On October 31, 2005, Champion Enterprises, Inc., a Michigan corporation (the “Company”), and its subsidiary Champion Home Builders Co., a Michigan corporation (“Champion Home Builders”), entered into a Credit Agreement (the “Credit Agreement”), dated as of October 31, 2005, with Champion Home Builders, as the borrower, the Company, as the parent, various financial institutions and other parties thereto, as lenders, and Credit Suisse, Cayman Islands Branch (“Credit Suisse”), as administrative agent. The Credit Agreement provides a credit facility that replaces Champion Home Builders’ 11.25% Senior Notes due 2007 (the “2007 Notes”) and its previous revolving credit facility. The Credit Agreement represents a new $200 million senior secured credit facility, comprised of a $100 million term loan, a revolving line of credit in the amount of $40 million, and a synthetic letter of credit facility under which Champion Home Builders may obtain up to $60 million of letters of credit.

Also on October 31, 2005, Champion Home Builders completed its previously announced tender offer and consent solicitation for its 2007 Notes, pursuant to which $82.43 million principal amount of 2007 Notes, representing approximately 93.2% of the outstanding 2007 Notes, were tendered. The remaining $6 million of 2007 Notes are expected to be redeemed via provisions in the 2007 Note indenture during the fourth quarter. Funding for the tender offer and consent solicitation, as well as the redemption of the remaining 2007 Notes, was provided by the proceeds of the new $100 million term loan.

The interest rate for borrowings under the term loan is currently a LIBOR based rate plus 250 basis points. The maturity date for each of the term loan, the revolving line of credit and the synthetic letter of credit facility is October 31, 2012, unless as of February 3, 2009, more than $25 million in aggregate principal amount of the Company’s 7.625% Senior Notes due 2009 are outstanding, then the maturity date will be February 3, 2009.

The Credit Agreement is secured by a first security interest in substantially all of the assets of Champion Home Builders. In addition, the Company’s 7.625% Senior Notes due 2009 were secured equally and ratably with the Credit Agreement obligations.

The Credit Agreement contains affirmative and negative covenants typical for facilities of this type. Under the Credit Agreement, the Company is required to maintain a maximum Leverage Ratio (as defined below) of no more than 4.00 to 1, for the fourth fiscal quarter of 2005 and the first and second fiscal quarters of 2006, 3.5 to 1 for the third and fourth fiscal quarters of 2006, 3.25 to 1 for the first, second and third fiscal quarters of 2007, 3.00 to 1 for the fourth fiscal quarter of 2007, and 2.75 to 1 thereafter. The Leverage Ratio is the ratio of Total Debt (as defined) of the Company on the last day of a fiscal quarter to its consolidated EBITDA (as defined) for the four quarter period then ended.

The Company is also required to maintain a minimum Interest Coverage Ratio (as defined below) of not less than 3.00 to 1. The Interest Coverage Ratio is the ratio of the Company’s consolidated EBITDA for the four quarter period then ended to its Cash Interest Expense (as defined) over the same four quarter period.

Other than the Credit Agreement, there are no material relationships between Credit Suisse or the lenders under the Credit Agreement and the Company or any of their respective affiliates, other than as follows: (i) the Company and its affiliates may have