Document:

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10.6 "Mirror" Loan Agreement with the state of Parana Relating to the
     Paranasan Financing........................................................

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                                                                    EXHIBIT 10.6

                                      DRAFT

                                              SUB-LOAN AGREEMENT FOR FUNDS IN
                                              ACCORDANCE WITH LOAN No. BZ-P13,
                                              BETWEEN JBIC AND THE STATE OF
                                              PARANA EXECUTED HEREWITH BY THE
                                              STATE OF PARANA AND COMPANHIA DE
                                              SANEAMENTO DO PARANA - SANEPAR.

      By and between the STATE OF PARANA, an internal, public legal entity,
hereinafter the STATE or the BORROWER, represented herein by the Governor of the
State Jamie Lerner; assisted by the Secretary of State for Planning, MIGUEL
SALOMAO and by the Secretary of the Treasury, INGO HENRIQUE HUBERT; and,
COMPANHIA DE SANEAMENTO DO PARANA - SANEPAR, a partially state-owned
corporation, Taxpayer Identification No. ________ located at Rua Engenheiros
Reboucas 1376, Bairro Reboucas, Curitiba, hereinafter SANEPAR, represented
herein pursuant to law and the bylaws of the corporation by its President and
Chief Executive Officer, CARLOS AFONSO TEIXEIRA DE FREITAS, and its Chief
Financial Officer, RICARDO DEL GUERRA PERPATUO; and

CONSIDERING that the STATE executed with THE OVERSEAS ECONOMIC CORPORATION FUND
- OECF, JAPAN, formerly known as JAPAN BANK FOR INTERNATIONAL COOPERATION -
JBIC, a bilateral credit institution with its headquarters in Tokyo, Japan,
hereinafter JBIC or the FUND, a LOAN AGREEMENT, attached, in foreign currency,
under No. BZ-P13 and dated January 8, 1998, known as the LOAN AGREEMENT,
regulated by JBIC's General Conditions Applicable to Loan and Guarantee
Agreements, known as GENERAL TERMS AND CONDITIONS, also attached, for financing
of a portion of the Environmental Improvement Project of Parana, hereinafter
known as Project PARANASAN;

CONSIDERING THE ORIGINAL VALUE OF THE LOAN AGREEMENT: Up to the amount of
TWENTY THREE BILLION SIX HUNDRED EIGHTY-SIX MILLION JAPANESE YEN (JPY
23,686,000,000);

CONSIDERING that the above-mentioned external funds are earmarked for
improvement of the water supply system, sewage and management of agro-toxic
waste disposal in order to improve the social environment in the area of
Project PARANASAN, as defined in the LOAN AGREEMENT, to be developed and
implemented in accordance with the goals and objectives set forth in the LOAN
AGREEMENT;

CONSIDERING thus that SANEPAR hereby declares that it is familiar with and
expressly agrees with the terms of the LOAN AGREEMENT and with the GENERAL TERMS
AND CONDITIONS, copies of which, along with their sworn translations, will be an
integral part of this Sub-Loan Agreement, regardless of the transcription; and

CONSIDERING finally, that BANESTADO, in accordance with the LOAN AGREEMENT and
with the bank agreement, signed between BANCO DE ESTADO DO PARANA S/A and THE
BANK OF TOKYO - MITSUBISHI, LTD., dated December 11, 1998, was designated the
DEPOSITORY, on behalf of and to the account and risk of the STATE, with a view
toward carrying out all actions related to this transfer, particularly regarding
transfer and receipt of funds, the parties have agreed to the provisions of the
following Clauses:

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CLAUSE ONE - NATURE, VALUE AND PURPOSE OF CREDIT

Through this Sub-Loan, the STATE will transfer to SANEPAR the funds of the LOAN
AGREEMENT, under the same conditions as the referenced agreement, an amount up
to JPY 15,243,015,847 (fifteen billion two hundred forty-three million fifteen
thousand eight hundred forty-seven Japanese yen), which for informational
purposes only, on this date is equal to BRR ___________ (___________), equal to
the amount disbursed or to be disbursed by JBIC to the STATE OF PARANA as of
January 1, 2002, in accordance with the disbursement procedures or payment
requests made by SANEPAR, to the account of its selected sub-projects and in
accordance with the expense categories and percentages of financing set forth
and listed in the Allocation of Loan Funds below.

Allocation of Loan Funds

             Category              % of expenses to be          Interest Rate
                                        financed

(A) Projects and Construction              65                   4.0% per annum
(B) Consulting Services                   100                   2.3% per annum
(C) Future Expenses                         -                         -

PARAGRAPH ONE - The funds of this Sub-Loan Agreement are to be used exclusively
for systems to supply water and treat sewage in the areas served by SANEPAR as
provided for in the plan.

PARAGRAPH TWO - Future investments to be made in the exclusive service and
interest of the State of Parana are not part of this Sub-Loan agreement with
SANEPAR and are, therefore, excluded from the maximum amount mentioned in Clause
One.

PARAGRAPH THREE - The disbursements to be transferred to SANEPAR, as well as the
payments realized at its request, will be recorded in the currencies and in the
form stipulated in the LOAN AGREEMENT and the GENERAL TERMS AND CONDITIONS.

PARAGRAPH FOUR - The conversion from foreign currency to its equivalent value in
reals will be made in accordance with the rules set forth by Banco Central do
Brasil and agreed to with JBIC, as defined in the LOAN AGREEMENT and the GENERAL
TERMS AND CONDITIONS.

PARAGRAPH FIVE - The STATE may suspend the disbursements stemming from this
instrument if SANEPAR fails to comply with any of the economic-financial
obligations contained in the LOAN AGREEMENT.

CLAUSE TWO - AVAILABILITY

The funds will be placed at the disposal of SANEPAR in installments, as received
by the STATE from JBIC's funds, in accordance with the LOAN AGREEMENT mentioned
in Clause One. The STATE authorizes BANESTADO / ITAU to immediately transfer the
funds of each installment to SANEPAR, which are to be used for local expenses.

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PARAGRAPH ONE - The commitment and disbursement procedures for funds or payment
requests directed to JBIC through the Loan Account will be handled only by the
ParanaSan Management Unit (UGP) of SANEPAR, to be carried out in the manner set
forth in the GENERAL TERMS AND CONDITIONS.

PARAGRAPH TWO - The amount of the disbursements alluded to in the above
paragraph will be transferred to linked account No. 3,770-9, in the name of
SANEPAR, at Agency 4131 of Banco ITAU in the city of Curitiba - PR, at the
request of its legal representatives.

PARAGRAPH THREE - Any delay in the release of funds caused by SANEPAR's
noncompliance with the clauses of the LOAN AGREEMENT and the GENERAL TERMS AND
CONDITIONS will be incumbent on SANEPAR.

CLAUSE THREE - CHARGES

(1)   Interest will accrue quarterly on the amount transferred to SANEPAR
      through this Sub-Loan Agreement at the rate of 4% (four per cent) per
      annum on the principal, corresponding to categories (A), (B) and (C)
      mentioned in Clause One, disbursed, unpaid, and hereinafter known as
      "Principal (I)":

      (i)   Disbursement of principal by means of Loan funds allocated to
            category (A);

      (ii)  Collections for services disbursed by means of the Loan funds,
            related to disbursements of (l) (i) above;

      (iii) Any Principal reallocated from Category (C) and disbursed in
            relation to (1) (i) or (1) (ii) above.

(2)   Interest will accrue quarterly on the amount transferred to SANEPAR
      through this Sub-Loan Agreement at the rate of 2.3% (two point three per
      cent) per annum on the principal, corresponding to categories (A), (B) and
      (C) mentioned in Clause One, disbursed, unpaid, and hereinafter known as
      "Principal (II)":

      (i)   Disbursement of principal by means of the Loan funds allocated to
            category (B);

      (ii)  Expenses for services disbursed by means of the Loan funds, related
            to disbursements of (2) (i) above;

      (iii) Any Principal reallocated from Category (C) and disbursed in
            relation to (2) (i) or (2) (ii) above.

PARAGRAPH ONE - The interest of items I and II of this Clause will be calculated
on the outstanding debt balance of this Sub-Loan Agreement, expressed in the
original currencies of the LOAN AGREEMENT, according to the same criteria
defined therein and according to the provisions of Clause Ten of that
instrument.

PARAGRAPH TWO - SANEPAR will pay to the STATE the interest owed under this
Sub-Loan Agreement on January 20 of each year, calculated up to January 19 of
that year from July 20 of the previous year, and on July 20 of each year the
interest owed up to July 19 from January 20 of that year, except that during the
period of disbursement of the Loan funds, SANEPAR will pay to the STATE on
February 20 of each year the interest owed up to January 19 of that year,
calculated

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from July 20 of the previous year, and on August 20 of each year the interest
owed up to July 19 from January 20 of that year, always calculated on the basis
of the outstanding debt balance owed by SANEPAR, based on the disbursements that
have been transferred to it as of January 1, 2002.

CLAUSE FOUR - SERVICE FEE

SANEPAR will, as of January 1, 2002, assume the burden that was previously the
responsibility of the State of Parana, for a value equal to 0.1% of the value of
the Commitment or Disbursement Letter, in the form of a service fee, on the date
of issue of the respective Commitment Letter or the date of disbursement, on the
amounts transferred through this Sub-Loan Agreement for water supply and waste
treatment in the localities serviced by it.

An amount equal to the service fee will be financed by means of the loan funds
and JBIC will immediately credit this amount to itself, in the form of a service
fee, on the date of issue of the Commitment or Disbursement Letter. This credit,
taken from the loan funds, will constitute a legal and associated obligation by
the Borrower, under the terms and conditions of the LOAN AGREEMENT.

CLAUSE FIVE - AMORTIZATION

Amortization of the principal will be handled initially by the State of Parana
and recorded on the books until it reaches an accumulated total amortized
principal of JPY 8,442,984,153 and this amortization is subject to the terms of
the LOAN AGREEMENT, occurring therefore, from January 20, 2005 to July 20, 2011,
because as of July 20, 2011, SANEPAR will begin to amortize its part of the
outstanding balance of the principal owed (up to JPY 15,243,015,847), which by
this Sub-Loan Agreement will be assumed by it;

The principal of the debt arising from this Sub-Loan Agreement will be paid to
the STATE, beginning July 20, 2011, in 24 (twenty-four) quarterly payments
according to the schedule of payments set forth below, pursuant to current law,
SANEPAR thereby committing itself to pay, along with the last installment, all
outstanding obligations due and for which it is responsible, arising from this
Sub-Loan Agreement:

I - SCHEDULE OF PAYMENTS

I. Payment of Principal (I)

Date Due                                           Amount (in yen)

July 20, 2011                                      430,407,756

Each January 20 and July 20                        530,567,000
     Beginning January 20 of 2012
     Until January 20, 2023.                      Payment of Princinal (II)

Date Due                                           Amount (in yen)

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     July 20, 2001                                 88,905,091

Each January 20 and July 20                        109,594,000
     Beginning January 20 of 2012
     Until January 20, 2023

3. Total of Payments (I) + (II)

Date Due                                           Amount (in yen)

July 20, 2011                                      519,312,847

Each January 20 and July 20                        640,161,000
     Beginning January 20 of 2012
     Until January 20, 2023

II - GENERAL TERMS AND CONDITIONS

Other terms and conditions generally applicable to the LOAN AGREEMENT are set
forth in JBIC's General Terms and Conditions, dated November 1987, with the
following supplementary stipulations (hereinafter GENERAL TERMS AND CONDITIONS):

The term "principal," whenever mentioned in the General Terms and Conditions,
will be replaced by Principal (I) and Principal (II)";

When the borrower repays the principal or pays interest or other obligations,
without specifying the order of application, JBIC may decide the order of
application among the principal, interest and other obligations toward Principal
(I) or Principal (II).

If the payment of principal or payment of interest or other obligations under
the terms of the Loan is in arrears, the interest, specified in Clause Three -
CHARGES, will cease to accumulate on the amount of the principal in arrears on
the due date or thereafter and will incur a late fee, calculated at 1% (one per
cent) per annum on the interest rate stipulated in the LOAN AGREEMENT, to be
paid on the amount of principal, interest or other obligations in arrears,
during the period from the due date until the date immediately preceding the
actual payment, both inclusively.

III - SPECIAL CONDITIONS

In the event of a request by the State of Parana to SANEPAR for purposes of
making investments of its exclusive interest, in accordance with Paragraph Two
of Clause One, amortization of the financed finds allocated for such investments
will be made by the State of Parana in the order of the due date of the
installment payments, now its responsibility, pursuant to Item I of this Clause
(Payment Schedule).

CLAUSE SIX - DELINQUENT INTEREST

The installment owed within this Sub-Loan Agreement having fallen into rears,
whatever the reason may be, the STATE, regardless of judicial or extrajudicial
notice or summons, will collect in the form of delinquent interest 1% (one per
cent) per month on the amount of the installment past due, in addition to other
finance charges to which SANEPAR is subject.

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CLAUSE SEVEN - PENALTIES

If the STATE must resort to judicial means in order to collect or settle the
amounts owed under this Sub-Loan Agreement, SANEPAR, being unable to reduce the
amounts stipulated in this Agreement, will pay, in addition to the principal,
finance charges and other contractual expenses, a penalty of 10% (ten per cent)
on the entire amount owed, including, moreover, judicial and extrajudicial costs
as well as legal fees on a base of 10% (ten per cent).

CLAUSE EIGHT - MONETARY EXPRESSION OF THE AMOUNT OF THE DEBT

The outstanding debt balance under this Sub-Loan Agreement, including principal,
compensatory and late interest, expenses, commissions and other charges, will be
expressed according to the provisions of the LOAN AGREEMENT, referred to in
Clause One of this instrument, and of the GENERAL TERMS AND CONDITIONS, which
comprise the terms referred to, with which SANEPAR is familiar and in full
agreement.

CLAUSE NINE - SPECIAL OBLIGATIONS OF THE BENEFICIARY

Until total settlement of all obligations for which it is responsible pursuant
to this Sub-Loan Agreement, SANEPAR commits to:

(a)   Maintain records in combined or separate accounts, that reflect, in
      accordance with appropriate and consistently applied accounting practices,
      its financial transactions with reference to the execution of sit-projects
      and disbursements of funds under this instrument, as well as prepare
      financial statements that will be audited in each respective fiscal year
      by independent auditors;

(b)   Include in its schedule of expenses for each financial year, beginning
      with the year in which the signing of this Sub-Loan Agreement takes place,
      including and until final settlement of all obligations assumed in it, the
      amounts necessary for payment of the principal, charges and expenses
      arising from this transaction;

(c)   Satisfy all other obligations that have been expressly set forth by JBIC
      or the STATE for the execution of PARANASAN and for the extension of
      credit, particularly those involving acquisition and commitment procedures
      of the LOAN AGREEMENT.

CLAUSE TEN - ALTERATIONS

The clauses of this Sub-Loan Agreement may only be altered by amendment and by
mutual agreement of the parties, in accordance with the conditions of the LOAN
AGREEMENT.

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CLAUSE ELEVEN - COURT

With regard to the settlement of any questions involving the execution of this
Sub-Loan Agreement that cannot be resolved through administrative mediation, the
Court of the City of Curitiba, capital of the State of Parana, has jurisdiction.

Therefore, having so agreed, the parties sign 3 (three) copies of this
Agreement, each of the same tenor and form for legal purposes, in the presence
of the undersigned witnesses.

                            Curitiba, January     , 2002

                                 STATE OF PARANA
                                  JAIME LERNER
                                    GOVERNOR

MIGUEL SALOMAO                            INGO HENRIQUE HUBERT
SECRETARY OF STATE                        SECRETARY OF THE TREASURY
FOR PLANNING

                        CARLOS AFONSO TEIXEIRA DE FREITAS
                PRESIDENT AND CHIEF EXECUTIVE OFF1CER OF SANEPAR

RICARDO DEL GUERRA PERPETUO               JOSE LUIZ COSTA TABORDA RAUEN
CHIEF FINANCIAL OFFICER OF                ATTORNEY FOR SANEPAR
SANEPAR

WITNESSES:

--------------------------------------    --------------------------------------
Name/CPF (Taxpayer ID]                    Name/CPF (Taxpayer ID]

                                                                               7<PAGE>
                                                                     EXHIBIT 4.1

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

                            CERTIFICATE OF RESOLUTION

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

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

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

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

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

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

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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.

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         "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

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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

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