WAIVER AND FORBEARANCE AGREEMENT

Exhibit 10.1

WAIVER AND FORBEARANCE AGREEMENT

     THIS WAIVER AND FORBEARANCE AGREEMENT (this “ Agreement ”) to the Credit Agreement (as defined below), dated as of October 5, 2009, is entered into among CHAMPION HOME BUILDERS CO., a Michigan corporation (the “ Borrower ”), CHAMPION ENTERPRISES, INC., a Michigan corporation (the “ Parent ”), certain of the Lenders (such capitalized term and other capitalized terms used in this preamble and the recitals below to have the meanings set forth in, or are defined by reference in Article I below), CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as the Administrative Agent (in such capacity, the “ Administrative Agent ”), and, solely for purposes of Articles VI and VII , each Obligor signatory hereto.

WITNESSETH :

     WHEREAS, the Borrower, the Parent, the Lenders and the Administrative Agent are all parties to the Amended and Restated Credit Agreement, dated as of April 7, 2006 (as amended or otherwise modified prior to the date hereof, the “ Credit Agreement ”);

     WHEREAS, the Borrower has requested that the Lenders waive certain provisions of the Credit Agreement;

     WHEREAS, the Borrower has also informed the Lenders and the Administrative Agent that Events of Default have occurred under Section 9.1.1 of the Credit Agreement by reason of the Borrower’s failure to pay principal installments of the Loans, as well as interest with respect to the Loans and Letter of Credit fees and Commitment Fees due with respect to the applicable payment dates as of the end of September 2009 (the “ Specified Events of Default ”), and as a result of the failure by the Borrower to be in compliance with such requirements of the Credit Agreement, the Lenders and the Administrative Agent are entitled to exercise at any time all of their rights and remedies and to commence enforcement and collection actions under the Credit Agreement, the other Loan Documents and applicable law;

     WHEREAS, the Borrower has requested that the Required Lenders agree, in lieu of immediately exercising such rights and remedies and commencing such actions, to implement a forbearance period during which, among other things, the Borrower would be afforded an opportunity to formulate and propose a comprehensive restructuring with respect to its Obligations; and

     WHEREAS, the Required Lenders have agreed to the requested waiver and forbearance, but only upon the terms and subject to the conditions expressly set forth in this Agreement, and without any advance understanding or agreement by the Required Lenders or any Lender or the Administrative Agent to consent to, or grant a waiver to permit, the implementation of any restructuring proposal or the consummation of any transaction for which such consent or waiver would be required under the Credit Agreement or the other Loan Documents (including without limitation, this Agreement);

     NOW THEREFORE, in consideration of the premises and for other good and valuable consideration the receipt of which is hereby acknowledged, the parties hereto hereby covenant and agree as follows:

ARTICLE I

DEFINITIONS

     SECTION 1.1. Certain Definitions . The following terms when used in this Agreement shall have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof):

     “ Agreement ” is defined in the preamble .

     “ Borrower ” is defined in the preamble .

     “ Credit Agreement ” is defined in the first recital .

     “ Effective Date ” is defined in Article IV .

     “ Enforcement Actions ” means, collectively, all of the rights, remedies, enforcement actions and collection actions that the Lenders and/or the Administrative Agent are entitled to exercise under the Credit Agreement (including, without limitation, under Sections 9.2 and 9.3 thereof) or the other Loan Documents or applicable law (including directing the Collateral Trustee to take any of such actions).

     “ Forbearance Period ” means the period from and including the Effective Date to and including the expiration time on the Forbearance Period Termination Date.

     “ Forbearance Period Termination Date ” means the first to occur of (a) 2:00 p.m., New York time, on October 30, 2009, (b) the moment any representation or warranty made by any Obligor in this Agreement shall prove to have been untrue, inaccurate or incomplete in any material respect on or as of the date made or deemed made, (c) the moment any Obligor shall fail in any material respect to perform, as and when required, any of their respective covenants or other obligations set forth in this Agreement, (d) the moment any Obligor shall take any action to challenge (including without limitation, to assert in writing any challenge to) the validity or enforceability of this Agreement, the Credit Agreement or any other Loan Documents or any provision hereof or thereof and (e) the moment any Default or Event of Default other than a Specified Events of Default shall occur and be continuing.

     “ Lender Party ” means each Lender, the Administrative Agent, the Collateral Trustee and any Issuer, and each of their respective present or former subsidiaries, affiliates, advisors, employees, attorneys, agents, officers, directors and representatives and their respective predecessors, successors, transferees and assigns.

     “ Specified Events of Default ” is defined in the second recital .

     SECTION 1.2. Other Definitions . Terms for which meanings are provided in the Credit Agreement are, unless otherwise defined herein or the context otherwise requires, used in this Agreement with such meanings.

ARTICLE II

LIMITED WAIVER TO CREDIT AGREEMENT

     Subject to the occurrence of the Effective Date, certain limited provisions of the Credit Agreement are hereby waived in accordance with this Article II. Except as expressly so waived in this Article II, the Credit Agreement shall continue in full force and effect.

     SECTION 2.1. Limited Waivers as to Section 8.4(d) and (e) . The Required Lenders hereby waive, until 2:00 p.m., New York time, on October 30, 2009, the requirement that the Parent and the Borrower comply with the provisions of Sections 8.4(d) and 8.4(e) of the Credit Agreement for the second and third Fiscal Quarters of 2009.

ARTICLE III

SPECIFIED EVENTS OF DEFAULT, FORBEARANCE
AND LIMITATION ON PERMITTED ACTIONS

     SECTION 3.1. Specified Events of Default . Each Obligor acknowledges and agrees that (a) the Specified Events of Default have occurred and continue to exist as of the Effective Date, and (b) absent the agreement of the Required Lenders to forbear from taking Enforcement Actions, the occurrence and continuance of the Specified Events of Default entitles the Administrative Agent, the Collateral Trustee and/or the Lenders to at any time take Enforcement Actions.

     SECTION 3.2. Forbearance Period . Subject to the terms and conditions of this Agreement, the Lenders and the Administrative Agent agree to forbear from taking any Enforcement Action as a result of the occurrence and continuance of the Specified Events of Default, during the period from and including the Effective Date until the Forbearance Period Termination Date; provided , however , that the foregoing shall not limit any action taken by the Administrative Agent, the Collateral Trustee or the Lenders to perfect, maintain or defend the Lien of the Collateral Trustee and the Secured Parties in the Collateral (as defined in the Pledge and Security Agreement) against claims of third parties or any Obligor.

     SECTION 3.3. No Waiver; Limitation on Forbearance; Limitation on Permitted Actions under Credit Agreement and on Other Actions . Each Obligor acknowledges and agrees that, notwithstanding the agreement of the Lenders and the Administrative Agent to forbear from taking Enforcement Actions during the Forbearance Period in respect of the Specified Events of Default, (a) such forbearance shall not constitute a waiver of the occurrence or the continuance of any Event of Default, and each such Event of Default which has occurred shall continue to exist after the Effective Date unless and until cured or waived by the Required Lenders (with the Administrative Agent and the Lenders expressly reserving the right to exercise any and all rights and remedies after termination of the Forbearance Period), (b) nothing contained in this

Agreement shall be construed to limit or affect the right of any Lender Party to bring or maintain during the Forbearance Period any action to enforce or interpret any provision of this Agreement, or to file or record instruments of public record (or take other action) to perfect or further protect the liens and security interests granted by the Obligors to the Lender Parties, (c) the Borrower’s right to obtain Borrowings pursuant to Article II of the Credit Agreement is suspended (except the Borrower shall be permitted to continue Loans, or convert Loans into, LIBO Rate Loans with an Interest Period of one month), and (d) no bonuses or retention payments shall be paid to employees (other than those with respect to which the Obligors are obligated to make payment under the Obligors’ management incentive compensation bonus plans in effect prior to October 1, 2009 for their plant and Star Fleet operations in an amount not to exceed $700,000) and no transfers of cash or other assets shall be made (including payments to vendors) outside the ordinary course of business consistent with past practice.

     SECTION 3.4. Enforcement Actions After Forbearance Period . Each Obligor acknowledges and agrees that, on the Forbearance Period Termination Date, the agreement of the Lenders and the Administrative Agent to forbear from taking any Enforcement Action in respect of the Specified Events of Default shall cease and be of no further force or effect, and the Lender Parties