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                                                                     EXHIBIT 4.2

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

                            CERTIFICATE OF RESOLUTION

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

         3. Dividends and Distributions.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

         6. Conversion and Redemption.

                  (A)      Procedure for Conversion.

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

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

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

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

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

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

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

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

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

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

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

         (B)      Procedure for Redemption.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

         (F)      Business Combinations.

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

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

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

                                       18
<PAGE>

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

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

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

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

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

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

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

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

                                       21<PAGE>
                                                                     EXHIBIT 4.3

                           CHAMPION ENTERPRISES, INC.

                               WARRANT CERTIFICATE

                            DATED AS OF APRIL 2, 2002

<PAGE>

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

                               WARRANT CERTIFICATE

                           CHAMPION ENTERPRISES, INC.

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

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

1.       Exercise of Warrant.

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

<PAGE>

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

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

                           Where:

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

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

                           Y = the Stock Purchase Price;

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

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

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

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

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

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

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

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

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

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

                                       3
<PAGE>

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

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

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

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

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

2.       Adjustment of Common Stock Issuable Upon Exercise.

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

                                       4
<PAGE>
              2.2     Adjustment of Warrant Price.

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

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

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

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

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

                                       5
<PAGE>

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

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

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

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

                                       6
<PAGE>

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

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

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

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

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

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

                                       7
<PAGE>

         2.5 Computation of Consideration.

         For the purposes of this Section 2:

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

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

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

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

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

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

         by

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

                                       8
<PAGE>

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

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

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

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

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

3.       Business Combinations.

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

                                       9
<PAGE>

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

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

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

                                       10
<PAGE>

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

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

4.       Other Dilutive Events, Restatements.

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

                                       11
<PAGE>

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

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

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

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

                                       12
<PAGE>

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

7.       Notices of Corporate Action.

         In the event of:

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

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

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

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

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

                                       13
<PAGE>

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

9.       Transfer and Assignment.

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

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

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

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

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

                                       14
<PAGE>

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

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

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

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

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

                                       15
<PAGE>

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

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

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

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

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

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

                                       16
<PAGE>

         12.9 "Excluded Securities" means each of the following:

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

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

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

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

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

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

                                       17
<PAGE>

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

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

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

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

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

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

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

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

                                       18
<PAGE>

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

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

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

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

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

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

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

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

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

                                       19
<PAGE>

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

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

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

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

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

                  [REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]

                                       20
<PAGE>

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

Dated:  April 2, 2002          CHAMPION ENTERPRISES, INC.

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

<PAGE>

                                                                       EXHIBIT 1

                        [FORM OF WARRANT EXERCISE NOTICE]

                  (To Be Executed Upon Exercise Of the Warrant)

                                     [DATE]

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

                  Re:      Warrant No. W-[  ]
                           __________________

Ladies and Gentlemen:

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

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

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

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

______________________

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

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

<PAGE>

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

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

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

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

CHAMPION ENTERPRISES, INC.

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

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

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

                                   2
<PAGE>

                                                                       EXHIBIT 2

                   [FORM OF WARRANT EXERCISE DELIVERY NOTICE]

                                     [Date]

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

Ladies and Gentlemen:

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

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

                            [TO COME]

                            with a copy to:

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

<PAGE>

                                     CHAMPION ENTERPRISES, INC.

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

                                       2

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