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                                                                    EXHIBIT 10.1


                       AMENDMENT NO. 2 TO CREDIT AGREEMENT


            THIS AMENDMENT NO. 2 TO CREDIT AGREEMENT (the "Amendment No. 2")
dated as of March 31, 1999 by and among CHAMPION ENTERPRISES, INC., a Michigan
corporation (the "Borrower"), the Guarantors set forth herein, the Banks set
forth herein, NBD BANK, as Syndication Agent, COMERICA BANK, as Documentation
Agent and NATIONAL CITY BANK, HARRIS TRUST AND SAVINGS BANK, KEYBANK NATIONAL
ASSOCIATION, NATIONSBANK, N.A. and WACHOVIA BANK, N.A., as Co-Agents, and PNC
BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent for the
Banks (the "Agent").

                              W I T N E S S E T H:

            WHEREAS, the Borrower, the Guarantors, the Banks, the Syndication
Agent, the Documentation Agent, the Co-Agents and the Agent are parties to that
certain Credit Agreement dated as of May 5, 1998, as amended by Amendment No. 1
dated as of December 18, 1998 (the "Credit Agreement"); and

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

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

      1.    Definitions.

      Defined terms used herein unless otherwise defined herein shall have the
meanings ascribed to them in the Credit Agreement as amended by this Amendment
No. 2.

      2.    Amendment of Credit Agreement.

            A. Section 1.1 [Definitions] of the Credit Agreement is hereby
amended by deleting the definitions of "Consolidated Debt," "Earn Out
Obligations," "Retail Finance Companies," "Significant Subsidiary," "Swing Loan
Commitment," "Swing Loan Note" and "Swing Loans" in their entirety and inserting
in lieu thereof the following:

            Consolidated Debt shall mean, as of any date of determination, the
      Indebtedness of the Borrower and its Subsidiaries (other than Champion
      Development) minus Earn Out Obligations and Repurchase Obligations,
      determined and consolidated in accordance with GAAP.

            Earn Out Obligations shall mean, as of any date of determination,
      the contingent portion of acquisition-related liabilities which are not
      paid by the Borrower or its Subsidiaries at the time of the closing of the
      acquisitions, as set forth in the purchase agreements entered into at the
      time of the closing of such acquisitions.
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            Retail Finance Companies shall mean collectively, and Retail Finance
      Company shall mean separately, a Person, other than an individual,
      primarily engaged in the business of making loans, in each case subject to
      industry underwriting standards, to retail purchasers of manufactured
      housing products, provided no such loans shall be held by such Retail
      Finance Company in excess of one hundred eighty (180) days.

            Significant Subsidiary shall mean any Subsidiary of the Borrower
      (other than Champion Development) which at the time (i) has gross revenues
      equal to or in excess of ten percent (10%) of the consolidated gross
      revenues of the Borrower and its Subsidiaries, (ii) has total assets equal
      to or in excess of five percent (5%) of the consolidated total assets of
      the Borrower and its Subsidiaries, as determined and consolidated in
      accordance with GAAP, (iii) has any material trademarks or other
      intellectual property related to the business of the Borrower and its
      Subsidiaries, or (iv) has commitments to lend or Guaranties from the
      Borrower or any other Significant Subsidiary equal to or in excess of five
      percent (5%) of the consolidated total assets of the Borrower and its
      Subsidiaries, as determined and consolidated in accordance with GAAP.

            Swing Loan Commitment shall mean, as to any Swing Loan Bank at any
      time, the amount initially set forth opposite its name on Schedule 1.1(B)
      in the column labeled "Swing Loan Commitment," and thereafter on Schedule
      1 to the most recent Assignment and Assumption Agreement, and Swing Loan
      Commitments shall mean the aggregate Swing Loan Commitments of all of the
      Swing Loan Banks.

            Swing Loan Note shall mean any Swing Loan Note of the Borrower in
      the form of Exhibit 1.1(S) issued by the Borrower at the request of a
      Swing Loan Bank evidencing the Swing Loans to such Swing Loan Bank,
      together with all amendments, extensions, renewals, replacements,
      refinancings or refundings thereof in whole or in part.

            Swing Loans shall mean collectively and Swing Loan shall mean
      separately all Swing Loans or any Swing Loan made by the Swing Loan Banks
      or one of the Swing Loan Banks to the Borrower pursuant to Section 2.1.2
      hereof.

            B. Section 1.1 [Definitions] of the Credit Agreement is hereby
amended by inserting the following definitions of "Champion Development,"
"Permitted Unsecured Debt," "Swing Loan Bank," "Swing Loan Bid," "Swing Loan
Interest Period," "Swing Loan Interest Rate," "Swing Loan Offered Amount" and
"Swing Loan Requested Amount" in alphabetical order:

            Champion Development shall mean Champion Development Corporation, a
      Michigan corporation, which at all times since its formation:

                  (i) identified itself, and will continue to identify itself,
      in all dealings with the public, under its own 


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      name and as a separate and distinct entity; has not and will not identify
      itself as being a division or a part of any other entity; has not and will
      not fail to correct any known misunderstanding regarding the separate
      identity of such entity; and has conducted and will conduct its business
      in its own name (and not in the name of any other Person, including any
      Loan Party);

                  (ii) has maintained and will maintain its accounts, books and
      records separate from any other Person (including any Loan Party); has
      allocated and will allocate fairly and reasonably any overhead for shared
      office space; and has used and will use separate stationery, invoices and
      checks;

                  (iii) will not commingle its funds or assets with those of any
      other Person (including any Loan Party);

                  (iv) will hold its assets in its own name (and not in the name
      of any Loan Party);

                  (v) has maintained and will maintain its financial statements,
      accounting records and other entity documents separate from any other
      Person (including any Loan Party);

                  (vi) has ensured and will continue to ensure that any payment
      of its liabilities will be out of its own funds and assets;

                  (vii) has observed and will observe all corporate formalities;
      and

                  (viii) has maintained and currently intends to continue to
      maintain adequate capital in light of its contemplated business
      operations.

            Permitted Unsecured Debt shall mean Indebtedness incurred by the
      Borrower or any of its Subsidiaries provided that each of the following
      requirements is met:

                  (i) The Borrower shall permanently reduce the Revolving Credit
      Commitments in a minimum amount equal to the amount of such Indebtedness
      in excess of $200,000,000;

                  (ii) The amount of such Indebtedness shall not exceed
      $225,000,000;

                  (iii) Neither the Borrower, nor any of the Borrower's
      Subsidiaries shall grant, or agree to grant, whether conditionally or
      unconditionally, any Liens in its assets securing such Indebtedness;

                  (iv) The warranties and covenants governing such Indebtedness
      shall not be less favorable to the Borrower and its Subsidiaries than the
      warranties and covenants hereunder as determined by the Required Banks in
      their reasonable discretion;


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                  (v) (A) The Borrower shall deliver to the Agent for the
      benefit of the Banks drafts of the agreements governing such Indebtedness
      at least seven (7) days prior to the effective date of such agreements;
      and (B) the warranties and covenants shall not be modified after the Banks
      have made the determination described in clause (iv) above without the
      approval of the Required Banks;

                  (vi) No principal payments on such Indebtedness shall be due
      or may be paid until after the Expiration Date hereunder; and

                  (vii) No Subsidiary shall provide a Guaranty with respect to
      such Indebtedness unless it has previously become a Guarantor.

            Swing Loan Bank hall mean any of the following Banks, any of which
      may from time to time make a Swing Loan to the Borrower in accordance with
      Section 2.1.2, and Swing Loan Banks shall mean collectively each and every
      Swing Loan Bank: PNC Bank, National Association and NBD Bank.

            Swing Loan Bid shall have the meaning assigned to such term in
      Section 2.5.2.2.

            Swing Loan Interest Period shall have the meaning assigned to such
      term in Section 2.5.2.1.

            Swing Loan Interest Rate shall have the meaning assigned to such
      term in Section 2.5.2.2.

            Swing Loan Offered Amount shall have the meaning assigned to that
      term in Section 2.5.2.2.

            Swing Loan Requested Amount shall have the meaning assigned to that
      term in Section 2.5.2.1.

            C. Section 2.1.2 [Swing Loan Commitment] of the Credit Agreement is
hereby amended by deleting the first sentence thereof in its entirety and
inserting in lieu thereof the following:

            2.1.2 Swing Loan Commitment.

            Subject to the terms and conditions hereof and relying upon the
      representations and warranties herein set forth, and in order to
      facilitate loans and repayments between Settlement Dates, the Swing Loan
      Banks agree to make Swing Loans to the Borrower, at any time or from time
      to time after the date hereof to, but not including, the Expiration Date,
      in an aggregate principal amount up to but not in excess of the Swing Loan
      Commitment of such Swing Loan Bank, provided that the aggregate principal
      amount of all Swing Loans outstanding and the Revolving Credit Loans
      outstanding, at any time, shall not exceed the Revolving Credit
      Commitments of all the Banks.


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            D. Section 2.5.2 [Swing Loan Requests] of the Credit Agreement is
hereby deleted in its entirety and the following is inserted in lieu thereof:

            2.5.2 Swing Loan Requests and Bidding.

                  2.5.2.1 Swing Loan Requests. Except as otherwise provided
      herein, the Borrower may from time to time prior to the Expiration Date
      request any one or more Swing Loan Banks, as the Borrower in its sole
      discretion may select, to make a Swing Loan by delivery to the Agent and
      each Swing Loan Bank selected by the Borrower not later than 10:00 a.m.,
      Pittsburgh time, on the proposed Borrowing Date of a duly completed
      request therefor substantially in the form of Exhibit 2.5.2 hereto or a
      request by telephone immediately confirmed in writing by letter, facsimile
      or telex (each, a "Swing Loan Request"), it being understood that the
      Agent and each Swing Loan Bank may rely on the authority of any individual
      making such a telephonic request without the necessity of receipt of such
      written confirmation. Each Swing Loan Request shall be irrevocable and
      shall specify (i) the proposed Borrowing Date, (ii) the term of the
      proposed Swing Loan, which shall be no less than one (1) day and no longer
      than seven (7) days (the "Swing Loan Interest Period") and (iii) the
      principal amount of such Swing Loan, which shall be not less than
      $1,000,000 (the "Swing Loan Requested Amount"). After giving effect to
      each Swing Loan and any other Loan made on or before the Swing Loan
      Borrowing Date for such Swing Loan, (i) the aggregate amount of the Swing
      Loans of all Swing Loan Banks outstanding shall not exceed $20,000,000,
      and (ii) the aggregate amount of the Swing Loans of any one Swing Loan
      Bank outstanding shall not exceed the Swing Loan Commitment of such Swing
      Loan Bank.

                  2.5.2.2 Swing Loan Bidding. Promptly after receipt by each
      Swing Loan Bank of a Swing Loan Request pursuant to Section 2.5.2.1, each
      Swing Loan Bank may submit a bid (a "Swing Loan Bid") to the Agent and the
      Borrower no later than 11:00 a.m., Pittsburgh time (subject to the last
      sentence of this Section), on the Borrowing Date by telephone (immediately
      confirmed in writing by letter, facsimile or telex). Each Swing Loan Bid
      shall specify: (A) the principal amount of proposed Swing Loans offered by
      such Swing Loan Bank (the "Swing Loan Offered Amount") which (i) may be
      less than, but shall not exceed, the Swing Loan Requested Amount, (ii)
      shall be at least $1,000,000 and (iii) may not exceed such Swing Loan
      Bank's Swing Loan Commitment, and (B) the rate of interest (the "Swing
      Loan Interest Rate") which shall apply to such proposed Swing Loan and the
      applicable Swing Loan Interest Period, provided in no event shall the
      Swing Loan Interest Rate be greater than the Base Rate and provided
      further if a Swing Loan Bank does not submit a Swing Loan Bid, it shall be
      deemed to have submitted a bid for a Swing Loan in the amount of the
      lesser of (i) the Swing Loan Requested Amount or (ii) such portion of the
      Swing Loan Requested Amount that will not cause such Swing Loan Bank's
      Swing Loan Commitment to be exceeded, with a Swing Loan Interest Rate
      equal to the Base Rate; provided, further, if the Borrower does not wish
      to go 


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      through the bidding process for a Swing Loan, it can request PNC Bank,
      National Association to make such a Swing Loan at the Base Rate. If any
      Swing Loan Bid omits information required hereunder, the Agent may in its
      sole discretion attempt to notify the Swing Loan Bank submitting such
      Swing Loan Bid. If the Agent so notifies a Swing Loan Bank, such Swing
      Loan Bank may resubmit its Swing Loan Bid, provided that it does so prior
      to time set forth in this Section 2.5.2.2 above by which such Swing Loan
      Bank is required to submit its Swing Loan Bid to the Agent. The Agent
      shall promptly notify the Borrower of the Swing Loan Bids which it timely
      received from the Swing Loan Banks. If the Agent in its capacity as a
      Swing Loan Bank shall, in its sole discretion, make a Swing Loan Bid, it
      shall notify the Borrower of such Swing Loan Bid before the later of 10:30
      a.m., Pittsburgh time, on the proposed Swing Loan Borrowing Date or the
      time that any other Swing Loan Bank submits its Swing Loan Bid to the
      Agent, but in no event after 11:00 a.m. on the proposed Swing Loan
      Borrowing Date.

                  2.5.2.3 Accepting Swing Loan Bids. The Borrower shall
      irrevocably accept or reject Swing Loan Bids by notifying the Agent of
      such acceptance or rejection by telephone (immediately confirmed in
      writing by letter, facsimile or telex) not later than 1:00 p.m.,
      Pittsburgh time, on the proposed Swing Loan Borrowing Date. If the
      Borrower elects to accept any Swing Loan Bids, its acceptance must meet
      the following conditions: (1) the total amount which Borrower accepts from
      all Swing Loan Banks must exceed $1,000,000 and may not exceed the Swing
      Loan Requested Amount; (2) the Borrower must accept Swing Loan Bids based
      solely on the amount of the Swing Loan Interest Rate which each of the
      Swing Loan Banks quoted in their Swing Loan Bids in ascending order of the
      amount of the Swing Loan Interest Rate; (3) the Borrower may not borrow
      Swing Loans from any Swing Loan Bank on the Borrowing Date in an amount
      exceeding such Swing Loan Bank's Swing Loan Offered Amount; and (4) if two
      or more Swing Loan Banks make Swing Loan Bids at the same Swing Loan
      Interest Rate and the Borrower desires to accept a portion but not all of
      the aggregate amount of all such Swing Loan Bids made at such Swing Loan
      Interest Rate (such portion of the aggregate amount of all such Swing Loan
      Bids being referred to in this Section as the "Desired Same-Rate Amount"),
      the Borrower shall accept a portion of each such Swing Loan Bid of any
      Swing Loan Bank equal to the product of the Desired Same-Rate Amount times
      the fraction obtained by dividing the amount of the Swing Loan Bid of such
      Bank at such Swing Loan Interest Rate, by the sum of the Swing Loan
      Offered Amounts of the Swing Loan Bids at such Swing Loan Interest Rate of
      all such Swing Loan Banks, provided that the Borrower shall round the
      Swing Loans allocated to each such Swing Loan Bank upward or downward as
      the Borrower may select to integral multiples of $500,000. The Agent shall
      (i) no later than 2:00 p.m., Pittsburgh time, notify a Swing Loan Bank
      that has made a Swing Loan Bid of the amount of its Swing Loan Bid that
      was accepted or rejected by the Borrower and (ii) as promptly as
      practical, notify all of the Swing Loan Banks of all Swing Loan Bids
      submitted and those which have been accepted.


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            E. Section 2.6.1 [Making Swing Loans] of the Credit Agreement is
hereby deleted in its entirety and the following is inserted in lieu thereof:

            2.6.1 Making Swing Loans.

            Each Swing Loan Bank whose Swing Loan Bid or portion thereof is
      accepted shall remit the principal amount of its Swing Loan to the Agent
      by 3:00 p.m., Pittsburgh time, on the Borrowing Date. The Agent shall make
      such funds available to the Borrower on or before 3:30 p.m., Pittsburgh
      time, on the Borrowing Date provided that the conditions precedent to the
      making of such Swing Loan set forth in Section 6.2 [Each Additional Loan
      or Letter of Credit] have been satisfied not later than 3:30 p.m.,
      Pittsburgh time, on the proposed Borrowing Date. If such conditions
      precedent have not been satisfied prior to such time, then (i) the Agent
      shall not make such funds available to the Borrower, (ii) the Swing Loan
      Request shall be deemed to be canceled and (iii) the Agent shall return
      the amount previously funded to the Agent by each applicable Swing Loan
      Bank no later than the next following Business Day. The Borrower shall
      immediately notify the Agent of any failure to satisfy the conditions
      precedent to the making of Swing Loans under Section 6.2. The Agent may
      assume that Borrower has satisfied such conditions precedent so long as
      (i) the Borrower has not notified the Agent that the Loan Parties have not
      satisfied any other conditions precedent, and (ii) the Agent has no actual
      notice of such a failure. The obligations of the Swing Loan Banks to make
      Swing Loans after their Swing Loan Bids have been accepted are several. No
      Swing Loan Bank shall be responsible for the failure of any other Swing
      Loan Bank to make any Swing Loan which another Swing Loan Bank has agreed
      to make. Notwithstanding any provision herein to the contrary, in no event
      shall there be more than four (4) Swing Loans outstanding at any one time.

            F. Section 2.8 [Borrowings to Repay Swing Loans] of the Credit
Agreement shall be deleted in its entirety and the following shall be inserted
in lieu thereof:

            2.8 Borrowings to Repay Swing Loans.

            Any Swing Loan Bank may, at its option, exercisable at any time for
      any reason whatsoever, demand repayment of the Swing Loans, and each Bank
      shall make a Revolving Credit Loan in an amount equal to such Bank's
      Ratable Share of the aggregate principal amount of the outstanding Swing
      Loans, plus, if such Swing Loan Bank so requests, accrued interest
      thereon, provided that no Bank shall be obligated in any event to make
      Revolving Credit Loans in excess of its Revolving Credit Commitment.
      Revolving Credit Loans made pursuant to the preceding sentence shall bear
      interest at the Base Rate Option and shall be deemed to have been properly
      requested in accordance with Section 2.5.1 without regard to any of the
      requirements of that provision. The Swing Loan Bank so requesting
      repayment shall provide notice to the Agent and all the Banks (which may
      be telephonic or written 


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      notice by letter, facsimile or telex) that such Revolving Credit Loans are
      to be made under this Section 2.8. The Agent shall promptly provide to
      each Bank notice of the apportionment among the Banks, and the Banks shall
      be unconditionally obligated to fund such Revolving Credit Loans (whether
      or not the conditions specified in Section 2.5.1 are then satisfied) by
      the time the Swing Loan Bank so requests, which shall not be earlier than
      3:00 p.m., Pittsburgh time, on the Business Day next after the date the
      Banks receive notice of such apportionment from the Agent.

            G. Section 2.9.1 [Issuance of Letters of Credit] of the Credit
agreement is hereby amended by deleting the third sentence of such Section and
inserting in lieu thereof the following:

                  Subject to the terms and conditions hereof and in reliance on
      the agreements of the other Banks set forth in this Section 2.9, the
      Issuing Bank will issue a Letter of Credit provided that each Letter of
      Credit shall (A) have a maximum maturity of eighteen (18) months from the
      date of issuance and (B) in no event expire later than ten (10) Business
      Days prior to the Expiration Date and providing that in no event shall (i)
      the Letters of Credit Outstanding exceed, at any one time, $75,000,000 or
      (ii) the Revolving Facility Usage exceed, at any one time, the Revolving
      Credit Commitments.

            H. Section 3.1 [Interest Rate Options] of the Credit Agreement is
hereby amended by deleting the second proviso of the first sentence thereof and
inserting in lieu thereof the following:

            3.1 Interest Rate Options.

            , and provided further that, notwithstanding the foregoing, the
      Borrower shall pay interest in respect of the outstanding unpaid principal
      amount of each Swing Loan at the rate specified in the related Swing Loan
      Bid accepted by the Borrower with respect to which a Swing Loan is made
      (or at the Base Rate if a Swing Loan is made by PNC Bank, National
      Association and not subject to the bid process).

            I. Section 4.3 [Interest Payment Dates] of the Credit Agreement is
hereby amended by inserting the following immediately after the second sentence
thereof:

            Interest on Swing Loans shall be due and payable on the date a Swing
      Loan becomes due and payable (whether on the stated maturity date, upon
      demand, upon acceleration or otherwise).

            J. Section 4.7 [Settlement Date Procedures] of the Credit Agreement
is hereby amended by deleting "PNC Bank" in the first sentence thereof and
inserting in lieu thereof "any Swing Loan Bank."

            K. Section 4.7 [Settlement Date Procedures] of the Credit Agreement
is hereby amended by deleting the last sentence of such sentence in its entirety
and inserting in lieu thereof the following:


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            The Agent (or any Swing Loan Bank, with respect to its outstanding
      Swing Loans, upon notice to the Agent and each Bank) may at any time at
      its option for any reason whatsoever require each Bank to pay immediately
      to the Agent such bank's Ratable Share of the outstanding Revolving Credit
      Loans, and each Bank may at any time require the Agent to pay immediately
      to such Bank its Ratable Share of all payments made by the Borrower to the
      Agent with respect to the Revolving Credit Loans.

            L. Section 7.1.2 [Payment of Liabilities, Including Taxes, Etc.] is
hereby revised by inserting the following proviso immediately before the end of
such section:

            provided, further, that the failure of Champion Development to
      comply with this Section 7.1.2 shall not result in a default hereunder
      unless such failure could reasonably be expected to result in a Material
      Adverse Change.

            M. The Credit Agreement is hereby amended by inserting a new Section
7.1.12 Champion Development as follows:

            7.1.12 Champion Development.

            Notwithstanding any other provision of this Agreement, Champion
      Development shall not be considered a "Subsidiary" of the Borrower or any
      Loan Party for the purpose of Sections 7.2.1 - 7.2.8, 8.1.5, 8.1.8 and
      8.1.9. Further, the Borrower agrees to cause Champion Development to, at
      all times, comply with all the requirements set forth in the definition of
      Champion Development in Section 1.1 hereof.

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

                  (v) Unsecured Indebtedness of a Loan Party or a Subsidiary of
      a Loan Party comprising Earn Out Obligations not in excess of $375,000,000
      in the aggregate at any one time outstanding;

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

            (ix) Indebtedness (other than as set forth above or below in this
      Section 7.2.1) of the Borrower and its Subsidiaries in an amount not to
      exceed twelve and one-half percent (12-1/2%) of Consolidated Net Worth in
      the aggregate at any one time outstanding; and

            P. Section 7.2.1 [Indebtedness] of the Credit Agreement is hereby
amended by inserting the following clauses (x) and (xi) immediately following
clause (ix):


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            (x) Permitted Unsecured Debt; and

            (xi) Surety or performance bonds given by a Loan Party or Subsidiary
      thereof in the ordinary course of business in an amount not to exceed
      $50,000,000 in the aggregate.

            Q. Section 7.2.3 [Guaranties] of the Credit Agreement is hereby
amended by inserting the following immediately before the end of such Section:

            or (iv) Guaranties of Permitted Unsecured Debt provided that any
      Significant Subsidiary or Subsidiary providing such Guaranty has
      previously, or simultaneously with the execution of any such Guaranty,
      become a Guarantor under this Agreement.

            R. Section 7.2.4 [Loans and Investments] of the Credit Agreement is
hereby amended by deleting clauses (iv) - (vii) in their entirety and inserting
in lieu thereof the following:

            (iv) loans, advances and investments in wholly-owned Subsidiaries of
      the Borrower; provided, however, that loans, advances or investments in
      Subsidiaries which constitute Retail Finance Companies shall not exceed
      10% of Consolidated Net Worth in the aggregate at any one time
      outstanding;

            (v) loans, advances and investments in Subsidiaries of the Borrower
      which are not wholly-owned Subsidiaries; provided, however, that the
      aggregate of all such loans, advances and investments at any one time
      outstanding shall not exceed fifteen percent (15%) of Consolidated Net
      Worth; provided, further, that all loans, advances and investments
      pursuant to this clause (v) when added together with all loans, advances
      and investments pursuant to clause (vi) of this Section 7.2.4 shall not
      exceed, in the aggregate, twenty percent (20%) of Consolidated Net Worth;

            (vi) loans, advances and investments in Affiliates which are not
      Subsidiaries and which are permitted under Section 7.2.8; provided,
      however, that the aggregate of all such loans, advances and investments at
      any one time outstanding shall not exceed fifteen percent (15%) of
      Consolidated Net Worth; provided, further, that all loans, advances and
      investments pursuant to this clause (vi) when added together with all
      loans, advances and investments pursuant to clause (v) of this Section
      7.2.4 shall not exceed, in the aggregate, twenty percent (20%) of
      Consolidated Net Worth;

            (vii) loans (including without limitation commitments to lend),
      advances and investments in Champion Development; provided, however, that
      the aggregate of all such loans (including without limitation commitments
      to lend), advances and investments, together with any disposition of
      assets to Champion Development pursuant to Section 7.2.6(iv), shall not
      exceed, in the aggregate, fifteen percent (15%) of Consolidated Net Worth;
      and


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            (viii) loans, advances and investments in retail dealers of
      manufactured homes or other Persons doing business with any Loan Party or
      Subsidiary of any Loan Party not to exceed $10,000,000 in the aggregate at
      any one time.

            S. Section 7.2.7 [Affiliate Transactions] of the Credit Agreement is
hereby amended by retaining the existing provisions thereof and designating such
provisions as Clause (i) of such Section 7.2.7 and by adding the following
Clause (ii) to such Section 7.2.7:

            (ii) Without limiting the generality of the foregoing Clause (i) of
      this Section 7.2.7, each of the Loan Parties shall not, and shall not
      permit any of its Subsidiaries to, at any time, enter into or carry out
      any transaction or the like of any nature with Champion Development or any
      of its Subsidiaries (including purchasing property or services from or
      selling property or services to Champion Development or any of its
      Subsidiaries or otherwise transferring, leasing, disposing, or the like of
      any property or assets to or otherwise acquiring, receiving, or leasing
      any property or assets from Champion Development or any of its
      Subsidiaries or otherwise providing management, administrative,
      consulting, or other services to or receiving management, administrative,
      consulting, or other services from Champion Development or any of its
      Subsidiaries (but not including the provision of those services rendered
      in the ordinary course of business by or on behalf of a holding company
      for its organization as a whole, such as accounting and legal services
      provided by in-house professionals and staff)) unless such transaction is
      not otherwise prohibited by this Agreement, is entered into in the
      ordinary course of business upon fair and reasonable arm's-length terms
      and conditions and is in accordance with all applicable Law.

            T. Section 7.2.8 [Subsidiaries, Partnerships and Joint Ventures] of
the Credit Agreement is hereby amended by deleting the last sentence thereof in
its entirety and inserting in lieu thereof the following:

            7.2.8 Subsidiaries, Partnerships and Joint Ventures.

            Neither the Borrower nor any Subsidiary of the Borrower shall become
      or agree to become a general or limited partner in any general or limited
      partnership or become a member or manager of, or hold a limited liability
      company interest in, a limited liability company, except that (i) the
      Borrower or any Subsidiary may become a general or limited partner or
      member or manager of, or hold a limited liability company interest in,
      other Loan Parties, and (ii) the Borrower or any Subsidiary may become a
      limited partner or a member or manager of, or hold a limited liability
      company interest in an Affiliate, provided that the liability of the
      Borrower or such Subsidiary is limited to its investment in such Affiliate
      and the aggregate of all such investments does not violate Section
      7.2.4(vi).


                                      -11-
<PAGE>   12
            U. A new Section 8.1.16 [Other Subsidiaries] to the Credit Agreement
is inserted immediately following Section 8.1.15 as follows:

            8.1.16 Other Subsidiaries.

            It is not the intent that an involuntary proceeding as described in
      Section 8.1.14 or a voluntary proceeding as described in Section 8.1.15
      with respect to a Subsidiary of the Borrower other than a Guarantor shall
      constitute an Event of Default.

            V. Exhibit 2.5.2 [Swing Loan Request] of the Credit Agreement is
hereby deleted in its entirety and Exhibit 2.5.2 attached hereto is inserted in
lieu thereof:

            W. Exhibit 1.1(S) [Swing Loan Note] of the Credit Agreement is
hereby deleted in its entirety and Exhibit 1.1(S) attached hereto is inserted in
lieu thereof.

            X. Exhibit 7.2.5 [Acquisition Compliance Certificate] of the Credit
Agreement is hereby deleted in its entirety and Exhibit 7.2.5 attached hereto is
inserted in lieu thereof.

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

      3. Conditions of Effectiveness of this Agreement.

      The effectiveness of this Amendment No. 2 is expressly conditioned upon
satisfaction of each of the following conditions precedent:

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

      (b) Counterparts. The Agent shall have received counterparts of this
Amendment No. 2 duly executed by the Borrower and the Banks, and the Agent shall
have received all such other counterpart originals or certified or other copies
of such documents and proceedings in connection with such transactions, in form
and substance satisfactory to the Agent. This Amendment No. 2 may be executed by
the parties hereto in any number of separate counterparts, each of which when
taken together and duly executed and delivered shall together constitute one and
the same instrument.


                                      -12-
<PAGE>   13
      (c) Fees and Expenses. The Borrower shall have paid to the Agent the fees
and expenses set forth in that certain letter agreement dated March 29, 1999
between the Agent and the Borrower.

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

      5. Governing Law. This Amendment No. 2 shall be deemed to be a contract
under the laws of the Commonwealth of Pennsylvania and for all purposes shall be
governed by and construed and enforced in accordance with the internal laws of
the Commonwealth of Pennsylvania without regard to its conflict of laws
principles.

      6. Effective Date. This Amendment No. 2 shall be dated as of and shall be
effective as of the date and year first above written.

                            [SIGNATURE PAGE FOLLOWS]


                                      -13-
<PAGE>   14
         [SIGNATURE PAGE 1 OF 6 OF AMENDMENT NO. 2 TO CREDIT AGREEMENT]


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

                                   [BORROWER]

ATTEST:                                 CHAMPION ENTERPRISES, INC.


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
[Seal]

                                  [GUARANTORS]

ATTEST:                                 CHAMPION HOME BUILDERS CO.


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
[Seal]

ATTEST:                                 REDMAN HOMES, INC.



                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
[Seal]

ATTEST:                                 DUTCH HOUSING, INC.


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
[Seal]

ATTEST:                                 ACCENT MOBILE HOMES, INC.


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
[Seal]
<PAGE>   15
         [SIGNATURE PAGE 2 OF 6 OF AMENDMENT NO. 2 TO CREDIT AGREEMENT]

ATTEST:                                 SOUTHERN SHOWCASE HOUSING, INC.


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
[Seal]

ATTEST:                                 AUBURN CHAMP, INC.


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
[Seal]

ATTEST:                                 REDMAN BUSINESS TRUST


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
[Seal]

ATTEST:                                 CHANDELEUR HOMES, INC.


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
[Seal]

ATTEST:                                 HOMES OF LEGEND, INC.


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
[Seal]

ATTEST:                                 GRAND MANOR, INC.


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
[Seal]
<PAGE>   16
         [SIGNATURE PAGE 3 OF 6 OF AMENDMENT NO. 2 TO CREDIT AGREEMENT]


ATTEST:                                 CREST RIDGE HOMES, INC.


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
[Seal]

ATTEST:                                 LAMPLIGHTER HOMES, INC., a 
                                        Washington corporation


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
[Seal]

ATTEST:                                 LAMPLIGHTER HOMES, INC., an Oregon 
                                        corporation


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
[Seal]

ATTEST:                                 HOMES OF MERIT, INC.


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
[Seal]

ATTEST:                                 HEARTLAND HOMES, INC.


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
[Seal]

ATTEST:                                 A-1 HOMES GROUP, INC.


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
[Seal]
<PAGE>   17
         [SIGNATURE PAGE 4 OF 6 OF AMENDMENT NO. 2 TO CREDIT AGREEMENT]

                               [BANKS AND AGENTS]

                                        PNC BANK, NATIONAL ASSOCIATION,
                                        individually and as Administrative Agent


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________


                                        NBD BANK, individually and as
                                        Syndication Agent


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________


                                        COMERICA BANK, individually and as
                                        Documentation Agent


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________


                                        NATIONAL CITY BANK, individually and as
                                        Co-Agent


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________


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


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
<PAGE>   18
         [SIGNATURE PAGE 5 OF 6 OF AMENDMENT NO. 2 TO CREDIT AGREEMENT]


                                        KEYBANK NATIONAL ASSOCIATION,
                                        individually and as Co-Agent


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________


                                        NATIONSBANK, N.A., individually and as
                                        Co-Agent


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________


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


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________


                                        STANDARD FEDERAL BANK


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________


                                        THE BANK OF TOKYO-MITSUBISHI, LTD.,
                                        CHICAGO BRANCH


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________
<PAGE>   19
         [SIGNATURE PAGE 6 OF 6 OF AMENDMENT NO. 2 TO CREDIT AGREEMENT]


                                        MICHIGAN NATIONAL BANK


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________


                                        THE BANK OF NOVA SCOTIA


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________


                                        HIBERNIA NATIONAL BANK


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________


                                        BANK ONE, N.A.


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________


                                        CREDIT SUISSE FIRST BOSTON


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________


                                        By: ___________________________
                                        Name: _________________________
                                        Title: ________________________