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                                                                    EXHIBIT 10.6



STATE OF NORTH CAROLINA
                                                            SEPARATION AGREEMENT
COUNTY OF MECKLENBURG


         THIS SEPARATION AGREEMENT (this "Agreement") is entered into as of the
30th day of November, 2001 (the "Date of this Agreement") by and between OAKWOOD
HOMES CORPORATION, a North Carolina corporation (the "Company"), and DUANE D.
DAGGETT ("Employee").

                              STATEMENT OF PURPOSE

         Employee was employed by the Company in the position of Chief Executive
Officer until July 24, 2001. From July 24, 2001 through November 30, 2001, the
Company continued to employ Employee to allow for orderly transition of his
duties and responsibilities. During such period of continued employment,
Employee devoted his best efforts to the performance of such duties as were
directed by the successor Chief Executive Officer, the Chairman of the Board of
Directors or their designees.

         The parties hereto wish to terminate their relationship under the terms
and conditions set forth in this Agreement.

         NOW, THEREFORE, in consideration of the Statement of Purpose and the
terms and provisions of this Agreement, the parties hereto mutually agree as
follows:

         1.       RESIGNATION FROM EMPLOYMENT. Employee hereby confirms his
resignation, effective as of November 30, 2001, from his employment with the
Company and from all offices, committees and positions he held with the Company
and any affiliated and associated companies and entities (collectively,
"Affiliates"), other than as a member of the Company's Board of Directors and as
a member of its Executive Committee. If requested by the Company, Employee will
execute any additional resignation letters, forms or other documents which
acknowledge his resignation from such employment, positions, committees and
offices.

         2.       PAYMENTS BY THE COMPANY.

                  (a)      The parties acknowledge and agree that the Company
has paid or provided Employee with all compensation and benefits (excluding
bonus but including reimbursement of customary business expenses, pursuant to
applicable Company policies) to which Employee was otherwise entitled as an
employee of the Company, at Employee's then-current rate and status, through
November 30, 2001, including any accrued but unpaid vacation pay, in accordance
with the Company's generally applicable policies and procedures. Employee agrees
that he is not entitled to receive, and will not receive, any additional
compensation or benefits of any kind from the Company, except as expressly set
forth in this Agreement.

                  (b)      As payment for Employee's bonus for the fiscal year
ended September 30, 2001 and as a special separation benefit, the Company agrees
to pay Employee a lump sum cash payment (the "Separation Payment") in the amount
of $500,000 payable on January 2, 2002. The parties acknowledge

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and agree that the Separation Payment constitutes a special separation benefit
to which Employee would not otherwise be entitled absent this Agreement.

                  (c)      From the date of Employee's termination of employment
until December 31, 2004, the Company shall continue to provide Employee with
health care coverage for Employee. Employee acknowledges that such coverage
shall be secondary to Medicare. The Company in its discretion may elect to
provide such coverage through any fully insured product it may select, in which
case Employee shall cooperate with the Company as reasonably necessary for the
Company to obtain such coverage. Employee acknowledges that such coverage shall
be in lieu of any continuation coverage otherwise required by the "COBRA"
provision of federal law.

                  (d)      The parties acknowledge that the Company has
maintained and paid applicable premiums on a term life insurance policy for
Employee, providing life insurance coverage on Employee's behalf in the amount
of $300,000. The Company agrees to continue to pay the applicable premiums on
the life insurance policy as necessary to keep it in effect from the Effective
Date of this Agreement through December 31, 2004.

                  (e)      Employee and the Company hereby agree that all stock
options, stock appreciation rights (SAR's) and any other equity-linked benefits
granted to Employee prior to the Date of this Agreement (including without
limitation stock options to purchase shares of the Company's common stock in the
amounts of 24,000 shares and 12,000 shares at per share exercise prices of $3.15
and $7.05, respectively, and an SAR granted at $15.94 per share with respect to
5,000 shares of the Company's common stock (as adjusted in each case for the
one-for-five reverse stock split effected in June 2001)) are hereby cancelled
and terminated in all respects; and in lieu thereof the Company agrees to pay
Employee the cash amounts calculated as follows:

                           (i)      24,000 shares multiplied by the excess, if
any, of the Average Market Value (as defined below) over $3.15 per share, with
such Average Market Value determined as of December 31, 2004 (the "12/31/04
Market Value").

                           (ii)     12,000 shares multiplied by the excess, if
any, of the 12/31/04 Market Value over $7.05 per share.

                           (iii)    5,000 shares multiplied by the excess, if
any, of the Average Market Value over $15.94 per share, with such Average Market
Value determined as of July 31, 2002.

                           (iv)     For purposes of calculating and paying the
amounts due under subparagraphs (i) - (iii) above, Average Market Value shall
mean the average Fair Market Value (as defined in the Company's Key Employee
Stock Plan) calculated for the 15 trading days ending on and including the
respective determination date, and payment of each such amount shall be made
within 30 calendar days of the respective determination date therefor. The right
to payment provided in this Paragraph (e) may not be transferred, pledged or
assigned other than by will or by the laws of descent and distribution. In the
event of a stock split, stock dividend or a combination of the outstanding
shares of the Company's common stock, appropriate adjustments shall be made to
the share numbers and per share prices specified in subparagraphs (i) - (iii)
above. In the event of a sale of substantially all of the assets of the Company,
a merger or consolidation of the Company or a transaction that would result in
the Company's common stock no longer being registered under the Securities
Exchange Act of 1934, the rights to payment under subparagraphs (i) - (iii)
shall be treated on a basis comparable to the basis on

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which stock options and stock appreciation rights then held by the Company's
senior executives are treated in such transaction.

         3.       EMPLOYMENT TAXES AND WITHHOLDINGS. Employee acknowledges and
agrees that the Company shall withhold from the payments and benefits described
in this Agreement all taxes, including income and employment taxes, required to
be so deducted or withheld under applicable law.

         4.       RELEASE OF THE COMPANY. Employee, on behalf of himself and his
heirs, personal representatives, successors and assigns, hereby releases and
forever discharges the Company and its Affiliates, each and every one of their
respective present and former shareholders, directors, officers, members,
employees, agents, successors and assigns, of and from any and all claims,
demands, actions, causes of action, damages, costs and expenses which Employee
now has or may have by reason of any thing occurring, done or omitted to be done
as of or prior to the Date of this Agreement, including, but not limited to, (i)
any and all claims related to his employment with the Company and the
termination of same, (ii) any and all claims for additional compensation, bonus
or benefits other than the compensation and benefits set forth in this Agreement
and (iii) any and all claims relating to employment practices or policies of the
Company; provided, however, this release shall not apply to any claims which
Employee may have for the payments or benefits expressly provided for Employee
or otherwise specifically contemplated in this Agreement to be paid or provided
to Employee.

         5.       PROVISIONS RELATING TO ADEA RELEASE. Employee represents to
Company that he is aware, understands and agrees that:

                  (a)      he is voluntarily entering into and signing this
Agreement;

                  (b)      the claims waived, released and discharged in
Paragraph 4 of this Agreement include any and all claims Employee has or may
have arising out of or related to his employment with Company and the
termination of that employment, including any and all claims under the Age
Discrimination in Employment Act (the "ADEA");

                  (c)      those claims waived, released and discharged in
Paragraph 4 do not include, and Employee is not waiving, releasing or
discharging, any claims that may arise after the Date of this Agreement;

                  (d)      the payments and benefits (including but not limited
to the Separation Payment) provided or to be provided Employee pursuant to the
provisions of Paragraph 2 above constitute consideration that Employee was not
entitled to receive before the Date of this Agreement;

                  (e)      Employee was given twenty-one (21) days within which
to consider this Agreement;

                  (f)      Employee had and has the right to consult with an
attorney regarding this Agreement before the Date of this Agreement;

                  (g)      Employee may revoke this Agreement at any time within
seven (7) days after the day he signs this Agreement (that is, at any time
within seven (7) days after the Date of this Agreement), and this document will
not become effective or enforceable until the eighth day after the Date of this
Agreement (the "Effective Date of this Agreement"), on which day this Agreement
will automatically become effective and enforceable unless previously revoked
within that seven-day period; and

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                  (h)      EMPLOYEE HAS CAREFULLY READ THIS DOCUMENT, AND FULLY
UNDERSTANDS EACH AND EVERY TERM.

         7.       APPLICABLE LAW. This Agreement is made and executed with the
intention that the construction, interpretation and validity hereof shall be
determined in accordance with and governed by the laws of the State of North
Carolina.

         8.       BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the Company, its successors and assigns. This Agreement shall
be binding upon and inure to the benefit of Employee, his heirs, executors and
administrators.

         9.       ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes and cancels all prior or contemporaneous oral or written agreements
and understandings between them with respect to the subject matter hereof.

         IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by its duly authorized officer and Employee has hereunto set his hand and seal,
all as of the day and year first above written.


                                     OAKWOOD HOMES CORPORATION


                                     By:   /s/ Myles E. Standish
                                           ------------------------------
                                           Name:  Myles E. Standish
                                           Title: Chief Executive Officer



                                     EMPLOYEE

                                     /s/ Duane D. Daggett                 [SEAL]
                                     -------------------------------------
                                     Duane D. Daggett