents to this Agreement and all section titles or captions contained
         in this Agreement or in any Schedule or Exhibit annexed hereto or
         referred to herein are for convenience only and shall not be deemed a
         part of this Agreement and shall not affect the meaning or
         interpretation of this Agreement; (viii) any agreement, instrument or
         statute defined or referred to herein means such agreement, instrument
         or statute as from time to time amended, modified or supplemented,
         including (in the case of agreements or instruments) by waiver or
         consent and (in the case of statutes) by succession of comparable
         successor statues and references to all attachments thereto and
         instruments incorporated therein; and (ix) references to a person are
         also to its permitted successors and assigns and, in the case of an
         individual, to his or her heirs and estate, as applicable.

                           (l)      If any term or other provision of this
         Agreement is invalid, illegal or incapable of being enforced by any
         rule of law or public policy all other conditions and provisions of
         this Agreement shall nevertheless remain in full force and effect. If
         the final judgment of a court of competent jurisdiction or other
         authority declares that any term or provision hereof is invalid, void
         or unenforceable, the parties agree that the court making such
         determination shall have the power to reduce the scope, duration, area
         or applicability of the term or provision, to delete specific words or
         phrases, or to replace any invalid, void or unenforceable term or
         provision with a term or provision that is valid and enforceable and
         that comes closest to expressing the intention of the invalid or
         unenforceable term or provision. Upon such determination that any term
         or other




                                       29
<PAGE>

         provision is invalid, illegal or incapable of being enforced, the
         parties hereto shall negotiate in good faith to modify this Agreement
         so as to effect the original intent of the parties as closely as
         possible in a mutually acceptable manner in order that the transactions
         contemplated hereby be consummated as originally contemplated to the
         fullest extent possible.

                           (m)      Time shall be of the essence in this
         Agreement.

                                    [SIGNATURE PAGE FOLLOWS]




                                       30
<PAGE>
                  IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement, all as of the day and year first above written.


                                       CHAMPION ENTERPRISES, INC.



                                       By:        /s/ Walter R. Young
                                             ----------------------------------
                                       Name:
                                              ---------------------------------
                                       Title:
                                               --------------------------------



                                       FLETCHER INTERNATIONAL, LTD., by its duly
                                       authorized investment advisor,
                                       FLETCHER ASSET MANAGEMENT, INC.



                                       By:    /s/ Denis J. Kiely
                                            -----------------------------------
                                       Name:    Denis J. Kiely
                                              ---------------------------------
                                       Title:    Deputy CEO
                                               --------------------------------












                                       31
<PAGE>
                                                                         ANNEX A

                [FORM OF CERTIFICATE OF RIGHTS AND PREFERENCES OF
               SERIES C CUMULATIVE CONVERTIBLE PREFERRED STOCK OF
                           CHAMPION ENTERPRISES, INC.]
























                                       A-1

<PAGE>
                                                                         ANNEX B

                            [FORM OF FLETCHER NOTICE]


                                                 _____________, __

Champion Enterprises, Inc.
Suite 300
2701 Cambridge Court
Auburn Hills, Michigan  48326
Attention:

Ladies and Gentlemen:

                  Fletcher International, Ltd. ("Fletcher") hereby elects to
exercise the Fletcher Rights (as defined in the Agreement (the "Agreement")
dated as of March 29, 2002 by and between Fletcher and Champion Enterprises,
Inc. Capitalized terms not otherwise defined herein shall have the meanings
ascribed thereto in the Agreement.

                  In accordance with the terms of Section 3 of the Agreement,
the Additional Issuance Price shall be ______________________ and the Subsequent
Closing Date shall be __________.



                                     FLETCHER INTERNATIONAL, LTD., by its
                                     duly authorized investment advisor,
                                     FLETCHER ASSET MANAGEMENT, INC.



                                     By: ____________________________________
                                     Name: __________________________________
                                     Title:__________________________________



                                     By:_____________________________________
                                     Name: __________________________________
                                     Title: _________________________________









                                       B-1
<PAGE>
AGREED AND ACKNOWLEDGED:
CHAMPION ENTERPRISES, INC.


By: ___________________________________
Name: _________________________________
Title: ________________________________






























                                       B-2
<PAGE>
                                                                         ANNEX C

                           [FORM OF REDEMPTION NOTICE]

                                                      _____________, __

Champion Enterprises, Inc.
2701 Cambridge Court
Suite 300
Auburn Hills, Michigan  48326
Attention:

Ladies and Gentlemen:

                  Fletcher International, Ltd. ("Fletcher") hereby elects to
exercise the Redemption Rights (as defined in the Agreement (the "Agreement")
dated as of March 29, 2002 by and between Fletcher and Champion Enterprises,
Inc. as to __________ shares of the Series C Cumulative Convertible Preferred
Stock of Champion Enterprises, Inc. Capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Agreement.



                                      FLETCHER INTERNATIONAL, LTD., by its
                                      duly authorized investment advisor,
                                      FLETCHER ASSET MANAGEMENT, INC.





                                      By: ____________________________________
                                      Name: __________________________________
                                      Title: _________________________________



                                      By: ____________________________________
                                      Name: __________________________________
                                      Title: _________________________________











                                       C-1
<PAGE>
AGREED AND ACKNOWLEDGED:
CHAMPION ENTERPRISES, INC.



By: ____________________________________
Name: __________________________________
Title: _________________________________


































                                       C-2
<PAGE>
                                                                         ANNEX D

                            [FORM OF CHAMPION NOTICE]

Fletcher International, Ltd.
C/o Fletcher Asset Management, Inc.
22 East 67th Street
New York, NY  10021
Attention:        Peter Zayfert
Telephone:        (212) 284-4800
Facsimile:        (212) 284-4801

Ladies and Gentlemen:

                  Reference is made to the Agreement (the "Agreement") dated as
of March 29, 2002 by and between Champion Enterprises, Inc. ("Champion") and
Fletcher International, Ltd. ("Fletcher") and the Redemption Notice dated
__________. Capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Agreement.

                  Champion hereby elects to redeem __________ shares of Series C
Cumulative Convertible Preferred Stock pursuant to Section 1(d) of the Agreement
and Section 6(B) of the Certificate of Rights and Preferences with:

IF CASH ELECTION STATE AMOUNT OF CASH
________________CASH


IF COMMON STOCK ELECTION STATE AMOUNT OF COMMON STOCK AND BASIS FOR CALCULATION

________________REGISTERED COMMON STOCK

________________UNREGISTERED COMMON STOCK



                                      CHAMPION ENTERPRISES, INC.


                                      By: ____________________________________
                                      Name: __________________________________
                                      Title: _________________________________









                                       D-1
<PAGE>
                                                                         ANNEX E

                            [FORM OF DELIVERY NOTICE]

                                     [date]

Fletcher International, Ltd.
C/o Fletcher Asset Management, Inc.
22 East 67th Street
New York, NY  10021
Attention:        Peter Zayfert
Telephone:        (212) 284-4800
Facsimile:        (212) 284-4801

Ladies and Gentlemen:

                  Reference is made to the Agreement (the "Agreement") dated as
of March 29, 2002 by and between Champion Enterprises, Inc. ("Champion") and
Fletcher International, Ltd. ("Fletcher"). Capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Agreement.

                  Attached are copies of the front and back of (i) the [ ]
original stock certificates, each representing [ ] shares of Series C Preferred
Stock, and (ii) the Warrant purchased by Fletcher on the date hereof and,
together with a copy of the overnight courier air bill which will be used to
ship such stock certificates and the Warrant. We have the executed original
stock certificates, the Warrant, and the other documents required to be
delivered in connection with the Initial Closing Date. Upon our confirmation of
the payment of the [$ ] aggregate purchase price therefor, we will send the
original stock certificates and the Warrant, each registered under the name
["Bear Stearns Securities Corp., as Custodian for Bear Stearns International
Limited, Pledgee of Fletcher International, Ltd."], by overnight courier to the
following address:

                         [Bear Stearns Securities Corp.
                         1 Metrotech Center North, 8th Floor
                         Brooklyn, NY  11201
                         Attention:     Cashiers, 4th Floor
                                        Brandon Sica, Prime Broker Services
                         Telephone:  347-643-1991
                         F/B/O Fletcher International, Ltd.
                         Account #102-26934]

and we will send the other original documents by overnight courier to the
following address:

                         [Fletcher International, Ltd.
                         c/o A.S.& K. Services Ltd.
                         Cedar House
                         41 Cedar Avenue
                         Hamilton HM EX



                                      E-1
<PAGE>
                         Bermuda
                         Attention:     Felicity Holmes, Corporate Administrator
                         Telephone:     441-295-2244]


with a copy to:

                                        [Fletcher International Limited
                                        c/o Fletcher Asset Management, Inc.
                                        22 East 67th Street
                                        New York, NY  10021-5805
                                        Attention:       Peter Zayfert]

                  Attached hereto as Exhibit 1 is a true, correct and complete
copy of the most recent report of PricewaterhouseCoopers LLP to the Board of
Directors and Shareholders of Champion, together with the accompanying
consolidated financial statements and schedules of Champion, as such report
appears in the most recent Annual Report on Form 10-K filed by Champion with the
SEC, as well as all Quarterly Reports on Form 10-Q filed by Champion with the
SEC since the date of such Form 10-K, together with all amendments thereto.


                                      CHAMPION ENTERPRISES, INC.


                                      By: ____________________________________
                                      Name: __________________________________
                                      Title: _________________________________













                                      E-2



































                                      E-2
<PAGE>
                                                                         ANNEX F

                                [AUDITOR REPORT]



































                                      F-1
<PAGE>
                                                                         ANNEX G

                   [FORM OF PREFERRED STOCK CONVERSION NOTICE]


                                     [date]


Champion Enterprises, Inc.
2701 Cambridge Court
Suite 300
Auburn Hills, Michigan  48326
Attention:
Telephone:
Facsimile:

Ladies and Gentlemen:

                  Reference is made to the Agreement (the "Agreement") dated as
of March 29, 2002 by and between Champion Enterprises, Inc. ("Champion") and
Fletcher International, Ltd. ("Fletcher"). Capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Agreement.

                  Fletcher hereby elects to convert _________ shares of Series C
Preferred Stock into ________ shares of Common Stock at a Conversion Price (as
defined in the Certificate of Rights and Preferences) of ____________. In
accordance with Section 6 of the Certificate of Rights and Preferences, such
shares of Common Stock shall be registered under the name ["Bear Stearns
Securities Corp., as Custodian for Bear Stearns International Limited, Pledgee
of Fletcher International, Ltd."] and delivered to Fletcher in certificated form
at the address specified below:


                          [Bear Stearns Securities Corp.
                          1 Metrotech Center North, 8th Floor
                          Brooklyn, NY  11201
                          Attention:    Cashiers, 4th Floor
                                        Brandon Sica, Prime Broker Services
                          Telephone:  347-643-1991
                          F/B/O Fletcher International, Ltd.
                          Account #102-26934]















                                      G-1

<PAGE>
                                      FLETCHER INTERNATIONAL, LTD., by its
                                      duly authorized investment advisor,
                                      FLETCHER ASSET MANAGEMENT, INC.

                                      By: ____________________________________
                                      Name: __________________________________
                                      Title: _________________________________




                                      By: ____________________________________
                                      Name: __________________________________
                                      Title: _________________________________




AGREED AND ACKNOWLEDGED:
CHAMPION ENTERPRISES, INC.


By: ____________________________________
Name: __________________________________
Title: _________________________________

























                                      G-2
<PAGE>
                                                                         ANNEX H

              [FORM OF PREFERRED STOCK CONVERSION DELIVERY NOTICE]


                                     [date]


Fletcher International, Ltd.
c/o Fletcher Asset Management, Inc.
22 East 67th Street
New York, NY  10021
Attention:        Peter Zayfert
Telephone:        (212) 284-4800
Facsimile:        (212) 284-4801

Ladies and Gentlemen:

                  Reference is made to the Agreement (the "Agreement") dated as
of March 29, 2002 by and between Champion Enterprises, Inc. ("Champion") and
Fletcher International, Ltd. ("Fletcher"). Capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Agreement.

                  This notice confirms that _________ shares of Series C
Preferred Stock have been converted by Fletcher into ________ shares of Common
Stock at a Conversion Price (as defined in the Certificate of Rights and
Preferences) of ____________. Attached are copies of the front and back of the
____ original stock certificates, each representing ______ shares of Common
Stock, together with a copy of the overnight courier air bill which will be used
to ship such stock certificates. We will send the original stock certificates,
registered under the name ["Bear Stearns Securities Corp., as Custodian for Bear
Stearns International Limited, Pledgee of Fletcher International, Ltd."], by
overnight courier to the following address:

                         [Bear Stearns Securities Corp.
                         1 Metrotech Center North, 8th Floor
                         Brooklyn, NY  11201
                         Attention:    Cashiers, 4th Floor
                                       Brandon Sica, Prime Broker Services
                         Telephone:  347-643-1991
                         F/B/O Fletcher International, Ltd.
                         Account #102-26934]

















                                      H-1
<PAGE>
with a copy to:

                                    [Fletcher International, Ltd.
                                    c/o Fletcher Asset Management, Inc.
                                    22 East 67th Street
                                    New York, NY  10021-5805
                                    Attention:       Peter Zayfert]

[If Preferred Stock certificates tendered by Fletcher are not being fully
converted, insert the following - Also attached are copies of the front and back
of the original stock certificate representing ______ shares of Series C
Preferred Stock, representing the unconverted portion of the tendered Series C
Preferred Stock certificates, together with a copy of the overnight courier air
bill which will be used to ship such stock certificate. We will send the
original stock certificate by overnight courier to Lehman Brothers Inc. at the
address set forth in the previous paragraph.]

                                        CHAMPION ENTERPRISES, INC.

                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________












                                      H-2
<PAGE>
                                                                         ANNEX I


                         [FORM OF EXCESS RIGHTS NOTICE]

                                                    _____________, __

Champion Enterprises, Inc.
2701 Cambridge Court
Suite 300
Auburn Hills, Michigan  48326
Attention:

Ladies and Gentlemen:

                  Fletcher International, Ltd. ("Fletcher") hereby elects to
exercise its right to convert/redeem some or all of its Series C Preferred
Shares (as defined in the Agreement (the "Agreement")) dated as of March 29,
2002 by and between Champion Enterprises, Inc. ("Champion") and Fletcher and, in
lieu of receipt of ________ Common Shares upon [conversion][redemption] of
_______ Series C Preferred Shares, hereby requests creation of Excess Rights
with a stated value of $________ in accordance with the terms of the Agreement.
Capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Agreement.


                                        FLETCHER INTERNATIONAL, LTD., by its
                                        duly authorized investment advisor,
                                        FLETCHER ASSET MANAGEMENT, INC.



                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________



                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________










                                      I-1
<PAGE>


AGREED AND ACKNOWLEDGED:
CHAMPION ENTERPRISES, INC.

By: ____________________________________
Name: __________________________________
Title: _________________________________
















































                                      I-2
<PAGE>
                                                                         ANNEX J

                      [FORM OF TWO YEAR CONVERSION NOTICE]

                                     [date]

Fletcher International, Ltd.
c/o Fletcher Asset Management, Inc.
22 East 67th Street
New York, NY  10021
Attention:        Peter Zayfert
Telephone:        (212) 284-4800
Facsimile:        (212) 284-4801

Ladies and Gentlemen:

                  Reference is made to the Agreement (the "Agreement") dated as
of March 29, 2002 by and between Champion Enterprises, Inc. ("Champion") and
Fletcher International, Ltd. ("Fletcher") and the Certificate of Rights and
Preferences of the Series C Cumulative Convertible Preferred Stock (the
"Certificate"). Capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Agreement and the Certificate.

                  In compliance with Section 6(A)(i) of the Certificate,
Champion hereby elects to convert ______ shares of Series C Cumulative Preferred
Stock, which represents, all but not less than all of the shares of Series C
Cumulative Preferred Stock. In compliance with Section 6(A)(i) of the
Certificate, Champion hereby represents that the Company has sufficient
Registered Common Stock to deliver to the Holder or Holders upon the closing of
such conversion.


                                        CHAMPION ENTERPRISES, INC.


                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________






















                                      J-1
<PAGE>
                                                                         ANNEX K

                [FORM OF BUSINESS COMBINATION RESTRICTION NOTICE]

                                     [date]

Fletcher International, Ltd.
c/o Fletcher Asset Management, Inc.
22 East 67th Street
New York, NY  10021
Attention:        Peter Zayfert
Telephone:        (212) 284-4800
Facsimile:        (212) 284-4801

Ladies and Gentlemen:

                  Reference is made to the Agreement (the "Agreement") dated as
of March 29, 2002 by and between Champion Enterprises, Inc. ("Champion") and
Fletcher International, Ltd. ("Fletcher") and the Certificate of Rights and
Preferences of the Series C Cumulative Convertible Preferred Stock (the
"Certificate"). Capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Agreement and the Certificate.

                  Champion hereby represents that public disclosure has been
made of a Business Combination. [It hereby elects, pursuant to Section 6(F) of
the Certificate of Rights and Preferences to redeem all outstanding Series C
Preferred Shares for cash in the amount of $_____________. It hereby further
elects, pursuant to Section 11 of the Agreement to redeem all outstanding
Fletcher Rights for cash in the amount of $_______________.]


                                        CHAMPION ENTERPRISES, INC.


                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________









                                      K-1
<PAGE>
                                                                         ANNEX L


                                [FORM OF WARRANT]











































                                      L-1
<PAGE>
                                                                         ANNEX M

                          [FORM OF AMENDED AND RESTATED
                    CERTIFICATE OF RIGHTS AND PREFERENCES OF
              SERIES B-1 CUMULATIVE CONVERTIBLE PREFERRED STOCK OF
                           CHAMPION ENTERPRISES, INC.]









































                                      L-2
<PAGE>
                                                                         ANNEX N

                [FORM OF CERTIFICATE OF RIGHTS AND PREFERENCES OF
          SERIES B-2, B-3, ETC. CUMULATIVE CONVERTIBLE PREFERRED STOCK
                         OF CHAMPION ENTERPRISES, INC.]
<PAGE>
                                TABLE OF CONTENTS

                                                                          PAGE

1.    PURCHASE AND SALE......................................................1

2.    INITIAL CLOSING........................................................3

3.    SUBSEQUENT CLOSING.....................................................4

4.    REPRESENTATIONS AND WARRANTIES OF CHAMPION.............................4

5.    REGISTRATION PROVISIONS................................................9

6.    "MARKET STAND-OFF" AGREEMENT..........................................12

7.    CONVERSION AND REDEMPTION OF PREFERRED SHARES.........................13

8.    REPRESENTATIONS AND WARRANTIES OF FLETCHER............................15

9.    RIGHT OF FIRST OFFER..................................................16

10.      COVENANTS OF CHAMPION..............................................18

11.      CONSOLIDATION, MERGER, ETC.........................................19

12.      COVENANTS OF FLETCHER..............................................20

13.      LEGEND.............................................................21

14.      CONDITIONS PRECEDENT TO FLETCHER'S OBLIGATIONS.....................21

15.      CONDITIONS PRECEDENT TO CHAMPION'S OBLIGATIONS.....................22

16.      FEES AND EXPENSES..................................................22

17.      NON-PERFORMANCE....................................................22

18.      INDEMNIFICATION....................................................23

19.      SURVIVAL OF THE REPRESENTATIONS, WARRANTIES, ETC...................25

20.      NOTICES............................................................25

21.      MISCELLANEOUS......................................................26

ANNEXES

FORM OF CERTIFICATE OF RIGHTS AND
     PREFERENCES OF SERIES C CUMULATIVE CONVERTIBLE
     PREFERRED STOCK OF CHAMPION ENTERPRISES, INC..........................A-1
FORM OF FLETCHER NOTICE......................................................C
FORM OF REDEMPTION NOTICE ...................................................C
FORM OF CHAMPION NOTICE....................................................D-1
FORM OF DELIVERY NOTICE...............................................E-1, E-2
AUDITOR REPORT.............................................................F-1
FORM OF PREFERRED STOCK CONVERSION NOTICE.............................G-1, G-2






                                      -i-
<PAGE>
FORM OF PREFERRED STOCK CONVERSION DELIVERY NOTICE....................H-1, H-2
FORM OF EXCESS RIGHTS NOTICE...............................................I-1
FORM OF TWO YEAR CONVERSION NOTICE.........................................J-1
FORM OF BUSINESS COMBINATION RESTRICTION NOTICE............................K-1
FORM OF WARRANT............................................................L-1
FORM OF AMENDED AND RESTATED CERTIFICATE OF
     RIGHTS AND PREFERENCES OF SERIES B-1 CUMULATIVE CONVERTIBLE
     PREFERRED STOCK OF CHAMPION ENTERPRISES, INC..........................M-1
FORM OF CERTIFICATE OF RIGHTS AND PREFERENCES OF
     SERIES B-2, B-3, ETC. CUMULATIVE CONVERTIBLE PREFERRED STOCK
     OF CHAMPION ENTERPRISES, INC..........................................N-1














































                                      -ii-
<PAGE>
                             INDEX OF DEFINED TERMS

                                                                           PAGE




65 Day Notice................................................................14
Additional Issuance Price.....................................................4
Additional Preferred Shares...................................................1
Agreement.....................................................................1
Auditor Report................................................................9
Average Price................................................................14
Business Day..................................................................3
Certificate of Rights and Preferences.........................................1
Champion......................................................................1
Champion Indemnified Party...................................................24
Closing Date..................................................................2
Common Shares.................................................................3
Common Stock..................................................................1
Excess Rights................................................................14
Excess Rights Notice.........................................................14
Exchange Act..................................................................3
Exercisable Number...........................................................14
First Offer Shareholders.....................................................16
Fletcher......................................................................1
Fletcher Indemnified Party...................................................23
Fletcher Notice...............................................................2
Fletcher Notice Date.........................................................13
Fletcher Rights...............................................................1
Fletcher Rights Period........................................................2
Increase Notice..............................................................19
Indemnified Party............................................................24
Indemnifying Party...........................................................24
Initial Closing...............................................................1
Initial Closing Date..........................................................1
Initial Preferred Shares......................................................1
Investment Securities.........................................................3
Issuance Blockage............................................................13
Maximum Number...............................................................14
NASD..........................................................................3
Notice Period................................................................14
NYSE..........................................................................3
Offer Notice.................................................................16
Offered Shares...............................................................16
Original Number..............................................................13
Preferred Stock...............................................................7





                                      -1-
<PAGE>

Preferred Stock Conversion Delivery Notice...................................13
Preferred Stock Conversion Notice............................................13
Proceeding...................................................................23
Redemption Common Stock.......................................................2
Redemption Notice.............................................................2
Redemption Rights.............................................................2
Related Proceeding...........................................................27
Required Consent.............................................................13
Rights Commencement Date......................................................2
SEC...........................................................................7
Sec Filing....................................................................7
Securities Act................................................................7
Series C Preferred Shares.....................................................1
Series C Preferred Stock......................................................1
Subsequent Closing............................................................2
Subsequent Closing Date.......................................................2
Warrant.......................................................................1
Warrant Exercise Delivery Notice..............................................2
Warrant Exercise Notice.......................................................2







                                       -2-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>7
<FILENAME>k68735ex99.txt
<DESCRIPTION>PRESS RELEASE APRIL 3, 2002
<TEXT>
<PAGE>
                                                                      EXHIBIT 99




FOR IMMEDIATE RELEASE


INVESTOR AND MEDIA CONTACTS:

Anthony S. Cleberg                  Colleen T. Bauman
Chief Financial Officer             Investor Relations
(248) 340-9090                      (248) 340-7731


                           CHAMPION ENTERPRISES, INC.
                         ANNOUNCES AGREEMENT TO ACQUIRE
                            CIT MANUFACTURED HOUSING
                            LOAN ORIGINATION BUSINESS

               PRIVATE PLACEMENT OF PREFERRED STOCK ALSO ANNOUNCED

                          CONFERENCE CALL SCHEDULED FOR
               11:00 A.M. EASTERN TIME ON THURSDAY, APRIL 4, 2002
                          CALL-IN NUMBER (973) 321-1020
                          REPLAY NUMBER (973) 341-3080

         AUBURN HILLS, MICH., APRIL 3, 2002--CHAMPION ENTERPRISES, INC. (NYSE:
CHB), the nation's leading housing manufacturer, today announced that it has
entered into an agreement to acquire CIT Group Inc.'s manufactured housing loan
origination business for approximately $5 million. The transaction is expected
to close in mid-April. Champion also announced that it has completed the private
placement of $25 million of convertible preferred stock with Fletcher
International, Ltd. In addition, the company stated that it expects to be a
party to a $150 million warehouse facility to support the finance company's
future operations.

         CIT, with over 50 years in the manufactured housing lending and
servicing business, has some of the most technologically advanced systems in the
industry and receives almost all of its loan applications from retailers via the
Internet. The senior management team that will now be employed by Champion
averages 20 years of lending experience. In 2001, CIT originated $685 million in
manufactured housing loans while maintaining the industry's highest credit
quality among the national lenders.


                                     (more)
<PAGE>
CHB/ 2

         Champion Chairman, President, and Chief Executive Officer, Walter R.
Young, commented, "We're excited about these transactions, which are important
to our short and long-term strategic objectives. By acquiring CIT's manufactured
housing lending operations, we benefit by quickly and effectively entering the
chattel, or home-only, finance business with the experience, systems and
processes of a strong origination platform without buying an existing portfolio.
We will be using the name of HomePride Finance Corp. to move forward quickly by
taking advantage of existing state licenses and registrations. HomePride will
provide chattel financing for customers at our company-owned stores and select
independent retailers, which will mitigate the effects of the recent contraction
in industry chattel financing.

         "We still see the shift to real estate mortgages as positive for the
industry, but estimate that chattel financing will remain at least 30% of
manufactured housing financing, particularly for homes going into land-lease
communities. New home chattel loans currently being written are very profitable
and Champion plans to share in the attractive spreads now being realized without
exposure to potential losses on previous loans. In addition, our strategy
includes strongly aligning company-owned retail stores' operations with the
performance of loans originated. We believe this strategy, which has been proven
in the industry, is fundamental to attaining performing loans," Young continued.

         For the first quarter ending March 30, 2002, the company stated that it
continues to anticipate that consolidated net sales will be in the range of $305
million to $315 million and expects a loss in the range of $0.23 to $0.27 per
diluted share. For the first quarter of 2002, EBITDA is estimated to be in the
range of negative $5.8 million to negative $9.0 million, which will compare to
negative $15.8 million in the first quarter of 2001. For the twelve month period
ending March 30, 2002, net sales are projected to be in the range of $1,527
million to $1,537 million and EBITDA in the range of $42.1 million to $45.3
million. EBITDA for the year ended December 29, 2001 was $35.3 million. EBITDA
consists of net income or loss before interest, income taxes, depreciation,
amortization and non-recurring items.

         The convertible preferred stock has a seven-year term, a 5% annual
dividend and an initial conversion price of $9.63 per share for common stock
during the first 15 months. Fifteen months after issuance the conversion price
will be adjusted to 115% of the common stock's market value, subject to certain
limitations, and the preferred stock is redeemable by Fletcher 24 months after
the date of the agreement. Fletcher can purchase an additional $10 million of
preferred stock on the same terms by June 24, 2002. In connection with this
transaction, Fletcher received warrant rights for approximately 1.1 million
shares of common stock at $12.04 per share, subject to certain adjustments. The
warrant may only be exercised on a net basis, which minimizes dilution. Fletcher
also agreed to convert or redeem the $20 million of preferred stock issued in
July 2001 no later than March 29, 2004 and Champion allowed the redemption
period to begin at the date of closing. At today's conversion and redemption
prices, these transactions would result in potential additional share dilution
of approximately 8.8%.


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CHB/ 3

         "We are excited that these capital structure transactions enhance our
liquidity and allow us to enter a new platform for growth that complements our
existing operations. We are particularly pleased that Fletcher, one of our
largest investors, so quickly and strongly supported our entry into this
business. This year our finance company, which will account for its structured
securitizations using the portfolio method, is expected to report a loss. As a
result, Champion expects to be at break even for 2002 including the cost of the
additional debt. In future years we expect our finance company to be profitable
and our manufacturing and retail operations to realize the benefits of having
our own finance platform," Young concluded.


About Champion

         Champion Enterprises, Inc., headquartered in Auburn Hills, Michigan, is
the industry's leading manufacturer and has produced nearly 1.6 million homes
since the company was founded. The company operates 47 homebuilding facilities
and 214 retail locations. Champion's homes are also sold by more than 1,000
independent retail locations that have joined either the Champion Home Center or
the Alliance of Champions retail distribution networks. Approximately 400
builders and developers also sell Champion built homes. The conference call and
replay will be available via the company's website, www.championhomes.net.
Please also view this website for additional information about Champion.

About CIT

         The CIT family of companies are subsidiaries of Tyco International Ltd.
(NYSE: TYC, LSE: TYI, BSX: TYC). CIT is a leading, global source of financing
and leasing capital and an advisor for companies in more than 30 industries.
Managing $50 billion in assets across a diversified portfolio, CIT is the
trusted financial engine empowering many of today's industry leaders and
emerging businesses, offering vendor, equipment, commercial, factoring, consumer
and structured financing capabilities. Founded in 1908, CIT operates extensively
in the United States and Canada with strategic locations in Europe, Latin and
South America, and the Pacific Rim.

About Fletcher

         Fletcher International, Ltd. and other affiliates of New York
investment firm Fletcher Asset Management, Inc. make direct investments in a
wide range of established and growing public companies in a variety of
industries. More information about Fletcher International, Ltd. and Fletcher
Asset Management, Inc. may be found on their website, www.fletcher.com.



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CHB/4

         This news release contains certain statements, including projected
closing dates of the CIT and warehouse line transactions, statements of
strategic objectives, our speed and impact of entry into the consumer finance
business, the percentage of chattel finance of manufactured housing finance,
profitability of consumer finance, our plans to align the interests of our
lending and retail activities with the goal of attaining performing loans, our
estimates of sales, profit, loss, and EBITDA and our estimates of dilution from
these transactions, that could be construed to be forward looking statements
within the meaning of the Securities and Exchange Act of 1934. These statements
reflect the company's views with respect to future plans, events and financial
performance. The company does not undertake any obligation to update the
information contained herein, which speaks only as of the date of this press
release. The company has identified certain risk factors which could cause
actual results and plans to differ substantially from those included in the
forward looking statements. These factors are discussed in the company's most
recently filed Form 10-K and other SEC filings, and those discussions regarding
risk factors are incorporated herein by reference.



                                      *****


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