<PAGE>

                                                                     EXHIBIT 3.1

         Pursuant to the provisions of Act 284, Public Acts of 1972, as amended,
the undersigned corporation executes the following Articles.

1.       The present name of the corporation is Champion Enterprises, Inc.

2.       The corporation identification number (CID) assigned by the Bureau is
419-343.

3.       All former names of the corporation are: NONE

4.       The date of filing the original Articles of Incorporation was March 9,
1987.

5.       The Restated Articles of Incorporation of the corporation attached as
Exhibit A supersede the Articles of Incorporation as amended and shall be the
Articles of Incorporation for the corporation.

6.       The Restated Articles of Incorporation of the corporation attached as
Exhibit A were duly adopted on the 26th day of June, 1987, in accordance with
the provisions of Section 642 of the Act, by the written consent of all the
shareholders entitled to vote in accordance with Section 407(3) of the Act.

Signed this 26th day of June, 1987

                                       By:  /s/ RODNEY A. KNIGHT
                                            Rodney A. Knight, Vice President

                                   EXHIBIT A

                      Restated Articles of Incorporation

                                      of

                           CHAMPION ENTERPRISES, INC.

                                    ARTICLE I

     The name of the corporation is Champion Enterprises, Inc.

                                  ARTICLE II

     The purpose or purposes for which the corporation is
organized is to engage in any activity within the purposes for which
corporations may be organized under the Business Corporation Act of Michigan.

<PAGE>

                                  ARTICLE III

         The total number of shares of stock which the corporation shall have
the authority to issue is 20,000,000 shares, of which 15,000,000 shares shall be
Common Stock of the par value of $1.00 each ("Common Stock") and 5,000,000
shares shall be Preferred Stock of no par value ("Preferred Stock").

                                Preferred Stock

         The Board of Directors is authorized at any time and from time to time
to provide for the issuance of shares of Preferred Stock in one or more series
with such voting powers, full or limited, or without voting powers, and with
such designations, preferences and relative participating, optional or other
special rights, and qualifications, limitations or restrictions thereof as shall
be expressed in the resolution or resolutions establishing such series and
providing for the issuance thereof adopted by the Board of Directors and as are
not expressed in these Articles of Incorporation as hereafter amended,
including, without limiting the generality of the foregoing, the following:

         (1)      the designation and number of shares of such series;

         (2)      the dividend rate of such series, the conditions and dates
                  upon which such dividends shall be payable, the preference or
                  relation of such dividends to dividends payable on any other
                  class or classes of capital stock of the corporation, and
                  whether such dividends shall be cumulative or noncumulative;

         (3)      whether the shares of such series shall be subject to
                  redemption by the corporation, and, if made subject to such
                  redemption, the times, prices, rates, adjustments and other
                  terms and conditions of such redemption;

         (4)      The terms and amount of any sinking or similar fund provided
                  for the purchase or redemption of the shares of such series;

         (5)      whether the shares of such series shall be convertible into or
                  exchangeable for shares of capital stock or other securities
                  of the corporation or of any other corporation, and, if
                  provision be made for conversion or exchange, the times,
                  prices, rates, adjustments and other terms and conditions of
                  such conversion or exchange;

         (6)      the extent, if any, to which the holders of the shares of such
                  series shall be entitled to vote as a class or otherwise with
                  respect to the election of directors or otherwise;

         (7)      the restrictions and conditions, if any, upon the issue or
                  reissue of any additional Preferred Stock ranking on a parity
                  with or prior to such shares as to dividends or upon
                  dissolution;

<PAGE>

         (8)      the rights of the holders of the shares of such series upon
                  the dissolution of, or upon the distribution of assets of, the
                  corporation, which rights may be different in the case of
                  voluntary dissolution than the case of involuntary
                  dissolution; and

         (9)      any other relative rights, preferences or limitations of
                  shares of such series consistent with this Article and
                  applicable law.

         The powers, preferences and relative participating, optional and other
special rights of each series of Preferred Stock, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding. All shares of any one series of
Preferred Stock shall be identical in all respects with all other shares of such
series, except that shares of any one series issued at different times may
differ as to the dates from which dividends thereon shall be cumulative. The
terms of any series of Preferred Stock may be amended without consent of the
holders of any other series of Preferred Stock or of the Common Stock, provided
such amendment does not adversely affect the holders of such other series of
Preferred Stock or the Common Stock.

         Shares of any series of Preferred Stock which have been issued and
reacquired in any manner and are not held as treasury shares, including shares
redeemed by purchase (whether through the operation of a retirement or sinking
fund or otherwise), will have the status of authorized and unissued Preferred
Stock and may be reissued as a part of the series of which they were originally
a part or may be reclassified into and reissued as part of a new series.

                                 Common Stock

         Each holder of Common Stock shall be entitled to one vote for each
share of Common Stock held of record on all matters on which shareholders
generally are entitled to vote. Subject to the provisions of law and the rights
of the Preferred Stock and any other class or series of stock having a
preference as to dividends over the Common Stock then outstanding, dividends may
be paid on the Common Stock at such times and in such amounts as the Board of
Directors shall determine. Upon the dissolution, liquidation or winding up of
the corporation, after any preferential amounts to be distributed to the holders
of the Preferred Stock and any other class or series of stock having a
preference over the Common Stock then outstanding have been paid or declared and
set apart for payment, the holders of the Common Stock shall be entitled to
receive all the remaining assets of the corporation available for distribution
to its shareholders ratably in proportion to the number of shares held by them,
respectively.

                                  ARTICLE IV

         The address of the registered office is:

                       615 Griswold Street
                       Detroit, Michigan 48226

<PAGE>

         The mailing address of the registered office is:

                       615 Griswold Street
                       Detroit, Michigan 48226

         The name of the resident agent at the registered office is The
Corporation Company.

                                   ARTICLE V

         No director of the corporation shall be personally liable to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, provided that the foregoing shall not eliminate or limit the
liability of a director for any of the following: (i) a breach of the director's
duty of loyalty to the corporation or its shareholders; (ii) acts or omissions
not in good faith or that involve intentional misconduct or knowing violation of
law; (iii) a violation of Section 551(1) of the Michigan Business Corporation
Act; (iv) a transaction from which the director derived an improper personal
benefit; or (v) an act or omission occurring before March 1, 1987. If the
Michigan Business Corporation Act hereafter is amended to authorize the further
elimination or limitation of the liability of directors, then the liability of a
director of the corporation, in addition to the limitation on personal liability
contained herein, shall be limited to the fullest extent permitted by the
amended Michigan Business Corporation Act. No amendment or repeal of this
Article V shall apply to or have any effect on the liability or alleged
liability of any director of the corporation for or with respect to any acts or
omissions of such director occurring prior to any such amendment or repeal.

                                  ARTICLE VI

         When a compromise or arrangement or a plan of reorganization of this
corporation is proposed between this corporation and its creditors or any class
of them or between this corporation and its shareholders or any class of them, a
court of equity jurisdiction within the state, on application of a receiver
appointed for the corporation, may order a meeting of the creditors or class of
creditors or of the shareholders or class of shareholders to be affected by the
proposed compromise or arrangement or reorganization, to be summoned in such
manner as the court directs. If a majority in number representing 3/4 in value
of the creditors or class of creditors, or of the shareholders or class of
shareholders, to be affected by the proposed compromise or arrangement or a
reorganization, agree to a compromise or arrangement or a reorganization of this
corporation as a consequence of the compromise or arrangement, the compromise or
arrangement and the reorganization, if sanctioned by the court to which the
application has been made, shall be binding on all the creditors or class of
creditors, or on all the shareholders or class of shareholders, and also on this
corporation.

<PAGE>

                        ELECTION PURSUANT TO SECTION 2
                             OF ACT NO. 58 OF THE
                              PUBLIC ACTS OF 1988

1.       The present name of the corporation is Champion Enterprises, Inc.

2.       The corporation identification number (CID) assigned by the Bureau is
         419-343.

3.       The location of its registered office is: 615 Griswold Street, Detroit,
         Michigan 48226.

         Champion Enterprises, Inc., hereby files with the Department of
Commerce, pursuant to Section 2 of Act No. 58 of the Public Acts of 1988, the
following resolution adopted by the Board of Directors of the Corporation on May
26, 1988:

                  RESOLVED, that the Board of Directors of Champion Enterprises,
         Inc., a Michigan corporation that is an "issuing public corporation" as
         defined in Section 793 of the Michigan Business Corporation Act, hereby
         elects, pursuant to Section 2 of Act No. 58 of the Public Acts of 1988,
         to have such Act apply to the Company effective as of May 31, 1988.

                                                     CHAMPION ENTERPRISES, INC.

                                                     By:  /S/ JOSEPH J. MORRIS
                                                     Joseph J. Morris, President
                                                     (Title and Name)

<PAGE>

CT CORPORATION SYSTEM
1633 BROADWAY
NEW YORK, NY 10019
212 246 5070

May 5, 1993

Thomas Pierson, Deputy Director
Michigan Department of Commerce
Corporation & Security Bureau
6546 Mercantile Way
Lansing, Michigan  48909

RE: CHANGE OF REGISTERED OFFICE ADDRESS


Dear Mr. Pierson,

This letter is to certify that The Corporation Company has changed its address
from: 615 Griswold Street, Detroit, Michigan 48226 to: 30600 Telegraph Road,
Bingham Farms, Michigan 48025. We will notify all active corporations for which
The Corporation Company is the resident agent of this change of address.

Enclosed is our check for $52,000.00 to cover the filing fee for the 10,294
active profit and non-profit corporations for which your records indicate The
Corporation Company is agent. This payment will include the fee for providing us
with an alphabetical listing of the names of all the corporations for which the
registered office has been changed. Also included in this payment is the fee for
a clean-up list which we will request within 30 days of the filing.

Please confirm in writing the date that this change was effectuated on your
records.

Thank you in advance for your cooperation in this matter.

Very truly yours,

/s/ KENNETH J. UVA

Kenneth J. Uva
Vice President

KJU:mh
encl.

Sworn before me this 5th day of May, 1993.

/s/ Theresa Alfieri
Theresa Alfieri
Notary Public, State of New York
No. 4703698
Qualified in Kings County

<PAGE>

Certificate Filed In New York County
Commission Expires Dec. 31, 1993

<PAGE>

            CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION

1.       The present name of the corporation is Champion Enterprises, Inc.

2.       The corporation identification number (CID) assigned by the Bureau is
         419-343.

3.       The location of its registered office is: 30600 Telegraph Road, Bingham
         Farms, Michigan 48025.

4.       Article III of the Articles of Incorporation is hereby amended to read
         as follows:

                           As set forth on Exhibit A

5.       b.       The foregoing amendment to the Articles of Incorporation was
                  duly adopted on the 1st day of May, 1995. The amendment:

                  was duly adopted in accordance with Section 611(2) of the Act
                  by the vote of the shareholders if a profit corporation, or by
                  the vote of the shareholders or members if a nonprofit
                  corporation, or by the vote of the directors if a nonprofit
                  corporation organized on a nonstock directorship basis. The
                  necessary votes were cast in favor of the amendment.

         Signed this 3rd day of May, 1995.

                                                   By:  /S/ LOUIS M. BALIUS
                                                   Louis M. Balius
                                                   Vice President-Secretary and
                                                   General Counsel

                                   EXHIBIT A

                                  ARTICLE III

         The total number of shares of stock which the corporation shall have
authority to issue is 35,000,000 shares, of which 30,000,000 shares shall be
Common Stock of the par value of $1.00 each ("Common Stock"), and 5,000,000
shares shall be Preferred Stock of no par value ("Preferred Stock").

                                Preferred Stock

         The Board of Directors is authorized at any time and from time to time
to provide for the issuance of shares of Preferred Stock in one or more series
with such voting powers, full or

<PAGE>

limited, or without voting powers, and with such designations, preferences and
relative participating, optional or other special rights, and qualifications,
limitations or restrictions thereof as shall be expressed in the resolution or
resolutions establishing such series and providing for the issuance thereof
adopted by the Board of Directors and as are not expressed in these Articles of
Incorporation as hereafter amended, including, without limiting the generality
of the foregoing, the following:

         (1)      the designation and number of shares of such series;

         (2)      the dividend rate of such series, the conditions and dates
                  upon which such dividends shall be payable, the preference or
                  relation of such dividends to dividends payable on any other
                  class or classes of capital stock of the corporation, and
                  whether such dividends shall be cumulative or noncumulative;

         (3)      whether the shares of such series shall be subject to
                  redemption by the corporation, and, if made subject to such
                  redemption, the times, prices, rates, adjustments and other
                  terms and conditions of such redemption;

         (4)      the terms and amount of any sinking or similar fund provided
                  for the purchase or redemption of the shares of such series;

         (5)      whether the shares of such series shall be convertible into or
                  exchangeable for shares of capital stock or other securities
                  of the corporation or of any other corporation, and, if
                  provision be made for conversion or exchange, the times,
                  prices, rates, adjustments and other terms and conditions of
                  such conversion or exchange;

         (6)      the extent, if any, to which the holders of the shares of such
                  series shall be entitled to vote as a class or otherwise with
                  respect to the election of directors or otherwise;

         (7)      the restrictions and conditions, if any, upon the issue or
                  reissue of any additional Preferred Stock ranking on a parity
                  with or prior to such shares as to dividends or upon
                  dissolution;

         (8)      the rights of the holders of the shares of such series upon
                  the dissolution of, or upon the distribution of assets of, the
                  corporation, which rights may be different in the case of
                  voluntary dissolution than the case of involuntary
                  dissolution; and

         (9)      any other relative rights, preferences or limitations of
                  shares of such series consistent with this Article and
                  applicable law.

         The powers, preferences and relative participating, optional and other
special rights of each series of Preferred Stock, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding. All shares of any one series of
Preferred Stock

<PAGE>

shall be identical in all respects with all other shares of such series, except
that shares of any one series issued at different times may differ as to the
dates from which dividends thereon shall be cumulative. The terms of any series
of Preferred Stock may be amended without consent of the holders of any other
series of Preferred Stock or of the Common Stock, provided such amendment does
not adversely affect the holders of such other series of Preferred Stock or the
Common Stock.

         Shares of any series of Preferred Stock which have been issued and
reacquired in any manner and are not held as treasury shares, including shares
redeemed by purchase (whether through the operation of a retirement or sinking
fund or otherwise), will have the status of authorized and unissued Preferred
Stock and may be reissued as a part of the series of which they were originally
a part or may be reclassified into and reissued as a part of a new series.

                                 Common Stock

         Each holder of Common Stock shall be entitled to one vote for each
share of Common Stock held of record on all matters on which shareholders
generally are entitled to vote. Subject to the provisions of law and the rights
of the Preferred Stock and any other class or series of stock having a
preference as to dividends over the Common Stock then outstanding, dividends may
be paid on the Common Stock at such times and in such amounts as the Board of
Directors shall determine. Upon the dissolution, liquidation or winding up of
the corporation, after any preferential amounts to be distributed to the holders
of the Preferred Stock and any other class or series of stock having a
preference over the Common Stock then outstanding have been paid or declared and
set apart for payment, the holders of the Common Stock shall be entitled to
receive all the remaining assets of the corporation available for distribution
to its shareholders ratably in proportion to the number of shares held by them,
respectively.

<PAGE>

                           CERTIFICATE OF AMENDMENT TO
                      ARTICLES OF INCORPORATION DETERMINING
                    THE TERMS OF THE SERIES A PREFERRED STOCK
                                       of

                           CHAMPION ENTERPRISES, INC.

         Pursuant to the provisions of Act 284, Public Acts of 1972, the
undersigned corporation executes the following Certificate:

         1.       The present name of the corporation is Champion Enterprises,
Inc. (the "Corporation").

         2.       The Corporation Identification Number (CID) assigned by the
Bureau is 419-343.

         3.       The location of the registered office is Suite 3275, 30600
Telegraph Road, Bigham Farms, Michigan 48025.

         4.       Article III of the Amended and Restated Articles of
Incorporation of the Corporation is hereby amended by adding the following:

         Series A Preferred Stock, No Par Value

         A.       Designation and Amount. The shares of such series shall be
designated as "Series A Preferred Stock, no par value," and the number of shares
constituting such series shall be 300,000.

         B.       Dividends and Distributions.

                  (1) Subject to any prior and superior rights of the holders of
any series of Preferred Stock ranking prior and superior to the shares of Series
A Preferred Stock with respect to dividends that may be authorized by the
Articles of Incorporation, the holders of shares of Series A Preferred Stock
shall be entitled prior to the payment of any dividends on shares ranking junior
to the Series A Preferred Stock to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the last day of January, April, July and October in
each year (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in shares of

<PAGE>

Common Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock, par value $1.00
per share, of the Corporation (the "Common Stock") since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock. In the event the Corporation
shall at any time after February 5, 1996 (the "Rights Declaration Date") (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount to
which holders of shares of Series A Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be adjusted
by multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

                  (2) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (1) above immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series A
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.

                  (3) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares of Series
A Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.

                  (4) Dividends in full shall not be declared or paid or set
apart for payment on the Series A Preferred Stock for a

<PAGE>

dividend period terminating on the Quarterly Dividend Payment Date unless
dividends in full have been declared or paid or set apart for payment on the
Preferred Stock of all series (other than series with respect to which dividends
are not cumulative from a date prior to such dividend date) for the respective
dividend periods terminating on such dividend date. When the dividends are not
paid in full on all series of the Preferred Stock, the shares of all series
shall share ratably in the payment of dividends, including accumulations, if
any, in accordance with the sums which would be payable on said shares if all
dividends were declared and paid in full.

                  C. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:

                  (1) Subject to the provision for adjustment hereinafter set
         forth, each share of Series A Preferred Stock shall entitle the holder
         thereof to 100 votes on all matters voted on at a meeting of the
         shareholders of the Corporation. In the event the Corporation shall at
         any time after the Rights Declaration Date (i) declare any dividend on
         Common Stock payable in shares of Common Stock, or (ii) subdivide the
         outstanding Common Stock, or (iii) combine the outstanding Common Stock
         into a smaller number of shares, then in each such case the number of
         votes per share to which holders of shares of Series A Preferred Stock
         were entitled immediately prior to such event shall be adjusted by
         multiplying such number by a fraction the numerator of which is the
         number of shares of Common Stock outstanding immediately after such
         event and the denominator of which is the number of shares of Common
         Stock that were outstanding immediately prior to such event.

                  (2) Except as otherwise provided herein or by law, the holders
         of shares of Series A Preferred Stock and the holders of shares of
         Common Stock shall vote together as one voting group on all matters
         voted on at a meeting of shareholders of the Corporation.

                  (3) Except as set forth herein, holders of Series A Preferred
         Stock shall have no special voting rights and their consent shall not
         be required (except to the extent they are entitled to vote with
         holders of Common Stock as set forth herein) for taking any corporate
         action.

         D. Certain Restrictions.

                  (1) Whenever quarterly dividends or other dividends or

distributions payable on the Series A Preferred Stock as provided in Section B.
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:

                  (a) declare or pay dividends on, make any other distributions
         on, or redeem or purchase or otherwise acquire for consideration any
         shares of stock ranking junior (either as to dividends or upon
         liquidation, dissolution or winding up) to the Series A Preferred
         Stock;

<PAGE>

                  (b) declare or pay dividends on or make any other
         distributions on any shares or stock ranking on a parity (either as to
         dividends or upon liquidation, dissolution or winding up) with the
         Series A Preferred Stock, except dividends paid ratably on the Series A
         Preferred Stock and all such parity stock on which dividends are
         payable or in arrears in proportion to the total amounts to which the
         holders of all such shares are then entitled;

                  (c) redeem or purchase or otherwise acquire for consideration
         shares of any stock ranking on a parity (either as to dividends or upon
         liquidation, dissolution or winding up) with the Series A Preferred
         Stock, provided that the Corporation may at any time redeem, purchase
         or otherwise acquire shares of any such parity stock in exchange for
         shares of any stock of the Corporation ranking junior (either as to
         dividends or upon dissolution, liquidation or winding up) to the Series
         A Preferred Stock;

                  (d) purchase or otherwise acquire for consideration any shares
         of Series A Preferred Stock or any shares of stock ranking on a parity
         with the Series A Preferred Stock, except in accordance with a purchase
         offer made in writing or by publication (as determined by the Board of
         Directors) to all holders of such shares upon such terms as the Board
         of Directors, after consideration of the respective annual dividend
         rates and other relative rights and preferences of the respective
         series and classes, shall determine in good faith will result in fair
         and equitable treatment among the respective series or classes.

                  (2) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 5, purchase or otherwise acquire such shares at such time and in
such manner.

         E.       Liquidation, Dissolution or Winding Up.

                  (1) Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless, prior thereto, the holders
of shares of Series A Preferred Stock shall have received $100.00 per share,
plus an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the "Series A Liquidation
Preference"). Following the payment of the full amount of the Series A
Liquidation Preference, no additional distributions shall be made to the holders
of shares of Series A Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph (3) below to reflect such events as stocks splits, stock dividends
and recapitalizations with respect to the Common Stock (such number in clause
(ii), the "Adjustment Number"). Following the payment of the full amount of the

<PAGE>

Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Preferred Stock and Common Stock, respectively,
holders of Series A Preferred Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the remaining assets to be
distributed.

                  (2) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of Preferred
Stock, if any, which rank on a parity with the Series A Preferred Stock, then
such remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In the event,
however, that there are not sufficient assets available to permit payment in
full of the Common Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock.

                  (3) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

         F.       Merger, Consolidation. etc. In case the Corporation shall
enter into any merger, consolidation, combination or other transaction in which
the shares of Common Stock are exchanged or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

         G.       Redemption. The shares of Series A Preferred Stock shall not
be redeemable.

         H.       Ranking. The Series A Preferred Stock shall rank on a parity
with all other series of the Corporation's Preferred

<PAGE>

Stock as to the payment of dividends and other distribution of assets, unless,
in accordance with authorization in the Articles of Incorporation, the terms of
any such series shall provide otherwise.

         I.       Amendment. The Articles of Incorporation of the
Corporation shall not be further amended in any manner which would alter or
change the powers, preferences or special rights of the Series A Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of a
majority of the outstanding shares of Series A Preferred Stock, voting
separately as one voting group.

         J.       Fractional Shares. Series A Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.

         5.       The foregoing Amendment to the Amended and Restated Articles
of Incorporation of the Corporation was adopted on January 9, 1996. The
Amendment to the Amended and Restated Articles of Incorporation of the
Corporation was duly adopted by the Board of Directors of the Corporation,
without shareholder action, pursuant to Sections 302(3) and 523 of the Act and
Article III of the Amended and Restated Articles of Incorporation of the
Corporation.

         Signed this 8th day of February, 1996.

                                            CHAMPION ENTERPRISES, INC.

                                            By:   /s/ A. JACQUELINE DOUT
                                                  A. Jacqueline Dout
                                                  Executive Vice President and
                                                  Chief Financial Officer


<PAGE>

            CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION

1.       The present name of the corporation is: Champion Enterprises, Inc.

2.       The identification number assigned by the Bureau is: 419-343

3.       The location of the registered office is: 30600 Telegraph Road, Bingham
         Farms, Michigan 48025

4.       Article III of the Articles of Incorporation is hereby amended to read
         as follows:

                        As set forth on Exhibit A

6.       The forgoing amendment to the Articles of Incorporation was duly
         adopted on the 29th day of April, 1997 by the shareholders if a profit
         corporation, or by the shareholders or members if a nonprofit
         corporation, at a meeting. The necessary votes were cast in favor of
         the amendment.

         Signed this 2nd day of May, 1997

         By:  /s/ JOHN J. COLLINS, JR.

         John J. Collins, Jr.
         Vice President, General Counsel and Secretary

<PAGE>

                                    EXHIBIT A

                                   ARTICLE III

         The total number of shares of stock which the corporation shall have
authority to issue is 125,000,000 shares, of which 120,000,000 shares shall be
Common Stock of the par value of $1.00 each ("Common Stock"), and 5,000,000
shares shall be Preferred Stock of no par value ("Preferred Stock").

                         Preferred Stock

         The Board of Directors is authorized at any time and from time to time
to provide for the issuance of shares of Preferred Stock in one or more series
with such voting powers, full or limited, or without voting powers, and with
such designations, preferences and relative participating, optional or other
special rights, and qualifications, limitations or restrictions thereof as shall
be expressed in the resolution or resolutions establishing such series and
providing for the issuance thereof adopted by the Board of Directors and as are
not expressed in these Articles of Incorporation as hereafter amended,
including, without limiting the generality of the foregoing, the following:

         (1)      the designation and number of shares of such series;

         (2)      the dividend rate of such series, the conditions and dates
                  upon which such dividends shall be payable, the preference or
                  relation of such dividends to dividends payable on any other
                  class or classes of capital stock of the corporation, and
                  whether such dividends shall be cumulative or noncumulative;

         (3)      whether the shares of such series shall be subject to
                  redemption by the corporation, and, if made subject to such
                  redemption, the times, prices, rates, adjustments and other
                  terms and conditions of such redemption;

         (4)      the terms and amount of any sinking or similar fund provided
                  for the purchase or redemption of the shares of such series;

         (5)      whether the shares of such series shall be convertible into or
                  exchangeable for shares of capital stock or other securities
                  of the corporation or of any other corporation, and, if
                  provision be made for conversion or exchange, the times,
                  prices, rates, adjustments and other terms and conditions of
                  such conversion or exchange;

         (6)      the extent, if any, to which the holders of the shares of such
                  series shall be entitled to vote as a class or otherwise with
                  respect to the election of directors or otherwise;

         (7)      the restrictions and conditions, if any, upon the issue or
                  reissue of any additional Preferred Stock ranking on a parity
                  with or prior to such shares as to dividends or upon
                  dissolution;

         (8)      the rights of the holders of the shares of such series upon
                  the dissolution of, or upon the distribution of assets of, the
                  corporation, which rights may be different in the case of
                  voluntary dissolution than the case of involuntary
                  dissolution; and

         (9)      any other relative rights, preferences or limitations of
                  shares of such series consistent with this Article and
                  applicable law.

         The powers, preferences and relative participating, optional and other
special rights of each series of Preferred Stock, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding. All shares of any one series of
Preferred Stock shall be identical in all respects with all other shares of such
series, except that shares of any one series issued at different times may
differ as to the dates from which dividends

<PAGE>

thereon shall be cumulative. The terms of any series of Preferred Stock may be
amended without consent of the holders of any other series of Preferred Stock or
of the Common Stock, provided such amendment does not adversely affect the
holders of such other series of Preferred Stock or the Common Stock.

         Shares of any series of Preferred Stock which have been issued and
reacquired in any manner and are not held as treasury shares, including shares
redeemed by purchase (whether through the operation of a retirement or sinking
fund or otherwise), will have the status of authorized and unissued Preferred
Stock and may be reissued as a part of the series of which they were originally
a part or may be reclassified into and reissued as a part of a new series.

         Series A Preferred Stock, No Par Value

         A.       Designation and Amount. The shares of such series shall be
designated as "Series A Preferred Stock, no par value," and the number of shares
constituting such series shall be 300,000.

         B.       Dividends and Distributions.

                  (1) Subject to any prior and superior rights of the holders of
any series of Preferred Stock ranking prior and superior to the shares of Series
A Preferred Stock with respect to dividends that may be authorized by the
Articles of Incorporation, the holders of shares of Series A Preferred Stock
shall be entitled prior to the payment of any dividends on shares ranking junior
to the Series A Preferred Stock to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the last day of January, April, July and October in
each year (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock, par value $1.00 per share, of the
Corporation (the "Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Corporation shall at any time after February
5, 1996 (the "Rights Declaration Date") (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under clause (b)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

                  (2) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (1) above immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series A
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.

                  (3) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Preferred Stock, unless the

<PAGE>

date of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date fixed
for the payment thereof.

                  (4) Dividends in full shall not be declared or paid or set
apart for payment on the Series A Preferred Stock for a dividend period
terminating on the Quarterly Dividend Payment Date unless dividends in full have
been declared or paid or set apart for payment on the Preferred Stock of all
series (other than series with respect to which dividends are not cumulative
from a date prior to such dividend date) for the respective dividend periods
terminating on such dividend date. When the dividends are not paid in full on
all series of the Preferred Stock, the shares of all series shall share ratably
in the payment of dividends, including accumulations, if any, in accordance with
the sums which would be payable on said shares if all dividends were declared
and paid in full.

         C. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:

                  (1)      Subject to the provision for adjustment hereinafter
         set forth, each share of Series A Preferred Stock shall entitle the
         holder thereof to 100 votes on all matters voted on at a meeting of the
         shareholders of the Corporation. In the event the Corporation shall at
         any time after the Rights Declaration Date (i) declare any dividend on
         Common Stock payable in shares of Common Stock, or (ii) subdivide the
         outstanding Common Stock, or (iii) combine the outstanding Common Stock
         into a smaller number of shares, then in each such case the number of
         votes per share to which holders of shares of Series A Preferred Stock
         were entitled immediately prior to such event shall be adjusted by
         multiplying such number by a fraction the numerator of which is the
         number of shares of Common Stock outstanding immediately after such
         event and the denominator of which is the number of shares of Common
         Stock that were outstanding immediately prior to such event.

                  (2)      Except as otherwise provided herein or by law, the
         holders of shares of Series A Preferred Stock and the holders of shares
         of Common Stock shall vote together as one voting group on all matters
         voted on at a meeting of shareholders of the Corporation.

                  (3)      Except as set forth herein, holders of Series A
         Preferred Stock shall have no special voting rights and their consent
         shall not be required (except to the extent they are entitled to vote
         with holders of Common Stock as set forth herein) for taking any
         corporate action.

         D.       Certain Restrictions.

                  (1) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section B.
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid

<PAGE>

in full, the Corporation shall not:

                  (a) declare or pay dividends on, make any other distributions
         on, or redeem or purchase or otherwise acquire for consideration any
         shares of stock ranking junior (either as to dividends or upon
         liquidation, dissolution or winding up) to the Series A Preferred
         Stock;

                  (b) declare or pay dividends on or make any other
         distributions on any shares or stock ranking on a parity (either as to
         dividends or upon liquidation, dissolution or winding up) with the
         Series A Preferred Stock, except dividends paid ratably on the Series A
         Preferred Stock and all such parity stock on which dividends are
         payable or in arrears in proportion to the total amounts to which the
         holders of all such shares are then entitled;

                  (c) redeem or purchase or otherwise acquire for consideration
         shares of any stock ranking on a parity (either as to dividends or upon
         liquidation, dissolution or winding up) with the Series A Preferred
         Stock, provided that the Corporation may at any time redeem, purchase
         or otherwise acquire shares of any such parity stock in exchange for
         shares of any stock of the Corporation ranking junior (either as to
         dividends or upon dissolution, liquidation or winding up) to the Series
         A Preferred Stock;

                  (d) purchase or otherwise acquire for consideration any shares
         of Series A Preferred Stock or any shares of stock ranking on a parity
         with the Series A Preferred Stock, except in accordance with a purchase
         offer made in writing or by publication (as determined by the Board of
         Directors) to all holders of such shares upon such terms as the Board
         of Directors, after consideration of the respective annual dividend
         rates and other relative rights and preferences of the respective
         series and classes, shall determine in good faith will result in fair
         and equitable treatment among the respective series or classes.

                  (2) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 5, purchase or otherwise acquire such shares at such time and in
such manner.

         E.       Liquidation, Dissolution or Winding Up.

                  (1) Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless, prior thereto, the holders
of shares of Series A Preferred Stock shall have received $100.00 per share,
plus an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the "Series A Liquidation
Preference"). Following the payment of the full amount of the Series A
Liquidation Preference, no additional distributions shall be made to the holders
of shares of Series A Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph (3) below to reflect such events as stocks splits, stock dividends
and recapitalizations with respect to the Common Stock (such number in clause
(ii), the "Adjustment Number"). Following the payment of the full amount of the
Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Preferred Stock and Common Stock, respectively,
holders of Series A Preferred Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the remaining assets to be
distributed.

                  (2) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of Preferred
Stock, if any, which rank on a parity

<PAGE>

with the Series A Preferred Stock, then such remaining assets shall be
distributed ratably to the holders of such parity shares in proportion to their
respective liquidation preferences. In the event, however, that there are not
sufficient assets available to permit payment in full of the Common Adjustment,
then such remaining assets shall be distributed ratably to the holders of Common
Stock.

                  (3) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

         F. Merger, Consolidation. etc. In case the Corporation shall enter into
any merger, consolidation, combination or other transaction in which the shares
of Common Stock are exchanged or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series A
Preferred Stock shall at the same time be similarly exchanged or changed in an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series A Preferred
Stock shall be adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.

         G. Redemption. The shares of Series A Preferred Stock shall not be
redeemable.

         H. Ranking. The Series A Preferred Stock shall rank on a parity with
all other series of the Corporation's Preferred Stock as to the payment of
dividends and other distribution of assets, unless, in accordance with
authorization in the Articles of Incorporation, the terms of any such series
shall provide otherwise.

         I. Amendment. The Articles of Incorporation of the Corporation shall
not be further amended in any manner which would alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of a majority of the
outstanding shares of Series A Preferred Stock, voting separately as one voting
group.

         J. Fractional Shares. Series A Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.

                                  Common Stock

         Each holder of Common Stock shall be entitled to one vote for each
share of Common Stock held of record on all matters on which shareholders
generally are entitled to vote. Subject to the provisions of law and the rights
of the Preferred Stock and any other class or series of stock having a
preference as to dividends over the Common Stock then outstanding, dividends may
be paid on the Common Stock at such times and in such amounts as the Board of
Directors shall determine. Upon the dissolution, liquidation or winding up of
the corporation, after any preferential

<PAGE>

amounts to be distributed to the holders of the Preferred Stock and any other
class or series of stock having a preference over the Common Stock then
outstanding have been paid or declared and set apart for payment, the holders of
the Common Stock shall be entitled to receive all the remaining assets of the
corporation available for distribution to its shareholders ratably in proportion
to the number of shares held by them, respectively.

Champion Enterprises, Inc.
Computation of Earnings Per Share

(in 000's, except per share amounts)

<TABLE>
<CAPTION>
                               Three Months Ended    Six Months Ended
                               June 28,  June 29,   June 28,   June 29,
                                 1997      1996       1997      1996
<S>                            <C>       <C>        <C>        <C>
EARNINGS

Net Income                     $18,200   $19,146     $32,039   $32,888
                               =======   =======     =======   =======


SHARES USED FOR CALCULATING
   EARNINGS PER SHARE

Average Shares Outstanding      48,252    47,428     48,155    47,518
Additional Shares Resulting
   from Assumed Exercise
   of Stock Options              1,235     1,980      1,425     1,807
                                ------    ------     ------    ------
Total                           49,487    49,408     49,580    49,325
                                ======    ======     ======    ======

PER SHARE AMOUNTS

Net Income                       $0.37     $0.39     $0.65     $0.67
                                 =====     =====     =====     =====
</TABLE>

NOTE: This calculation is submitted in accordance with Securities and Exchange
Act of 1934 Release No. 9083.

<PAGE>

                                                                     EXHIBIT 3.3

             CERTIFICATE OF CORRECTION TO ARTICLES OF INCORPORATION

                            CERTIFICATE OF CORRECTION

1.       The name of the corporation or limited liability company is CHAMPION
         ENTERPRISES, INC.

2.       The identification number assigned by the Bureau is: 419-343

3.       The corporation or limited liability company is formed under the laws
         of the State of Michigan.

4.       That a Certificate of Amendment to the Articles of Incorporation was
         filed by the Bureau on May 7, 1996 and that said document requires
         correction.

5.       Describe the inaccuracy or defect contained in the above named
         document:

                  The number of shares of Series A Preferred Stock, No Par
                  Value, was incorrectly stated to be 300,000 shares rather than
                  750,000 shares.

6.       The document is corrected as follows:

                  Replace Article III, Series A Preferred Stock No Par Value,
                  Paragraph A with the following:

                  AA.      Designation and Amount. The shares of such series
                           shall be designated "Series A Preferred Stock, no par
                           value, and the number of shares constituting such
                           series shall be 750,000."

7.       This document is hereby executed in the same manner as the Act requires
         the document being corrected to be executed.

         Signed this 12th day of February, 1999

         /s/ JOHN J. COLLINS, JR.
         John J. Collins, Jr., Vice
         President, General Counsel and Secretary

<PAGE>

<TABLE>
<CAPTION>
              MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES
               CORPORATION, SECURITIES AND LAND DEVELOPMENT BUREAU
------------------------------------------------------------------------------------------
<S>                                                                   <C>
Date Received

                                                                      (For Bureau Use Only)
------------------------------------------------------------------------------------------
[Ld 4A]
------------------------------------------------------------------------------------------
NAME       Valerie A. Dormady
------------------------------------------------------------------------------------------
ADDRESS    Dykema Gossett PLLC
           800 Michigan National Tower
------------------------------------------------------------------------------------------
CITY   Lansing  STATE  Michigan ZIP CODE 48933
------------------------------------------------------------------------------------------
</TABLE>

DOCUMENT WILL BE RETURNED TO NAME AND ADDRESS INDICATED ABOVE

            CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION

                                       OF

                           CHAMPION ENTERPRISES, INC.

         Pursuant to the provision of Act 284, Public Acts of 1972, as amended,
the undersigned corporation executes the following certificate:

1.       The present name of the Corporation is: Champion Enterprises, Inc.

2.       The corporation identification number (CID) assigned by the Bureau is:
         419-343.

3.       Article III of the Articles of Incorporation is hereby amended to (1)
amend and restate the Certificate of Rights and Preferences of Series B-1
Cumulative Convertible Preferred Stock of Champion Enterprises, Inc. and to (2)
add a Certificate of Resolution setting forth the rights and preferences of
Series C Cumulative Convertible Preferred Stock of Champion Enterprises, Inc.

         SEE ATTACHED FOR AMENDED AND RESTATED PROVISIONS AND ADDITIONAL
PROVISIONS TO ARTICLE III.

4.       The foregoing amendment to the Articles of Incorporation was duly
adopted on the 29th day of March, 2002. The amendment was duly adopted by a
majority of the Board of Directors of the Corporation pursuant to and as
permitted by Article III of the Corporations's Articles of Incorporation.

<PAGE>

         Signed this 29th day of April, 2002.

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

Name of person or organization           Preparer's name and business telephone
remitting fees:                          number:

Champion Enterprises, Inc.               Valerie A. Dormady
                                         (517) 374-9144

<PAGE>

                           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.

<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.

<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

<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

<PAGE>

                      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

<PAGE>

--------------------------------------------------------------------------------
               MICHIGAN DEPARTMENT OF CONSUMER & INDUSTRY SERVICES
                          BUREAU OF COMMERCIAL SERVICES
--------------------------------------------------------------------------------
Date Received

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

--------------------------------------------------------
Name                                                     Effective Date:
Douglas S. Parker c/o Dykema Gossett PLLC
--------------------------------------------------------
Address
39577 Woodward Avenue, Suite 300
--------------------------------------------------------
City                  State                Zip Code
Bloomfield Hills       MI                   48304
--------------------------------------------------------------------------------
         DOCUMENT WILL BE RETURNED TO THE NAME AND ADDRESS ENTERED ABOVE.

            CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
              For use by Domestic Profit and Nonprofit Corporations

Pursuant to the provisions of Act 284, Public Acts of 1972, the undersigned
corporation executes the following Certificate:

1.   The present name of the corporation is: Champion Enterprises, Inc.

2.   The identification number assigned by the Bureau is: 419-343

3.   Article III of the Articles of Incorporation is hereby amended to amend and
     restate the Certificate of Rights and Preferences of Series C Cumulative
     Convertible Preferred Stock of Champion Enterprises, Inc.

     SEE ATTACHED FOR AMENDED AND RESTATED PROVISIONS TO ARTICLE III

4.   This amendment was duly authorized on the 29th day of March, 2002 by a
     majority of the Board of Directors of the Corporation pursuant to and as
     permitted by Article III of the Corporation's Articles of Incorporation.

Signed this 31st day of January, 2003

By:  /s/ John J. Collins
     --------------------------------------------
     John J. Collins, Jr.
Its: Senior Vice President, General Counsel
     and Secretary

<PAGE>

Name of person remitting fees:

Dykema Gossett PLLC

Preparer's name and business telephone number:

Douglas S. Parker
248-203-0703

<PAGE>

                           FIRST AMENDED AND RESTATED

                      CERTIFICATE OF RIGHTS AND PREFERENCES

                                       OF

                 SERIES C CUMULATIVE CONVERTIBLE PREFERRED STOCK

                                       OF

                           CHAMPION ENTERPRISES, INC.

                  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) 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

<PAGE>

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" is $5.6644, subject to adjustment for stock
splits, recombinations, stock dividends and the like.

                  "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).

                                        2

<PAGE>

                  "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
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.

                                        3

<PAGE>

         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.

                  "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

                                        4

<PAGE>

          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.

                  "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.

                                        5

<PAGE>

                                   (A) Holders shall be entitled to receive out
                     of the assets of 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
                     shallhereinafter 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 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 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

                                        6

<PAGE>

                   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
                   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

                                        7

<PAGE>

                   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
                   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,

                                        8

<PAGE>

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:

                                    (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

                                        9

<PAGE>

                                             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.

         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

                                       10

<PAGE>

                       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;
                                   (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

                                       11

<PAGE>

                                   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.

                                   (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

                                       12

<PAGE>

                       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 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

                                       13

<PAGE>

                                   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 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

                                       14

<PAGE>

                     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 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

                                       15

<PAGE>

                     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 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

                                       16

<PAGE>

                     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,
                                   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.

                                       17

<PAGE>

                                                   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 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

                                       18

<PAGE>

          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 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

                                       19

<PAGE>

                                     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 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)

                                       20

<PAGE>

                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 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

                                       21

<PAGE>

                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

<PAGE>

--------------------------------------------------------------------------------
                MICHIGAN DEPARTMENT OF LABOR AND ECONOMIC GROWTH
                          BUREAU OF COMMERCIAL SERVICES
--------------------------------------------------------------------------------
Date Received

-------------------------------------------------
Name                                                Effective Date:
Douglas S. Parker c/o Dykema Gossett PLLC
-------------------------------------------------
Address
39577 Woodward Avenue, Suite 300
-------------------------------------------------
City                 State         Zip Code
Bloomfield Hills      MI            48304
--------------------------------------------------------------------------------
         DOCUMENT WILL BE RETURNED TO THE NAME AND ADDRESS ENTERED ABOVE.

            CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
              For use by Domestic Profit and Nonprofit Corporations

Pursuant to the provisions of Act 284, Public Acts of 1972, the undersigned
corporation executes the following Certificate:

1.   The present name of the corporation is: Champion Enterprises, Inc.

2.   The identification number assigned by the Bureau is: 419-343

3.   Article III of the Articles of Incorporation is hereby amended to add a
     Certificate of Resolution setting forth the rights and preferences of
     Series B-2 Cumulative Convertible Preferred Stock of Champion Enterprises,
     Inc.

     SEE ATTACHED FOR AMENDED PROVISIONS TO ARTICLE III.

4.   This amendment was duly authorized on the 1st day of March, 2004 by
     unanimous consent of the Board of Directors of the Corporation pursuant to
     and as permitted by Article III of the Corporation's Articles of
     Incorporation as amended on May 7, 1997.

Signed this 1st day of March, 2004

By:  /s/ John J. Collins, Jr.
     --------------------------------------------
     John J. Collins, Jr.
Its: Senior Vice President, General Counsel
     and Secretary

<PAGE>

Name of person remitting fees:

Dykema Gossett PLLC

Preparer's name and business telephone number:

Douglas S. Parker
248-203-0703

<PAGE>

                      CERTIFICATE OF RIGHTS AND PREFERENCES

                                       OF

                SERIES B-2 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 1, 2004 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-2 Cumulative
Convertible Preferred Stock, no par value, which shall consist of Twelve
Thousand (12,000) 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-2 Cumulative
Convertible Preferred Stock shall be Twelve Thousand (12,000).

         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)

<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 B-2 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 the greater of (i) one hundred and twenty
percent (120%) of the Average Market Price calculated as of the Subsequent
Closing Date (as defined in the Main Agreement) and (ii) seven dollars and fifty
cents ($7.50), in each case subject to adjustment for stock splits,
recombinations, stock dividends and the like.

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

<PAGE>

         "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-2 Preferred Stock.

         "Issue Date" means with respect to any shares of Series B-2 Preferred
Stock the original date of issuance of such shares of Series B-2 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-2 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
distribution by the Company of cash or other property to the holders of Common
Stock, be deemed to be a Liquidation.

<PAGE>

         "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-2 Preferred Stock" means more than fifty
percent (50%) of the then outstanding shares of Series B-2 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-2 Preferred Stock at any time shall be entitled to receive, or shall have
received, upon conversion or redemption of the Series B-2 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-2 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-2 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).

<PAGE>

         "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-2 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 B-2 Preferred Stock" means the Series B-2 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-2 Preferred Stock.

<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-2 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-2 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

<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-2
         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.

<PAGE>

                  (D) So long as any shares of the Series B-2 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-2
         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-2 Preferred Stock in an amount for each such share
         of Series B-2 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-2 Preferred Stock.

<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-2 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-2 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-2 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-2 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-2 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-2
         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-2 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-2 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-2 Preferred Stock:

                           (A) Each share of Series B-2 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-2 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:

<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-2 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-2 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-2 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-2 Preferred
                                             Stock to the rights upon
                                             liquidation of the holders of any
                                             other capital stock of the Company;

                                                      3. Make the Series B-2
                                             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-2
                           Preferred Stock in any manner.

                  6. Conversion and Redemption.

                           (A) Procedure for Conversion.

<PAGE>

                                    (i) Shares of Series B-2 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 July 3, 2006, for all but not less
                           than all of the shares of Series B-2 Preferred Stock
                           if (x) the Daily Market Price exceeds two hundred
                           percent (200%) of the Conversion Price on at least
                           twenty-five (25) Business Days during a period of
                           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 Conversion of shares of Series
                           B-2 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 B-2 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 "Five 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 Five 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 B-2 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;
                                    (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

<PAGE>

                                    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 B-2
                           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-2 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.

<PAGE>

                                    (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-2 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
                           Stock certificate of like tenor, calling in the
                           aggregate on the face or faces thereof for the number
                           of shares of Series B-2 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-2 Preferred
                           Stock shall occur under any of the following
                           circumstances:

                                             A. At any time on or after July 3,
                                    2003, a Holder of Series B-2 Preferred Stock
                                    may require the Company to redeem any or all
                                    shares of Series B-2 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),
                                    unless the Company satisfies the conditions
                                    for cash redemption set forth in Section
                                    6(B)(ii) and elects to redeem such shares
                                    for cash. 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-2 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

<PAGE>

                                    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 July 3, 2008, the Company
                                    shall redeem all of the Series B-2 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 B-2 Preferred Stock
                                    into Common Stock in accordance with the
                                    provisions of Section 6(A) hereof as of the
                                    Business Day immediately preceding July 3,
                                    2008 (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
                           Redemption Notice (or, in the case of redemption
                           pursuant to Section 6(B)(i)(B), by May 29, 2008 (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, (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 July 3, 2008) (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-2 Preferred Stock
                           shall be for cash. At such closing, the Holder shall
                           surrender the certificate representing the shares of
                           Series B-2 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

<PAGE>

                           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 of July 3, 2008 (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-2 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

<PAGE>

                           on or before the fifth Business Day following and
                           excluding the Redemption Notice Date to redeem such
                           shares of Series B-2 Preferred Stock for shares of
                           Registered Common Stock, 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 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 B-2 Preferred Stock
                           shall be for Registered Common Stock. At such
                           closing, the Holder shall surrender the certificate
                           representing the shares of Series B-2 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-2 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 B-2 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-2 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, (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, the Daily Market Price on the
                           fifth Business Day following and excluding the
                           Redemption Notice 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

<PAGE>

                           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 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

<PAGE>

                           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-2 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-2 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-2 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-2 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 B-2 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-2 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-2 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

<PAGE>

                           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-2
                           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-2
                                    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-2 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 B-2 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-2 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

<PAGE>

                                    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-2 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
                           B-2 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-2 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-2 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

<PAGE>

                           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-2 Preferred Stock
                           multiplied by (y) the Merger Adjustment Percentage
                           and provided further, that if such Holder converts or
                           redeems shares of Series B-2 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
                           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-2 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-2 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-2 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-2 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

<PAGE>

                           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-2 Preferred Stock. The Company shall return to the status of
         unauthorized and undesignated shares of Preferred Stock each share of
         Series B-2 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-2 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-2 Preferred Stock. The Company
         will not issue any further shares of Series B-2 Preferred Stock. Except
         for redemptions pursuant to Section 6(B), the Company shall have no
         right to redeem the shares of Series B-2 Preferred Stock without the
         consent of a Majority of the Holders.