Asset Purchase Agreement - Champion Motor Coach Inc. and Thor Industries Inc.

                                                                  Execution Copy






                            ASSET PURCHASE AGREEMENT

                                 by and between

                           CHAMPION MOTOR COACH, INC.
                             a Michigan corporation,


                                       and

                              THOR INDUSTRIES, INC.
                             a Delaware corporation,





                            Dated: December 23, 1997





                                                              Page 6 of 44 Pages

                            ASSET PURCHASE AGREEMENT

                                TABLE OF CONTENTS
                                -----------------

                                                                            Page
                                                                            ----

ARTICLE 1.           SALE OF PURCHASED ASSETS; PURCHASE PRICE; CLOSING.....  1

         1.1.        Purchase and Sale of Assets...........................  1
         1.2.        Purchased Assets; Excluded Assets.....................  1
         1.3.        Liabilities of Seller.................................  4
         1.4.        Purchase Price; Allocation............................  6
         1.5.        Closing...............................................  9
         1.6.        Further Assurances, Post-Closing Cooperation..........  9

ARTICLE 2.           REPRESENTATIONS AND WARRANTIES OF SELLER.............. 10
         2.1.        Corporate Existence................................... 10
         2.2.        Authority............................................. 10
         2.3.        Consents and Approvals; No Violation.................. 10
         2.4.        Legal Proceedings..................................... 10
         2.5.        Tax Matters........................................... 11
         2.6.        Title to Property..................................... 11
         2.7.        Brokers............................................... 11
         2.8.        Financial Statement................................... 11
         2.9.        Contracts and Commitments............................. 11
         2.10.       Real Property......................................... 12
         2.11.       Litigation............................................ 12
         2.12.       Compliance with Laws.................................. 12
         2.13.       Inventory............................................. 12
         2.14.       Employees............................................. 12
         2.15.       Product Liability..................................... 13
         2.16.       Warranties and Service Practices...................... 14

ARTICLE 3.           REPRESENTATIONS AND WARRANTIES OF PURCHASER........... 14

         3.1.        Corporate Existence................................... 14
         3.2.        Authority............................................. 14
         3.3.        No Conflicts.......................................... 14
         3.4.        Legal Proceeding...................................... 14
         3.5.        Brokers............................................... 15
         3.6.        Due Diligence......................................... 15


                                       -i-


                                                              Page 7 of 44 Pages

                                                                            Page
                                                                            ----

ARTICLE 4.           COVENANTS OF SELLER................................... 15

         4.1.        HSR Act............................................... 15
         4.2.        Fulfillment of Conditions............................. 15
         4.3.        Conduct of Business................................... 15
         4.4.        Non-Competition Agreements............................ 16
         4.5.        License Agreement..................................... 16
         4.6.        Access to Information................................. 16

ARTICLE 5.           COVENANTS OF PURCHASER................................ 16

         5.1.        HSR Act............................................... 16
         5.2.        Fulfillment of Conditions............................. 16
         5.3.        Payment and Performance Bonds; Third Party Releases... 16

ARTICLE 6.           CONDITIONS TO OBLIGATIONS OF PURCHASER................ 17

         6.1.        Representations and Warranties........................ 17
         6.2.        Performance........................................... 17
         6.3.        Officers' Certificate................................. 17
         6.4.        HSR Act............................................... 17
         6.5.        MESC Contribution Liability........................... 17
         6.6.        Deliveries............................................ 17
         6.7.        Title Insurance....................................... 17
         6.8.        No Material Adverse Effect............................ 17
         6.9.        Consent............................................... 18

ARTICLE 7.           CONDITIONS TO OBLIGATIONS OF SELLER................... 18

         7.1.        Representations and Warranties........................ 18
         7.2.        Performance........................................... 18
         7.3.        Officers' Certificate................................. 18
         7.4.        HSR Act............................................... 18
         7.6.        Consent............................................... 18

ARTICLE 8.           EMPLOYEE MATTERS...................................... 19

         8.1.        Employees of the Business; Termination................ 19
         8.2.        Employment Claims..................................... 19
         8.3.        Worker's Compensation Claims and Worker's 
                     Occupational Diseases Claim........................... 20
         8.4.        Severance............................................. 20
         8.5.        Other Agreements, Plans, Understandings and 
                     Practice.............................................. 20
         8.6.        Termination or Layoffs................................ 20


                                      -ii-



                                                              Page 8 of 44 Pages

                                                                            Page
                                                                            ----
ARTICLE 9.           TERMINATION OF AGREEMENT.............................. 21

         9.1.        Events of Termination................................. 21
         9.2.        Effect of Termination................................. 21

ARTICLE 10.          SURVIVAL; NO OTHER REPRESENTATIONS;
                     INDEMNIFICATION....................................... 21

         10.1.       Survival.............................................. 21
         10.2.       Indemnification....................................... 22
         10.3.       Limitations on Seller's Indemnification............... 22
         10.4.       Notice of Indemnification Claim....................... 22
         10.5.       Third Party Claims.................................... 22
         10.6.       Other Indemnification Claims.......................... 23
         10.7.       Reimbursement......................................... 23
         10.8.       No Other Representations; Limitations on Breach of 
                     Representations and Warranties........................ 24
         10.9.       Limited Guaranty...................................... 24

ARTICLE 11.          DEFINITIONS........................................... 24

         11.1.       Definitions........................................... 24

ARTICLE 12.          MISCELLANEOUS......................................... 29

         12.1.       Notices............................................... 29
         12.2.       Bulk Sales Act........................................ 30
         12.3.       Entire Agreement...................................... 30
         12.4.       Expenses.............................................. 30
         12.5.       Waiver................................................ 30
         12.6.       Amendment............................................. 30
         12.7.       No Third Party Beneficiary............................ 30
         12.8.       No Assignment Binding Effect.......................... 31
         12.9.       Heading............................................... 31
         12.10.      Invalid Provisions.................................... 31
         12.11.      Governing Law......................................... 31
         12.12.      Schedules and Exhibits................................ 31
         12.13.      Counterparts.......................................... 31
         12.14.      Public Announcements: Confidentiality................. 31
         12.15.      Name of Seller........................................ 32




                                      -iii-



                                                              Page 9 of 44 Pages

                                    SCHEDULES
                                    ---------

                                                                         Page
                                                                         ----

Schedule 1.2(a)(iv)                                                        2
Schedule 1.2(a)(v)                                                         2
Schedule 1.2(a)(vi)                                                        2
Schedule 1.3(a)(v)                                                         5
Schedule 1.4(e)                                                            8
Schedule 2.3                                                               10
Schedule 2.4                                                               10
Schedule 2.6                                                               11
Schedule 2.11                                                              12
Schedule 2.14(a)                                                           13
Schedule 2.14(b)                                                           13
Schedule 2.14(c)                                                           13
Schedule 2.16                                                              14
Schedule 5.3                                                               16
Schedule 6.9                                                               18
Schedule 8.4                                                               20
Schedule 11.1(a)-1                                                         27
Schedule 11.1(a)-2                                                         27



                                    EXHIBITS

                                                                          Page
                                                                          ----
Exhibit 1.5(a)                                                             9
Exhibit 1.5(b)                                                             9
Exhibit 1.5(c)                                                             9
Exhibit 2.8                                                                11
Exhibit 4.4                                                                16
Exhibit 4.5                                                                16
Exhibit 6.3                                                                17
Exhibit 7.3                                                                18
Exhibit 10.9                                                               24


                                       iv


                                                             Page 10 of 44 Pages

                                                                  Execution Copy



                            ASSET PURCHASE AGREEMENT
                            -------------------------


          THIS ASSET PURCHASE AGREEMENT (this  "Agreement"),  dated December 23,
1997,  is made and entered into by and between  CHAMPION  MOTOR  COACH,  INC., a
Michigan  corporation  ("Seller"),   and  THOR  INDUSTRIES,   INC.,  a  Delaware
corporation ("Purchaser").

                                   WITNESSETH:
                                   -----------

          WHEREAS,   Seller  is   engaged   in  the   business   of   designing,
manufacturing, marketing and selling mid-size buses (the "Business"); and

          WHEREAS, Seller desires to sell, transfer and assign to Purchaser, and
Purchaser desires to purchase and acquire from Seller, the Business, and certain
of the assets,  properties and rights of the Business,  subject to the terms and
conditions set forth in this Agreement.

          NOW,   THEREFORE,   in  consideration  of  the  mutual  covenants  and
agreements set forth herein, and for other good and valuable consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereto
agree as follows:


                                   ARTICLE 1.

                            SALE OF PURCHASED ASSETS;
                            -------------------------
                             PURCHASE PRICE; CLOSING
                             -----------------------
 
          1.1. Purchase and Sale of Assets.  At the Closing,  Seller shall sell,
               ---------------------------
transfer,  convey, assign and deliver to the Purchaser,  and the Purchaser shall
purchase,  pay for, accept, assume and receive the Purchased Assets described in
Section 1.2(a)  hereof,  on and subject to the terms and conditions set forth in
this Agreement.

          1.2. Purchased Assets; Excluded Assets.
               ---------------------------------

          (a)  Purchased  Assets.  The assets  and  properties  to be  purchased
               -----------------
hereunder  by  Purchaser  shall mean and  include,  as they exist on the Closing
Date,  all of the  Business and goodwill of the Seller and all of the assets and
properties  (other than the Excluded  Assets)  owned by,  leased to or otherwise
used  by the  Seller  in  the  conduct  of the  Business,  whether  tangible  or
intangible,  wherever located (the "Purchased Assets"), it being understood that
the Purchased Assets include,  and as of the Closing Date shall include,  all of
the assets  necessary  for the conduct by Buyer of the Business as it is now and
on the Closing  Date shall be  conducted  by the Seller.  Without  limiting  the
generality of the foregoing, the Purchased Assets shall include:




                                                             Page 11 of 44 Pages


               (i)  Accounts Receivable. All trade and other accounts receivable
                    -------------------
and prepaid expenses of the Business (collectively, the "Accounts Receivable");

               (ii) Inventory.  All inventories,  including Seller's interest in
                    ---------
consignment  inventory,  of  raw  materials,  work-in-process,  finished  goods,
supplies, parts, packaging materials and other accessories related thereto which
are used or held for use by Seller in the conduct of the Business (collectively,
the "Inventory"), but not the Excluded Inventory as hereafter defined;

               (iii)Intellectual  Property.  All Intellectual  Property, but not
                    ----------------------
the Excluded Intellectual Property as hereafter defined;

               (iv) Tangible  Personal   Property.   All  furniture,   fixtures,
                    -----------------------------
machinery and equipment and other  tangible  personal  property  (other than the
Inventory,  personal  effects  and the  personal  property  listed  on  Schedule
                                                                        --------
1.2(a)(iv) attached hereto), wherever located, used or held for use primarily in
----------
the conduct of the Business,  whether or not  capitalized  on the Seller's books
(collectively, the "Tangible Personal Property");

               (v)  Contracts and  Commitments.  The full benefit of (i) any and
                    --------------------------
all purchase  orders  placed with,  and accepted by, the Seller on, or prior to,
the Closing Date, and which have not been completely performed, or filled, prior
to the Closing Date, and any and all quotations,  bids or requests for proposals
submitted by the Seller to any other  person,  covering  the  purchase  from the
Seller of products to be supplied by the Seller,  or covering  the  rendition by
the  Seller of  service  on  products  supplied  by the  Seller  (excluding  all
deposits,  progress  payments  and  credits)  and listed on  Schedule  1.2(a)(v)
                                                             -------------------
hereto;  (ii) the purchase orders  (including but not limited to purchase orders
for goods on  consignment)  placed by the Seller prior to the Closing Date which
have not been  completely  performed  prior to the Closing  Date,  covering  the
purchase by the Seller of supplies, materials or services and listed in Schedule
1.2(a)(v)  hereto;  (iii) the  leases of real and  personal  property  and other
agreements  listed in Schedule  1.2(a)(v)  hereto;  (iv) all agreements (if any)
                      -------------------               
with  dealers  and  distributors  of  Seller's  products  as listed in  Schedule
                                                                        --------
1.2(a)(v); and (v) all other purchase orders,  quotations,  bids or requests for
---------
proposals as  described  in (i) or (ii) above placed by or with Seller  covering
the payment or receipt by the Seller each in the amount of Ten Thousand  Dollars
($10,000) or less,  and all other leases of real and personal  property  wherein
the annual rental payable with regard to any such lease is Ten Thousand  Dollars
($10,000)  or  less  (the  items   described  in  (i)  through  (v)  above  are,
collectively, the "Contracts and Commitments");

               (vi) Real  Property.  The Real  Property as set forth on Schedule
                    --------------                                      --------
1.2(a)(vi) attached hereto;
----------

               (vii)All  transferable   local,  state  and  federal  franchises,
licenses, bonds, permits and similar items pertaining to the Business and/or the
Purchased Assets;

               (viii) Other Assets.  The customer  lists and supplier  lists (if
                      ------------   
any)  relating  to the  Business  and  blueprints  (if  any)  applicable  to the
Inventory;  all rights under express or implied  warranties from  manufacturers,
vendors and suppliers (to the extent assignable);


                                       -2-



                                                             Page 12 of 44 Pages


               (ix) All shop reports, drawings, imprints,  blueprints,  computer
software,  including,  but not limited to, design software,  and engineering and
design  information  used or held for use by the  Seller in the  conduct  of the
Business;

               (x)  All supplies and sundry  items,  including,  but not limited
to, telephone numbers,  keys and lock combinations,  customer records, and books
and records of, or relating to and  material to the  operation  of the  Business
(including all customer files,  supplier  records,  purchase  orders,  invoices,
customer  lists,   warranty   information  and  records   relating  to  accounts
receivable) and the assets acquired and any obligations assumed pursuant hereto;
and

               (xi) All personnel  records and payroll records for all employees
employed  by the Seller as of the Closing  Date who are  retained or employed by
Purchaser.

          (b)  Excluded  Assets.  Notwithstanding  anything  contained  in  this
               ----------------
Agreement to the contrary,  the  following  shall be excluded from and shall not
constitute any part of the Purchased Assets (the "Excluded Assets"):

               (i)  Cash.  Cash  (including (a) checks  received by Seller on or
                    ----
prior to the Closing Date,  and (b) cash in bank  accounts),  commercial  paper,
certificates  of deposit and other bank  deposits,  treasury  bills,  other cash
equivalents and bank accounts;

               (ii) Excluded Inventory. All inventory of raw materials, work-in-
                    ------------------
process,   finished  goods,  supplies,   parts,  packaged  materials  and  other
accessories related to recreational  vehicles and the RV Business (as defined in
Section 1.3(b)) (the "Excluded Inventory");

               (iii)Excluded  Intellectual  Property.  The name,  tradename  and
                    --------------------------------
trademark,  whether  registered or  unregistered,  "Champion,"  "Champion  Motor
Coach" or "Champion Bus," or any derivatives  thereof, the stock exchange symbol
"CHB," and the  corporate  names,  logos,  designs,  or other  marks  associated
therewith  or  incorporating  any of the  foregoing,  and any other name,  logo,
design or other mark that has such a near  resemblance  thereto as may be likely
to cause  confusion  or mistake to the public,  or other  otherwise  deceive the
public (collectively, the "Excluded Intellectual Property");

               (iv) Insurance.  Life insurance  policies of officers,  directors
                    ---------
and  employees  or other  representatives  of Seller,  and all other  liability,
property, casualty and other insurance policies relating to the Purchased Assets
or the operation of the Business;

               (v)  Employee  Benefit  Plans.  All assets  owned or rights  held
                    ------------------------
under any Employee Benefit Plan;

               (vi) Tax  Refunds.  All refunds or  credits,  if any, of Taxes of
                    ------------
Seller for all Pre-Closing Tax Periods; and

               (vii)Books and Records.  The minute books,  stock  transfer books
                    -----------------
and corporate seal of Seller (the "Books and Records") of Seller.


                                       -3-



                                                             Page 13 of 44 Pages


          (c)  Assignment  of Contracts  and  Commitments.  On the Closing Date,
without  limiting the generality of Section 1.2 hereof,  the Seller shall assign
to the Purchaser all of the Seller's  rights under the Contracts and Commitments
set  forth on  Schedule  1.2(a)(v)  and  under  each  other  contract,  lease or
               -------------------
agreement  relating to the conduct of the Business by which the Seller is bound,
other than an Excluded  Liability (and, as provided in Section  1.3(a)(ii),  the
Purchaser  shall  assume  and agree to  perform  the  unexecuted  portion of the
Seller's duties thereunder).

               (i)  Consent.  Seller  covenants  and agrees that the  beneficial
interest in and to each agreement set forth in Schedule  1.2(a)(v) shall, to the
                                               -------------------
extent permitted by the relevant agreement and/or by law, pass to Purchaser, and
Seller covenants and agrees: (i) that it will hold and declare that it holds all
such  agreements  in trust for the  benefit of  Purchaser,  its  successors  and
assigns,  from and after the Closing Date; (b) to use all reasonable  efforts to
obtain and secure any and all  consents and  approvals  that may be necessary to
effect such  assignment or assignments of the same; (c) to make or complete such
assignment or assignments as soon as reasonably  possible;  and (d) to cooperate
with Purchaser  (and Purchaser  covenants and agrees that it shall so cooperate)
in any other reasonable arrangement designed to provide for actions necessary to
enable  Seller to fulfill  any such  agreements  until an  effective  assignment
thereof to Buyer can be obtained,  and the parties  agree to cooperate  and take
all necessary actions,  including  accountings  between parties,  to assure that
Purchaser  shall receive all of such benefits,  rights,  obligations  and duties
under  such  agreements.  The  provisions  of  this  Section  1.2(c)(i)  do  not
constitute a waiver of the conditions to Closing contained in Section 1.3(a)(ii)
or Section 6.9 hereof.

         1.3.  Liabilities of Seller.

          (a)  Assumed  Liabilities.  In  connection  with the  sale,  transfer,
conveyance,  assignment  and delivery of the Purchased  Assets  pursuant to this
Agreement,  on the  terms  and  subject  to the  conditions  set  forth  in this
Agreement, at the Closing,  Purchaser shall assume and agree to pay, perform and
discharge when due the following  Liabilities (but not the Excluded Liabilities)
of Seller (the "Assumed Liabilities"), as specified below:

               (i)  Balance  Sheet  Liabilities.  All  Liabilities  of Seller as
reflected in the Audited Closing Balance Sheet, including but not limited to all
trade payables (subject,  however, to adjustment as to any liabilities reflected
on the  Audited  Closing  Balance  Sheet  which are  subject  to pro  rations as
provided in Section 1.4(d) hereof;

               (ii) Contracts and  Commitments.  All Liabilities of Seller under
Contracts  and  Commitments,  whether  or  not  any  necessary  consents  to the
assignment  of any  Contracts  and  Commitments  to Seller  have  been  obtained
(subject  however to the following  sentence) and including any  Liabilities  of
Seller  which  may arise on  account  of the  termination  of any  Contracts  or
Commitments subsequent to the date of Closing (including, but not limited to any
repurchase  obligations  which  may  arise in the  event of  termination  of any
agreements with dealers or distributors of Seller's  products).  Notwithstanding
the  foregoing,  Purchaser  shall not be obligated to assume any contract  other
than "Chassis Contracts" (as hereafter defined),  and such contract shall not be
deemed  assigned  to  Purchaser,  for which the  consent,  if  required,  of the
contracting  party has not been  obtained if the failure to obtain such  consent


                                       -4-



                                                             Page 14 of 44 Pages

would materially impair the ability of Purchaser to receive the intended rights,
benefits,  duties and  obligations  of such contract and written  notice of such
election by Purchaser shall have been delivered to Seller not less than ten (10)
days prior to the Closing;  provided  that, in such event,  Seller shall have no
liability  or  responsibility  to  Purchaser  due to the  failure to obtain such
consent;  and further  provided that, in such event,  Seller may, at its option,
elect to terminate this Agreement if the aggregate of such un-assumed  contracts
would exceed $50,000.  As used herein,  "Chassis Contracts" mean those contracts
existing as of the date hereof and listed on Schedule  1.2(a)(v)  providing  for
the purchase of chassis used by Seller in the conduct of the Business.

               (iii)Employee  Liabilities.  Accrued  holiday and vacation pay as
                    ---------------------
reflected  on  the  Audited  Closing  Balance  Sheet  and  all  Liabilities  and
obligations  assumed by Purchaser pursuant to Article 8 in respect of the former
and current  employees of the Business who are employed or retained by Purchaser
on or after the Closing Date;

               (iv) Warranty and Service Claims.  All claims and/or  obligations
                    ---------------------------
relating to any warranties  made by Seller and/or service  practices or policies
of Seller  (but only to the  extent  such  service  practices  or  policies  are
consistent  with the service  practices and policies of Purchaser as of the date
hereof),  covering or relating to any products or property  manufactured,  sold,
repaired  or leased by the  Seller  and for  services  furnished  by the  Seller
(without  regard to or otherwise  limited by the amount of any warranty  reserve
reflected in the  Financial  Statement or the Audited  Closing  Balance  Sheet),
limited in all events to the repair or replacement  of the defective  product or
parts;  but  specifically  excluding  therefrom any claims arising from Seller's
ownership and operation of the RV Business (as hereafter defined); and

               (v)  Other   Contractual   Liabilities.   All  other  contractual
                    ---------------------------------
liabilities as set forth in Schedule 1.3(a)(v) attached hereto (the "Contractual
                            ------------------  
Liabilities").

          (b)  Excluded  Liabilities.  Purchaser  shall  not  assume or have any
               ---------------------
liability or obligation whatsoever for any liabilities or obligations whatsoever
of the Seller,  whether  accrued,  absolute,  contingent,  known or unknown,  or
otherwise,  and whether due or to become due, other than the Assumed Liabilities
(the "Excluded Liabilities") including, by way of example and not of limitation,
the following:  (a) any liability for any Taxes (unless reflected on the Audited
Closing  Balance  Sheet  or  otherwise  provided  herein  as the  obligation  of
Purchaser);  (b) any  liability  (other than warranty  claims or service  claims
relating to the repair or replacement of defective  products or parts) resulting
from or claimed to have been incurred by reason of an alleged  defect or defects
in any products sold or distributed by the Seller prior to the Closing Date; (c)
any Environmental Liabilities;  (d) any RV Liabilities;  (e) any liability under
any Employee Benefit Plan (but Purchaser shall assume all payroll-related  taxes
and  deductions,  and all accrued  vacation and holiday pay, as reflected on the
Audited  Closing Balance  Sheet);  and (f) any other  liabilities of any kind or
nature, whether now in existence or arising hereafter,  not constituting Assumed
Liabilities.  The Seller  agrees to  discharge,  promptly when due, all Excluded
Liabilities.  As used herein,  the  following  terms shall have the meanings set
forth below:

               "Environmental Liabilities" shall mean and refer to any claims or
liabilities now existing or which may hereafter arise on account of (i) Seller's


                                       -5-



                                                             Page 15 of 44 Pages

operation  of the  Business or the  Purchased  Assets on or prior to the Closing
Date;  (ii)  Seller's or Seller's  predecessors  use and  occupancy  of the Real
Property on or prior to the Closing  Date;  or (iii) the  condition  of the Real
Property as of the Closing Date, in violation of Environmental Laws.

               "Environmental Laws" means all federal, state or local (including
but  not  limited  to,  any  governmental  department  or  agency  or any  other
commission,  board or agency or instrumentality) statute, law, rule, regulation,
permit, agreement, ordinance, or judicial or administrative order relating to or
concerning  the  pollution or  protection  of the  environment,  human health or
safety,  or the  generation,  storage,  transportation,  treatment,  disposal or
handling  of  hazardous  materials,   substances  or  waste,  including  without
limitation,  the Clean Air Act,  the Clean Water Act,  the Solid Waste  Disposal
Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental
Response,  Compensation,  and  Liability Act of 1986,  the Federal  Insecticide,
Fungicide and Rodenticide Act, the  Occupational  Safety and Health Act, and the
Emergency Planning and Community Right-to-Know Act of 1986.

               "RV   Liabilities"   shall  mean  and  refer  to  any  claims  or
liabilities  now  existing or which may  hereafter  arise on account of Seller's
ownership and operation of the business of designing,  manufacturing,  marketing
and selling recreational  vehicles (the "RV Business") prior to the date hereof.
Seller has previously  discontinued  the RV Business and the Purchased Assets do
not include any assets or properties with regard thereto.

         1.4.  Purchase Price; Allocation.
               --------------------------

          (a)  Purchase  Price.  The aggregate  purchase price for the Purchased
               ---------------
Assets (the "Purchase Price") shall be the Audited Closing  Stockholders  Equity
as of the Closing Date as reflected in the Audited Closing  Balance Sheet,  plus
$420,000,  plus the assumption of the Assumed Liabilities.  On the Closing Date,
Purchaser  shall pay to  Seller a sum on  account  of the  Purchase  Price  (the
"Purchase Price Estimate") which shall be equal to ninety-five  percent (95%) of
the stockholder's  equity as reflected on the Financial Statement (as defined in
Section 2.8). Such amount shall be payable in United States dollars by Purchaser
to Seller by wire  transfer of  immediately  available  funds to such account or
accounts as Seller may  direct.  The amount  retained  from the  Purchase  Price
Estimate shall be referred to as the "Hold Back Amount."

          (b)  Audited Closing Balance Sheet; Hold Back Amount.
               -----------------------------------------------

               (i)  Seller  shall  cause  Price  Waterhouse,  L.L.P.,  certified
public accountants (the "Auditor"), to perform an audit ("Audit") of the balance
sheet of the Seller as of the Closing Date (the "Audited Closing Balance Sheet")
and a related  statement  of income of the Seller for the period of December 29,
1996  to  the  Closing  Date  (collectively,   the  "Audited  Closing  Financial
Statements").  The Audit will be prepared at Seller's sole cost and expense.  In
connection with the preparation of the Audited Closing Financial Statements, the
Seller shall conduct a physical  inventory  count as of the Closing Date,  which
physical  inventory  shall be observed by the Auditor.  A copy of such inventory
count  shall be  delivered  to  Purchaser  with the  Audited  Closing  Financial
Statements.  Purchaser shall be entitled to appoint representatives,  who may be
members of its internal  accounting  staff or its independent  certified  public
accountants,  to  observe  the  preparation  of the  Audited  Closing  Financial


                                       -6-



                                                             Page 16 of 44 Pages

Statements and such inventory  count. The Audited Closing  Financial  Statements
(x) shall contain line items substantially consistent with the line items in the
unaudited  financial  statements  of the Seller as of and for the  period  ended
November 1, 1997,  (y) shall be prepared in  accordance  with GAAP except to the
extent the  requirements  of clauses (a) and (b) below may not be in  accordance
with generally accepted accounting principles  consistently applied ("GAAP") and
(z) shall fairly  present the  financial  position of the Seller as of the dates
indicated and the results of its operations for the periods indicated. Purchaser
acknowledges  that the Audited  Closing Balance Sheet may vary from the November
1, 1997 balance sheet  included in the  Financial  Statement as to various items
including, but not limited to, the following:

          (a)  increase in the  provision for excess,  slow-moving  and obsolete
inventory in the amount of $150,000; and

          (b)  increase in the warranty reserve in the amount of $270,000.

Purchaser  further  agrees that any  adjustments,  as  reflected  in the Audited
Closing  Balance Sheet, to the November 1, 1997 balance sheet with regard to the
preceding items (a) and (b) shall be limited to the amounts as specified above.

               (ii) In performance  of the Audit,  the Auditor shall conduct the
examination  of the  Seller  in  accordance  with  generally  accepted  auditing
standards  consistently  applied.  The  Auditor  shall use its best  efforts  to
complete  the Audit as soon as  possible  (but in no event later than sixty (60)
days) after the Closing Date and the Audited Closing Financial  Statements shall
be delivered to Purchaser and the Seller  immediately  upon completion  thereof,
together with a calculation of the Audited  Closing  Stockholders  Equity of the
Seller and its work papers,  and its opinion that the foregoing were prepared in
accordance  with this Section.  The Purchaser  shall have thirty (30) days after
receipt of the Audited Closing  Financial  Statements and the calculation of the
Audited Closing  Stockholders Equity of the Seller and the Auditor's work papers
to deliver a written  notice to the Seller of any objections  thereto.  Any such
notice of objections shall be in writing and shall state, in reasonable  detail,
the basis for each  objection and the amount of  adjustment  which the Purchaser
believes is required in respect  thereto.  If the  aggregate  amount of all such
objections  raised by  Purchaser  shall be  $350,000  or less,  then the Audited
Closing  Financial  Statements  and  the  calculation  of  the  Audited  Closing
Stockholders Equity as determined by the Auditor shall be deemed correct,  final
and binding upon the  Purchaser and the Seller.  If the aggregate  amount of all
such objections shall exceed $350,000,  and if Purchaser and Seller cannot agree
with respect to the Audited Closing  Financial  Statements or the calculation of
the  Audited  Closing  Stockholders  Equity  within  thirty  (30) days after the
delivery of such notice of  objections  or such later date as may be agreed upon
by  Purchaser  and  Seller,  then,  but only as to such  amounts  in  excess  of
$350,000,  the  dispute  shall be  resolved  by  arbitration  by an  independent
accounting  firm  agreed  upon by  Purchaser  and the Seller  (the  "Independent
Accounting  Firm").  Any items not in  dispute  shall be  deemed  stipulated  by
Purchaser  and  the  Seller  and  shall  not be  determined  by the  Independent
Accounting Firm. The  determination of the Independent  Accounting Firm shall be
binding and conclusive upon the matters determined thereby and may be entered as
a  judgment  by any court of  competent  jurisdiction;  provided,  however,  the
Audited Closing Financial  Statements and the calculation of the Audited Closing


                                       -7-



                                                             Page 17 of 44 Pages

Stockholders  Equity  shall  be  adjusted  only  by the  amount  by  which  such
determination exceeds $350,000.  All costs and expenses relating to the services
provided by the  Independent  Accounting Firm shall be paid equally by Purchaser
and Seller.

               (iii)In the event that the Purchase  Price  Estimate  exceeds the
Audited Closing  Stockholders  Equity of the Seller by more than $420,000,  then
the amount of such excess which is greater  than  $420,000  (the  "Overpayment")
shall be deducted from the Hold Back Amount and if the  Overpayment  exceeds the
Hold Back Amount,  the Seller shall immediately repay to Purchaser the amount of
the difference together with interest at an annual rate of six percent (6%) from
the  Closing  Date until  paid in full.  In the event  that the  Purchase  Price
Estimate is less than the Audited Closing Stockholders Equity of the Seller plus
the sum of  $420,000,  the  Purchaser  shall  immediately  pay to the Seller the
amount of the difference together with interest at an annual rate of six percent
(6%) from the Closing Date until paid in full.

               (iv) For  purposes  hereof  the  following  term  shall  have the
following meaning:

               "Audited  Closing  Stockholders  Equity"  means an
                --------------------------------------
               amount equal to the  stockholders  equity account,
               plus the net  intercompany  balance with Champion,
               and as adjusted for  Excluded  Assets and Excluded
               Liabilities,  reflected  in  the  Audited  Closing
               Balance  Sheet as the same  may be  adjusted  upon
               resolution  of  any  questions  or  disputes  with
               respect thereto pursuant to Section 1.4(b) above.

          (c)  Any undisbursed  portion of the Hold Back Amount shall be paid to
the  Seller  at  such  time  as  the  amounts  determined  pursuant  to  Section
1.4(b)(iii) are paid.

          (d)  Pro Rations.
               -----------

               (i)  Property  Taxes;  Special  Assessments.  Real  and  personal
                    --------------------------------------
                    property Taxes and installments of special assessments shall
                    be prorated  between  Seller and Purchaser as of the Closing
                    Date in accordance with local practice; and

               (ii) Other.  All  revenue  stamps  and all other  items  normally
                    -----
                    prorated in transactions of a similar kind shall be prorated
                    in accordance with GAAP.

          (e)  Allocation of Consideration.  The consideration paid by Purchaser
               ---------------------------
               for the  Purchased  Assets  shall be  allocated  as set  forth in
               Schedule 1.4(e) annexed hereto. Each party hereto agrees (i) that
               ---------------
               any such allocation  shall be consistent with the requirements of
               Section  1060  of  the  Code  and  the  regulations   promulgated
               thereunder,  (ii) to complete jointly and to file separately Form
               8594 with its  Federal  income  Tax Return  consistent  with such
               allocation for the tax year in which the Closing Date occurs, and
               (iii) that no party  hereto  shall take a position on any income,
               transfer  or  gains  Tax  Return,   before  any  Governmental  or
               Regulatory  Authority charged with the collection of any such Tax
               or in any judicial proceeding, that is in any manner inconsistent
               with the terms of any such allocation  without the consent of the
               other party, which consent shall not be unreasonably  withheld or
               delayed.


                                       -8-



                                                             Page 18 of 44 Pages


         1.5. Closing.  The Closing shall take place at the offices of Seller in
              -------
Auburn Hills,  Michigan, or at such other place as Purchaser and Seller mutually
agree,  at 10:00 a.m.  local time, on January 30, 1998 or at such other time and
place as Purchaser and Seller may agree.  The date on which the Closing actually
occurs is referred to herein as the "Closing  Date".  At the Closing,  Purchaser
shall pay the  Purchase  Price less the Hold Back  Amount as provided in Section
1.4, and simultaneously with such payment, (a) Seller shall assign, transfer and
convey to  Purchaser  the  Purchased  Assets,  "as is,  where is,"  without  any
warranty except as otherwise  specifically provided herein, by delivery of (i) a
General  Assignment and Bill of Sale substantially in the form of Exhibit 1.5(a)
                                                                  --------------
hereto (the "General Assignment"), duly executed by Seller, (ii) a Warranty Deed
in the form of Exhibit 1.5(b) hereto (the "Warranty Deed"), and (iii) such other
               --------------
good and sufficient instruments of conveyance,  assignment and transfer, in form
and substance  reasonably  satisfactory  to Purchaser,  as shall be effective to
vest in  Purchaser  all of  Seller's  right,  title and  interest  in and to the
Purchased  Assets  (the  General   Assignment,   Warranty  Deed  and  the  other
instruments  referred to in clause (a)(iii) of this sentence,  being referred to
herein as the  "Assignment  Instruments");  and (b) Purchaser  shall assume from
Seller the due payment,  performance and discharge of the Assumed Liabilities by
delivery of (i) an  Assumption  Agreement  substantially  in the form of Exhibit
                                                                         -------
1.5(c) hereto (the "Assumption Agreement"), duly executed by Purchaser, and (ii)
------
such other good and sufficient instruments of assumption,  in form and substance
reasonably  acceptable  to Seller,  as shall be effective to cause  Purchaser to
assume the Assumed  Liabilities as and to the extent  provided in Section 1.3(a)
(the  Assumption  Agreement  and such other  instruments  referred  to in clause
(b)(ii)  of  this  sentence  being   referred  to  herein  as  the   "Assumption
Instruments").  At the  Closing,  there  shall also be  delivered  to Seller and
Purchaser  the  certificates  and other  contracts,  documents  and  instruments
required to be delivered under Articles 6 and 7 hereof.

         1.6.  Further Assurances, Post-Closing Cooperation.
               --------------------------------------------

          (a)  Subject to the terms and  conditions  of this  Agreement,  at any
time and from time to time after the Closing, at Purchaser's reasonable request,
Seller shall execute and deliver to Purchaser  such other  instruments  of sale,
transfer,  conveyance,  assignment and confirmation,  provide such materials and
information  and take such  other  actions  as  Purchaser  may  reasonably  deem
necessary or desirable in order to more effectively transfer,  convey and assign
to Purchaser,  and to confirm  Purchaser's title to, all of the Purchased Assets
and,  to the  fullest  extent  permitted  by Law,  to put  Purchaser  in  actual
possession  and  operating  control  of the  Purchased  Assets,  and  to  assist
Purchaser in exercising all rights with respect thereto,  and otherwise to cause
Seller to fulfill its obligations under this Agreement.

          (b)  Subject to the terms and  conditions  of this  Agreement,  at any
time and from time to time after the Closing,  at Seller's  reasonable  request,
Purchaser  shall  execute  and  deliver  to Seller  such  other  instruments  of
assumption,  provide such materials and  information and take such other actions
as  Seller  may  reasonably  deem  necessary  or  desirable  in  order  to  more
effectively give effect to Purchaser's  obligations under Section 1.3(a) of this
Agreement  and to assist  Seller in  exercising  all rights with respect to this
Agreement,  and otherwise to cause  Purchaser to fulfill its  obligations  under
this Agreement.

          (c)  Seller  shall have and be  entitled  to, and  Purchaser  shall so
permit and provide  Seller,  access to the books and records of the  Business to


                                       -9-



                                                             Page 19 of 44 Pages


the extent such  information is reasonably  helpful to Seller in connection with
(i) the defense of any claims arising under any indemnification  obligations, or
(ii) any other proper business purpose.


                                   ARTICLE 2.

                    REPRESENTATIONS AND WARRANTIES OF SELLER
                   ------------------------------------------

         Seller hereby represents and warrants to Purchaser as follows:

         2.1.  Corporate  Existence.  Seller is a corporation duly incorporated,
               --------------------
validly  existing and in good  standing  under the Laws of its  jurisdiction  of
incorporation.  Seller  has full  corporate  and other  power and  authority  to
conduct the  Business as and to the extent now  conducted by it, and to transfer
(pursuant to this Agreement) the Purchased Assets.

         2.2.  Authority.  Seller  has full  corporate  power and  authority  to
               ---------
execute and deliver this  Agreement and the Related  Agreements to which it is a
party, to perform its obligations hereunder and thereunder and to consummate the
transactions  contemplated  hereby and thereby.  All corporate and other acts or
proceedings required to be taken by Seller to authorize the execution,  delivery
and performance of this Agreement and all transactions  contemplated hereby have
been duly and properly taken. This Agreement is and the Related  Agreements will
be duly executed and delivered by the Seller and is and will be the legal, valid
and  binding  obligation  of the  Seller,  enforceable  against  the  Seller  in
accordance with their terms.

         2.3.  Consents  and  Approvals;  No  Violation.  Except as disclosed on
               ----------------------------------------
Schedule 2.3 hereto,  the execution,  delivery and  performance by the Seller of
------------
this Agreement and the documents and instruments to be executed and delivered by
Seller  pursuant  hereto do not and will not:  (a) violate any  provision of the
Seller's  articles  of  incorporation  or  by-laws;  (b)  require  any  consent,
approval,  authorization  or action by,  notice or  disclosure  to, or filing or
registration with, or permit of, any governmental  body, agency or official,  or
court except for the applicable requirements of the Hart-Scott-Rodino  Antitrust
Improvements  Act of 1976,  as  amended  (the  "HSR  Act");  (c)  contravene  or
constitute a default under any indenture,  mortgage, lease or other agreement to
which the Seller is a party or is bound,  or by which any of the  properties  or
assets of the Seller may be bound or affected (other than any consents which may
be required in connection  with the  assignment to Purchaser of any Contracts or
Commitments) (Schedule 2.3 further sets forth, to the Knowledge of Seller, those
              ------------
written agreements which require the consent of third parties in connection with
the assignments thereof to Purchaser);  or (d) result in a violation of any law,
statute, ordinance,  regulation, judgment, injunction, order, decree or award of
any court or governmental  authority or body having jurisdiction over the Seller
or is bound,  or by which any of the  properties  or assets of the Seller may be
bound or affected.

         2.4.  Legal  Proceedings.  Except as disclosed on Schedule 2.4 attached
               ------------------                          ------------
hereto, there are no Orders outstanding against Seller which, individually or in
the  aggregate,  have had or could  reasonably  be  expected  to have a material
adverse  effect  on  the  ability  of  Seller  to  consummate  the  transactions
contemplated by this Agreement.


                                      -10-



                                                             Page 20 of 44 Pages

         2.5.  Tax  Matters.  All  federal,  state,  local and  foreign  income,
               ------------
profits,  franchise,  sales, use, occupation,  property,  excise and other taxes
(including interest and penalties), if any, which if not paid would result in an
Encumbrance  (as defined in Section 2.6) against the Purchased  Assets have been
paid through the date of this  Agreement  or will be paid by Seller,  subject to
any prorations as contemplated  by this Agreement.  The Seller (a) has filed all
federal,  state and local tax returns required by law in the prescribed time and
manner,  and paid all taxes,  assessments  and penalties due and payable (unless
reflected  on the Audited  Closing  Balance  Sheet);  (b) has made all  payments
required by any governmental program of workers' social security or unemployment
compensation;  (c) has  withheld and paid over to the  appropriate  governmental
authority all amounts  required by law to be withheld from the wages or salaries
of  employees;  (d) is not  liable  for any  arrears  of wages  or any  taxes or
penalties for failure to comply with any of the  foregoing;  and (e) has paid or
will pay over to the appropriate  governmental  authority all sales or use taxes
referable to the Seller's operations due as of the Closing Date, and has made or
will make  provisions for payment of all such taxes accrued as of such date, but
not yet due.  There  are no claims  pending  or,  to the best  knowledge  of the
Seller,  threatened  against  the Seller  for past due taxes,  nor are there any
outstanding  waivers or  agreements  by the Seller for the extension of the time
for the assessment of any tax.

         2.6.  Title to  Property.  Except  as set  forth in the  Schedules  and
               ------------------
Exhibits hereto,  and except for Inventory held on consignment,  Seller has good
and marketable  title to all the Purchased Assets to be transferred to Purchaser
under this  Agreement,  and will at the Closing  transfer  such  properties  and
assets to Purchaser free and clear of all the following  (collectively  referred
to as "Encumbrances"):  security interests,  liens,  pledges,  claims,  charges,
escrows, encumbrances,  options, rights of first refusal, mortgages, indentures,
security agreements or other agreements,  arrangements,  contracts, commitments,
understandings  or  obligations,  whether  written  or  oral,  other  than  this
Agreement,  except  liens  for  current  taxes  not  yet  due  and  payable  and
Encumbrances disclosed on Schedule 2.6 ("Permitted Encumbrances").
                          ------------

         2.7.  Brokers.  All  negotiations  relative to this  Agreement  and the
               -------
transactions  contemplated  hereby and thereby  have been  carried out by Seller
directly  with  Purchaser  without the  intervention  of any Person on behalf of
Seller in such manner as to give rise to any valid  claim by any Person  against
Purchaser for a finder's fee, brokerage commission or similar payment.

         2.8.  Financial Statement.
               -------------------

                  2.8.1 Exhibit 2.8 hereto contains the unaudited  balance sheet
                        -----------
of the Seller as of November 1, 1997 (the "Financial Statement").  The Financial
Statement  has been  prepared in accordance  with  Seller's  regularly  employed
accounting  practices  (which may differ  from  GAAP) and  fairly  presents  the
Seller's financial position on that date in accordance therewith.

                  2.8.2  The  Audited   Closing   Financial   Statements,   when
delivered, will comply with Section 1.4(b) hereof.
                                    ------

         2.9.  Contracts and  Commitments.  Schedule  1.2(a)(v)  hereto contains
               --------------------------   -------------------
true, complete and correct lists of all of the Contracts and Commitments,  other
than purchase  orders,  quotations,  bids or requests for proposals placed by or


                                      -11-



                                                             Page 21 of 44 Pages

with the Seller covering the payment or receipt by the Seller each in the amount
of Ten  Thousand  Dollars  ($10,000)  or less and other than  leases of real and
personal  property  wherein the annual  rental  payable  with regard to any such
lease is Ten Thousand Dollars ($10,000) or less. To the Knowledge of Seller, all
the Contracts and  Commitments,  including  leases of the Real Property,  are in
full force and effect,  have not been amended or modified except as set forth in
Schedule  1.2(a)(v),  have no defaults thereunder nor does there exist any event
-------------------
or  condition  which,  with the giving of notice or the passage of time or both,
would  constitute a default  thereunder.  True and correct copies of each of the
Contracts and Commitments have been delivered to the Purchaser.

         2.10.  Real Property.  Schedule  1.2(a)(vi)  hereto contains a true and
                -------------   --------------------
complete list of all real property  (including the Real Property) that is owned,
leased or  subleased by the Seller or as to which the Seller has any interest of
any kind including,  without limitation, all office, manufacturing and warehouse
facilities.

         2.11.  Litigation.  Except as disclosed on Schedule 2.11 hereto, Seller
                ----------                          -------------
has no knowledge of any legal actions,  suits,  arbitrations,  or other legal or
administrative   proceedings  or  investigations  before  any  federal,   state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, pending or threatened against or otherwise affecting the Seller
or  involving  any  respective  properties,  assets or  business  of the  Seller
(including the Purchased Assets).  To the Knowledge of Seller,  there is no fact
or facts  existing  which might  result in, nor is there any basis for, any such
action, suit, arbitration, or other proceeding or investigation. Seller is not a
party to or subject to any order, writ,  injunction,  decree,  judgment or other
restriction of any federal,  state, municipal or other governmental  department,
commission, board, bureau, agency, or instrumentality which has or could have an
adverse effect on the Business,  the Purchased Assets or the Assumed Liabilities
or on the  Seller's  ability  to enter into this  Agreement  or  consummate  the
transactions contemplated hereby.

         2.12.  Compliance  with Laws.  To the  Knowledge  of Seller,  except as
                ---------------------
disclosed in this Agreement or in any Schedule or Exhibit hereto,  and except as
to Environmental  Laws, the Seller, in all material respects,  has complied with
and is in compliance  with,  and has not received  notice from any  governmental
authority, including the National Highway Traffic Safety Administration,  of any
violation  of, any and all material  applicable  laws,  rules,  regulations  and
ordinances  regulating or relating to the Business,  the Purchased Assets or the
Assumed Liabilities in effect from time to time. To the Knowledge of Seller, all
of the  Seller's  products are and have been,  at the time of sale,  in material
compliance with all material construction, safety and other standards imposed on
the  Business by  statute,  rule or  regulation  of any  governmental  authority
(federal, state or local) or industry association.

         2.13.  Inventory.  The  valuation  at which the  Inventory  is  carried
                ---------
reflects and will reflect the normal inventory valuation policy of the Seller of
stating  inventory at the lower of cost (first-  in-first-out-method)  or market
(except as provided  in Section  1.4(b)(i)(a)  and (b)) and its regular  costing
practices with respect to work in process and finished goods inventory.

         2.14.  Employees.  None  of the  Seller's  employees  is  covered  by a
                ---------
collective  bargaining  agreement  and, to the knowledge of Seller,  there is no
union or other organization seeking or claiming to represent any such employees.

                                      -12-



                                                             Page 22 of 44 Pages



               (a)  Attached  hereto as Schedule  2.14(a) is a true and complete
                                        -----------------
list of the names and  current  salary  rates of all  present  employees  of the
Business whose current annual salary is more than $50,000.

               (b)  Schedule  2.14(b)  contains a true and complete  list of all
                    -----------------
Employee  Benefit Plans (as defined) for the  employees of the Seller,  salaried
and  nonsalaried,  including  any  formal or  informal  plans,  and the  funding
arrangements with regard thereto.  Except as disclosed on Schedule 2.14(b),  the
                                                          ----------------
Seller has no Plan currently in existence  which is subject to the  requirements
of ERISA.  Except as disclosed on Schedule 2.14(b),  (A) neither the Seller, its
                                  ----------------
parent,  any subsidiary of the Seller, or any "ERISA Affiliate" (any business or
entity  which is (i) a member of a  "controlled  group of  corporations,"  under
"common  control" or an  "affiliated  service  group" with the Seller within the
meaning of Code sections  414(b),  (c) or (m), or (ii) required to be aggregated
with the Seller under Code section 414(o),  or (iii) under "common control" with
the  Seller)  presently  sponsors,  maintains,  contributes  to,  (B) nor is the
Seller,  its  parent,  any  subsidiary  of the  Seller,  or any ERISA  Affiliate
required to contribute to, (C) nor has the Seller, its parent, any subsidiary of
the Seller, or any ERISA Affiliate ever sponsored,  maintained,  contributed to,
or been required to contribute  to, a pension plan subject to Title IV of ERISA.
The  transactions  contemplated  under  this  Agreement  will  not  trigger  any
liability with respect to any pension plan sponsored by Seller,  its parent, any
subsidiary of Seller, or any ERISA Affiliate.  With respect to all employees and
former  employees of the Seller,  neither the Seller nor any of its subsidiaries
or affiliates presently maintains, contributes to or has any liability under any
funded or unfunded  medical,  health or life insurance  plan or arrangement  for
present or future retirees or present or future  terminated  employees.  Neither
the  Seller  nor any of its  subsidiaries  or  affiliates  presently  maintains,
contributes to or has any liability  (including current or potential  withdrawal
liability) with respect to any  "multiemployer  plan" as such term is defined in
Section 3(37) of ERISA.

               (c)  Except as set forth on Schedule 2.14(c), the Seller is not a
                                           ----------------
party to or bound  by (i) any  contract  with any  present  employee  or  former
employee of the Seller, (ii) any employment, termination or severance agreement,
(iii) any  agreement  with any  officer or other  employee of the Seller (A) the
benefits of which are contingent,  or the terms of which are materially altered,
upon the  occurrence of a transaction  involving the Seller of the nature of any
of the  transactions  contemplated by this Agreement,  (B) providing any term of
employment  or  compensation  guarantee  extending  for a period  of one year or
longer  or  (C)  providing  severance  benefits  or  other  benefits  after  the
termination of employment of such officer or employee not comparable to benefits
available to employees  generally,  or (iv) any agreement or plan, including any
stock option plan or stock  purchase  plan, any of the benefits of which will be
increased,  or the vesting or other realization of the benefits of which will be
accelerated,  by  the  occurrence  of  the  transactions  contemplated  by  this
Agreement or the value of any of the benefits of which will be calculated on the
basis of the transactions contemplated by this Agreement.

         2.15.  Product  Liability.  To the Knowledge of Seller,  the Seller has
                ------------------
insurance  against loss or damage  arising out of product  liability,  copies of
which have been delivered to the Purchaser.  Such insurance covers all incidents
of loss  which  have  occurred  prior to the date  hereof  or  which  may  occur
resulting from the Seller's Products sold prior to the Closing. To the Knowledge
of Seller,  incidents  of damage  claims paid by the Seller or by its  insurance
carrier within the preceding 24 month period are described in Schedule 2.15.

                                      -13-



                                                             Page 23 of 44 Pages


         2.16.  Warranties  and Service  Practices.  To the Knowledge of Seller,
                ----------------------------------
there are no oral or written  warranties or service practices or policies on the
products sold by the Seller, whether express or implied, other than as set forth
in  Schedule  2.16  hereto  and any  implied  warranties  that may be imposed by
    --------------
operation of law.

         2.17. Accounts Receivable.  The Accounts Receivable which will be shown
               -------------------
on the Audited  Closing  Balance  Sheet will have  resulted from bona fide sales
made by the Seller in the ordinary course of business and will be collectible in
the ordinary  course  (including  the  exhaustion of all  reasonable  efforts to
collect) after  provision for doubtful  accounts as shown on such balance sheet.
The amounts due, or to become due, in respect of such Accounts  Receivable shall
not be in dispute  and there  shall not be any valid  setoffs  or  counterclaims
asserted against any of the Accounts Receivable.


                                   ARTICLE 3.

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

         Purchaser hereby represents and warrants to Seller as follows:

         3.1. Corporate Existence. Purchaser is a corporation duly incorporated,
              -------------------
validly  existing and in good  standing  under the laws of its  jurisdiction  of
incorporation.  Purchaser  has full  corporate  and other power and authority to
enter into this Agreement and the Related  Agreements to which it is a party, to
perform  its  obligations   hereunder  and  thereunder  and  to  consummate  the
transactions contemplated hereby and thereby.

         3.2.  Authority.  The  execution  and  delivery  by  Purchaser  of this
               ---------
Agreement and the Related Agreements to which it is a party, and the performance
by Purchaser of its  obligations  hereunder and  thereunder,  have been duly and
validly  authorized by all necessary  corporate action on the part of Purchaser,
no other  corporate  action  on the part of  Purchaser  or its  stockholders  or
constituent  entities being necessary therefor.  All corporate and other acts or
proceedings  required  to be taken by  Purchaser  to  authorize  the  execution,
delivery and  performance of this  Agreement,  the Related  Agreements,  and all
transactions  contemplated hereby and thereby have been duly and properly taken.
This Agreement is and the Related Agreements will be duly executed and delivered
by the Purchaser and is and will be the legal,  valid and binding  obligation of
the Purchaser, enforceable against the Purchaser in accordance with their terms.

         3.3. No  Conflicts.  The  execution  and  delivery by Purchaser of this
              -------------
Agreement and the Related  Agreements to which it is a party, the performance by
Purchaser of its obligations  under this Agreement and such Related  Agreements,
and the  consummation of the transactions  contemplated  hereby and thereby will
not  conflict  with or result  in a  violation  or  breach of any of the  terms,
conditions or provisions of the  certificate (or articles) of  incorporation  or
by-laws (or other comparable corporate charter document) of Purchaser.

          3.4. Legal  Proceeding.   There  are  no  Orders  outstanding  against
               -----------------
Purchaser  which,  individually  or in  the  aggregate,  have  had or  could  be


                                      -14-



                                                             Page 24 of 44 Pages


reasonably  expected  to  have a  material  adverse  effect  on the  ability  of
Purchaser to consummate the transactions contemplated by this Agreement.

         3.5.  Brokers.  All  negotiations  relative to this  Agreement  and the
               -------
transactions  contemplated hereby and thereby have been carried out by Purchaser
directly  with  Seller  without  the  intervention  of any  Person  on behalf of
Purchaser  in such  manner  as to give  rise to any  valid  claim by any  Person
against Seller for a finder's fee, brokerage commission or similar payment.

         3.6.  Due  Diligence.  Purchaser  acknowledges  and agrees  that it has
               --------------
obtained a commitment for title insurance,  a survey and a phase I environmental
report  with  regard to the Real  Property  and is  satisfied  with all  matters
relating to the  condition and status of title of the Real Property as reflected
therein;  provided,  however,  nothing  herein shall be deemed to release Seller
from  the  sole  responsibility  for all  Environmental  Liabilities.  Purchaser
further  acknowledges  and agrees that it has  conducted  its own due  diligence
review of the Business and the Purchased Assets and is satisfied in all respects
with the results thereof.


                                   ARTICLE 4.

                               COVENANTS OF SELLER

         4.1.  HSR Act.  Seller  shall take all  commercially  reasonable  steps
               -------
necessary  to  cooperate   with   Purchaser  in  the  filing  of  the  premerger
notification  under the HSR Act and shall provide any  supplemental  information
which may be reasonably  requested in connection  therewith  pursuant to the HSR
Act.  Such  notification  filings  shall be  accompanied  by a request for early
termination of the applicable waiting periods under the HSR Act and Seller shall
cooperate and use reasonable  efforts to have such waiting periods terminated on
the earliest practicable date.

         4.2.  Fulfillment  of  Conditions.  Seller shall take all  commercially
               ---------------------------
reasonable steps necessary or desirable and proceed diligently and in good faith
to satisfy each condition  within its reasonable  control to the  obligations of
the  parties  hereto  contained  herein  and  shall not take or fail to take any
action that could reasonably be expected to result in the  nonfulfillment of any
such condition.  Seller will use its reasonable  efforts to assist  Purchaser in
obtaining  the consents of any third parties which may be required in connection
with the transfer and  assignment  of the  Contracts  and  Commitments,  but the
failure to obtain such consents shall in no way limit Purchaser's obligations as
provided in Section 1.3(a)(ii) hereof.

         4.3.  Conduct of  Business.  From the date  hereof  until the  Closing,
               --------------------
Seller shall  conduct the business and  operations  of the Seller in  accordance
with past  practice and in the ordinary  course of business,  shall use its best
efforts to maintain the Seller's  current  business  organization  and goodwill,
shall use its best  efforts to continue to retain the  services of the  Seller's
present  employees and  consultants,  and shall use its best efforts to preserve
the Seller's relationships with dealers, customers,  suppliers and others having
business  dealings with the Seller,  and shall not enter into any transaction or
perform  any  act  which  would  constitute  a  breach  of the  representations,
warranties,  covenants and agreements contained herein.  Seller will, consistent
with this  Section  4.3,  continue to conduct the business of the Seller only in


                                      -15-



                                                             Page 25 of 44 Pages

the ordinary  course in  accordance  with past  practice and will take no action
which could  reasonably be expected to result in the Purchased  Assets not fully
reflecting the earnings of the Seller for such period.

         4.4. Non-Competition  Agreements. At the Closing the Seller shall enter
              ---------------
into a  non-competition  agreement  with  Purchaser for a term of five (5) years
with regard to the Business in the geographic area covering North America, which
agreement   will  be  in  the  form   attached   hereto  as  Exhibit   4.4  (the
"Non-Competition Agreement").

         4.5.  License  Agreement.  At the Closing the Seller shall enter into a
               ------------------
license agreement with Purchaser,  which agreement shall be in the form attached
hereto as Exhibit 4.5 (the "License  Agreement"),  providing Purchaser,  without
any separate or additional cost, with the exclusive right and license to use the
names  "Champion  Motor  Coach"  and  "Champion  Bus" for a  perpetual  term and
otherwise in the manner provided in the License Agreement.

         4.6.  Access to  Information.  Between  the date hereof and the Closing
               ----------------------
Date,  the Seller shall afford the  Purchaser  and its  representatives  access,
during normal  business hours,  to all of the business  operations,  properties,
books,  files  and  records  relating  to  the  Business,  to  cooperate  in the
examination  thereof,  and to furnish the Purchaser all information with respect
to the  business  and affairs of the Business as the  Purchaser  may  reasonably
request,  provided  that the  Purchaser  shall not unduly  disrupt the  ordinary
operation of the Business.  The Purchaser and its representatives shall have the
right to discuss  the  affairs of the  Business  with the  directors,  officers,
employees, consultants, advisors and agents of the Seller.


                                   ARTICLE 5.

                             COVENANTS OF PURCHASER

         5.1. HSR Act. Not later than the next  Business Day  following the date
              -------
of this Agreement, Purchaser shall file the premerger notification under the HSR
Act and any  supplemental  information  which  may be  reasonably  requested  in
connection  therewith  pursuant to the HSR Act,  and such  notification  filings
shall be  accompanied  by a request  for  early  termination  of the  applicable
waiting periods under the HSR Act.  Purchaser shall cooperate and use reasonable
efforts to have such waiting  periods  terminated  on the  earliest  practicable
date. Purchaser and Seller shall each be responsible for and pay one-half of the
required HSR filing fee of $45,000.

         5.2.  Fulfillment of Conditions.  Purchaser shall take all commercially
               -------------------------
reasonable steps necessary or desirable and proceed diligently and in good faith
to satisfy each condition  within its reasonable  control to the  obligations of
the  parties  hereto  contained  herein  and  shall not take or fail to take any
action that could reasonably be expected to result in the  nonfulfillment of any
such condition.

         5.3. Payment and Performance Bonds; Third Party Releases. Within thirty
              ---------------------------------------------------
(30)  days   subsequent  to  Closing,   Purchaser   shall   provide   acceptable
substitutions for all payment and/or performance bonds, as set forth in Schedule
5.3 attached hereto,  delivered by Seller to third parties pursuant to Contracts


                                      -16-



                                                             Page 26 of 44 Pages

and  Commitments  assigned to  Purchaser as to which the  conditions  of Section
1.2(c) have been met.  Further,  Purchaser  shall use its best efforts to obtain
releases  from each  other  party as set forth in  Schedule  5.3.  In any event,
Purchaser shall indemnify  Seller from any liability and/or recourse with regard
to the foregoing.


                                   ARTICLE 6.

                     CONDITIONS TO OBLIGATIONS OF PURCHASER

          The  obligations  of Purchaser  hereunder  to purchase  the  Purchased
Assets  and to assume  and  agree to pay,  perform  and  discharge  the  Assumed
Liabilities,  are subject to the  fulfillment,  at the  Closing,  of each of the
following  conditions  (all or any of which may be waived in whole or in part by
Purchaser in its sole discretion):

         6.1. Representations and Warranties. The representations and warranties
              ------------------------------
made by  Seller  shall be true and  correct,  in all  material  respects  on the
Closing Date.

         6.2. Performance. Seller shall have performed and complied with, in all
              -----------
material respects,  the agreements,  covenants and obligations  required by this
Agreement to be so performed or complied with by Seller at the Closing.

         6.3.  Officers'  Certificate.  Seller shall have delivered to Purchaser
               ----------------------
certificates,  dated the Closing Date and executed on its behalf by  appropriate
officers of Seller,  substantially  in the form and to the effect of Exhibit 6.3
hereto.

         6.4. HSR Act. The waiting  period  imposed under the HSR Act shall have
              -------
expired or been terminated.

         6.5.  MESC  Contribution  Liability.  Seller  shall  have  provided  to
               -----------------------------
Purchaser a statement from the Commissioner of the Michigan  Employment Security
Commission  certifying  the  status of  Seller's  contribution  liability  under
Section 15(g) of the Michigan Employment Security Act, MCLA 421.15(g).

         6.6.  Deliveries.  Seller shall have delivered to Purchaser the General
               ----------
Assignment,   the  Warranty  Deed,  the  other   Assignment   Instruments,   the
Non-Competition Agreement, the License Agreement and the Limited Guaranty.

         6.7.  Title  Insurance.  Purchaser  shall  have  received  a final  or
               ----------------
"marked-up"  policy of title  insurance,  insuring  Purchaser's  interest in the
owned Real Property in the condition required hereunder.

         6.8. No Material Adverse Effect. Between the date of this Agreement and
              -------------------------- 
the Closing Date there shall not have occurred any damage to, or destruction of,
any  Purchased  Asset  including  the Real  Property,  whether or not covered by
insurance,  which, in the aggregate, would have a material adverse effect on the
Business or the  Purchased  Assets,  nor shall there have  occurred any event or


                                      -17-



                                                             Page 27 of 44 Pages

condition which has had or may reasonably be expected to have a material adverse
effect on the  Business  or the  Purchased  Assets.  The failure to be awarded a
contract  pursuant to any bid  submitted by the Seller shall not be deemed to be
material.

         6.9.  Consent.  Consent  shall have been  obtained to the  transfer and
               -------
assignment  of those  Contracts  and  Commitments  which are  contracts  for the
manufacture  and sale of buses as described in Schedule 6.9,  unless,  as to any
                                               ------------   
such Contract and  Commitment,  Purchaser and Seller shall  otherwise  have made
satisfactory  arrangements  for  Purchaser  to  receive  the  benefits,  rights,
obligations  and duties under such Contracts and  Commitments in accordance with
Section 1.2(c)(i) hereof.


                                   ARTICLE 7.

                       CONDITIONS TO OBLIGATIONS OF SELLER
                       -----------------------------------

          The obligations of Seller  hereunder to sell the Purchased  Assets are
subject to the fulfillment,  at the Closing, of each of the following conditions
(all or any of which  may be  waived  in whole or in part by  Seller in its sole
discretion):

         7.1. Representations and Warranties. The representations and warranties
              ------------------------------ 
made by  Purchaser in this  Agreement  shall be true and correct in all material
respects on the Closing Date.

         7.2. Performance.  Purchaser shall have performed and complied with, in
              ----------- 
all material  respects,  the agreements,  covenants and obligations  required by
this Agreement to be so performed or complied with by Purchaser at the Closing.

         7.3. Officers' Certificate.  Purchaser shall have delivered to Seller a
              --------------------- 
certificate,  dated the Closing Date and  executed on its behalf by  appropriate
officers  of the  Purchaser,  substantially  in the  form and to the  effect  of
Exhibit 7.3 hereto.

         7.4. HSR Act. The waiting  period  imposed under the HSR Act shall have
              ------- 
expired or been terminated.

         7.5. Deliveries. Purchaser shall have paid to Seller the Purchase Price
              ---------- 
and delivered to Seller the Assumption Agreement.

         7.6.  Consent.  Consent  shall have been  obtained to the  transfer and
               -------
assignment  of those  Contracts  and  Commitments  which are  contracts  for the
manufacture  and sale of buses as described in Schedule 6.9,  unless,  as to any
                                               ------------   
such Contract and  Commitment,  Purchaser and Seller shall  otherwise  have made
satisfactory  arrangements  for  Purchaser  to  receive  the  benefits,  rights,
obligations  and duties under such Contracts and  Commitments in accordance with
Section 1.2(c)(i) hereof.



                                      -18-



                                                             Page 28 of 44 Pages


                                   ARTICLE 8.

                                EMPLOYEE MATTERS
                               ------------------

         8.1.  Employees of the Business;  Termination.  All of the employees of
               ---------------------------------------
the Business,  including  but not limited to for this purpose,  employees of the
Business  who are not in active  employment  status but who on the Closing  Date
have rights to return to employment  under Seller's  policies (such as employees
on an approved medical or disability leave of absence,  approved  personal leave
of absence or  employees  having  recall  rights  pursuant  to a written  layoff
policy,  etc.), shall cease their employment with Seller as of the Closing Date.
Purchaser shall have the right, but not the obligation, to offer employment with
Purchaser  to any one or more of such  terminated  employees  of the Business on
terms and conditions acceptable to Purchaser.

         8.2.  Employment Claims.
               -----------------

                  (a) Claims Filed For Seller's  Actions  Prior to Closing Date.
                      ---------------------------------------------------------
Seller  shall be  responsible  and liable for any  claim,  complaint,  charge or
lawsuit which is filed before or after the Closing Date by (i) an individual who
was employed by Seller prior to the Closing Date and (ii) alleges a violation of
a federal, state, county, local or other governmental law, decree,  ordinance or
regulation  which pertains to an act or event that occurred prior to the Closing
Date and  relates to  employment  or  employment  practices,  including  but not
limited to any claim,  complaint,  charge or lawsuit relating to discrimination,
harassment,  unequal  pay,  handicap  access,  and whether  brought  pursuant to
statute, in tort, contract or otherwise. Seller and Purchaser shall cooperate in
good  faith to  develop  strategies  to deal with any such  claims,  complaints,
charges or  lawsuits  which  will  minimize  each  party's  potential  exposure.
Purchaser shall not consent to any settlement of nor concede any issue regarding
such claims,  complaints,  charges or lawsuits  which affects Seller without the
prior  written  consent  of  Seller,  which  consent  shall not be  unreasonably
withheld.  In the event that any matters  contemplated  by Section 8.2(a) occur,
Purchaser will provide Seller with any information,  material or documents which
Seller shall request as part of its defense.

                  (b) Claims  Filed For  Purchaser's  Actions  After the Closing
                      ----------------------------------------------------------
Date. Purchaser shall be responsible and liable for any claim, complaint, charge
----
or lawsuit  which is filed after the Closing  Date and alleges a violation  of a
federal,  state, county,  local or other governmental law, decree,  ordinance or
regulation  which  pertains to an act or event that occurred on or following the
Closing Date and relates to employment or  employment  practices,  including but
not limited to claims of failure to hire from Seller. Seller and Purchaser shall
cooperate  in good faith to  develop  strategies  to deal with any such  claims,
complaints,  charges or lawsuits  which will  minimize  each  party's  potential
exposure.  Seller shall not consent to any  settlement  of nor concede any issue
regarding such claims,  complaints,  charges or lawsuits which affects Purchaser
without the prior  written  consent of  Purchaser,  which  consent  shall not be
unreasonably  withheld.  Seller  shall  not  be  liable  to  Purchaser  for  any
employment actions taken or omitted to be taken by Purchaser,  even if Purchaser
is merely continuing in practices  previously engaged in by Seller. In the event
that any matters  contemplated  by Section  8.2(b)  occur,  Seller will  provide
Purchaser with any  information,  material or documents  which  Purchaser  shall
request as part of its defense.


                                      -19-



                                                             Page 29 of 44 Pages


         8.3. Worker's  Compensation Claims and Worker's  Occupational  Diseases
              ------------------------------------------------------------------
Claim.  Seller shall be responsible  when it is adjudicated or  administratively
-----
determined  liable  for any claim  which may be  asserted  by  employees  of the
Business  which  arose  under  the  worker's  compensation  or other  applicable
occupational  disease and  disablement  statutes (or any similar  statutes)  and
regulations  thereof of the State of Michigan and is based on a reported  injury
sustained while employed by Seller.  Purchaser  shall be responsible  when it is
adjudicated  or  administratively  determined  liable for any claim which may be
asserted  by  employees   of  the  Business   which  arose  under  the  worker's
compensation or other applicable  occupational  disease and disablement statutes
(or any similar  statutes) and regulations  thereof of the State of Michigan and
is based on a reported injury sustained while employed by Purchaser.

         8.4. Severance. Purchaser shall not be responsible for severance pay to
              --------- 
any  employee  of the  Business  who  declines  any  offer of  employment,  upon
comparable terms, job description and compensation as currently provided to such
employee  by  Seller,  that  may  be  made  by  Purchaser.  Purchaser  shall  be
responsible for severance pay to any employee  (other than the employees  listed
on Schedule 8.4 hereto) of the  Business  who declines any offer of  employment,
   ------------  
which is upon terms, job description and/or  compensation less favorable than as
currently provided to such employee by Seller,  that may be made by Purchaser or
who is not offered employment by Purchaser.

         8.5. Other Agreements,  Plans,  Understandings and Practice. Subject to
              ------------------------------------------------------ 
the  provisions of Article 9, unless  reflected on the Audited  Closing  Balance
Sheet or otherwise specifically assumed by Purchaser in Section 1.3(a) hereof or
in the  above  provisions  of  Article  8,  Seller  shall  retain  any  and  all
obligations or liabilities with respect to any agreement, plan, understanding or
practice of Seller which provided or promised a payment, benefit,  contribution,
prerequisite  or service to any  employee  of the  Business  ("Employee  Benefit
Plans")  while an  employee  of Seller and shall  indemnify  and hold  Purchaser
harmless from and against all claims related  thereto with respect to any former
employee of Seller who becomes an employee of  Purchaser;  and  Purchaser  shall
indemnify  and hold  Seller  harmless  from and  against  any and all  claims of
employees,  whether or not hired by Purchaser,  related in any way to any matter
specifically assumed by Purchaser in Article 8 hereof.

         8.6.  Termination or Layoffs.
               ----------------------

                  (a) With respect to the  termination or layoff of any employee
of the Business hired by Purchaser after the Closing Date, Purchaser will comply
fully  with  the  Worker  Adjustment  and  Retraining  Notification  Act of 1988
("WARN").

                  (b)  Prior  to the  date  hereof,  Seller  has  terminated  30
employees,  and Seller  currently  employs as of the date hereof 322  employees.
Purchaser hereby  represents and warrants that it shall hire a sufficient number
of Seller's  employees such that Seller shall not incur any WARN  liability.  In
the event these representations are or become untrue or inaccurate,  whether due
to  misrepresentation,  change of circumstances  or otherwise,  Purchaser hereby
assumes and agrees to pay any WARN liability caused by such inaccuracy and holds
Seller harmless from all liability in connection therewith.



                                      -20-



                                                             Page 30 of 44 Pages


                                   ARTICLE 9.

                            TERMINATION OF AGREEMENT

         9.1. Events of Termination.  This Agreement may be terminated,  and the
              --------------------- 
transactions  contemplated  hereby  may be  abandoned,  at any time prior to the
Closing Date:

                  (a) by the mutual consent of the Seller and Purchaser;

                  (b) by Purchaser,  if Seller breaches in any material  respect
any of its  representations,  warranties,  covenants or agreements  contained in
this Agreement;

                  (c) by Seller,  if Purchaser  breaches in any material respect
any of its  representations,  warranties,  covenants or agreements  contained in
this Agreement or if Seller elects to exercise its right of termination pursuant
to Section 1.3(a)(ii) hereof;

                  (d) by either Purchaser or Seller, if any of the conditions to
Closing  is not  fulfilled  (or  waived  by the  party  for  whose  benefit  the
conditions exist) on or prior to the Closing Date; provided that a party may not
terminate this Agreement pursuant to this provision if such party is in material
breach of any of its covenants or agreements contained in this Agreement; or

                  (e) by  either  Purchaser  or Seller  if the  Closing  has not
occurred by February 16, 1998.

         9.2. Effect of Termination.  In the event that either party shall elect
              --------------------- 
to terminate this Agreement pursuant to any provision contained herein expressly
giving such party the right to terminate this  Agreement,  this Agreement  shall
forthwith terminate and have no further effect, and neither party shall have any
further  obligation or liability (except with respect to those provisions hereof
which expressly survive any termination of this Agreement).  Notwithstanding the
foregoing,  the termination of this Agreement  pursuant to any provision  hereof
shall not relieve any party of any liability for a breach of any  representation
or warranty, or nonperformance of any covenant or obligation hereunder,  and any
such  termination  shall not be deemed to be a waiver of any  available  remedy,
including specific performance, for any such breach or nonperformance.


                                   ARTICLE 10.

               SURVIVAL; NO OTHER REPRESENTATIONS; INDEMNIFICATION

         10.1.  Survival.   All  representations,   warranties,   covenants  and
                --------    
agreements  contained in this  Agreement or in any document  delivered  pursuant
hereto  shall  survive  the  Closing,  and,  as  to  all  such  representations,
warranties, covenants and agreements contained in this Agreement, shall continue
in full force and effect for a period of 18 months  following  the Closing  Date
(the  "Survival  Period");  provided that the Survival  Period shall be extended
automatically  to include any time period  necessary to resolve a specific claim


                                      -21-



                                                             Page 31 of 44 Pages

for indemnification  which was made before the expiration of the Survival Period
but not resolved  prior to its  expiration;  and provided  further than any such
extension  shall apply only as to claims asserted and not so resolved within the
Survival  Period.  Notwithstanding  anything  contained  herein to the contrary,
including  the  foregoing,  the  Survival  Period  shall not  apply to  Seller's
obligations  to indemnify  Purchaser  from any liability with regard to Excluded
Liabilities  or Purchaser's  obligations to indemnify  Seller from any liability
with regard to Assumed  Liabilities,  and the indemnifications set forth in this
Article to the extent they pertain thereto, which shall survive without temporal
limitation.

         10.2.  Indemnification.
                ---------------

                  (a) Seller shall  indemnify and hold harmless  Purchaser,  and
its  officers,   directors,  owners,  employees,  agents,   representatives  and
Affiliates,  from and  against  any and all  Damages  related  to,  caused by or
arising from any misrepresentation, breach of warranty or failure to fulfill any
covenant or agreement by Seller, including any failure of Seller to fully pay or
satisfy any of the Excluded Liabilities of Seller.

                  (b) Purchaser  shall indemnify and hold harmless  Seller,  and
its  officers,   directors,  owners,  employees,  agents,   representatives  and
Affiliates,  from and  against  any and all  Damages  related  to,  caused by or
arising from any misrepresentation, breach of warranty or failure to fulfill any
covenant or  agreement  by Purchaser  and  contained  herein for which notice is
given as provided in Section 10.4 hereof.

         10.3.  Limitations  on Seller's  Indemnification.  Seller  shall not be
                -----------------------------------------
liable and Purchaser agrees not to enforce any claim for  indemnification  under
this Agreement  until the aggregate  amount of all such claims exceeds 2-1/2% of
the cash  portion of the  Purchase  Price  (the  "Threshold  Amount"),  and then
Purchaser  shall be entitled to recover only the amount of such claims in excess
of the Threshold  Amount.  Purchaser shall provide Seller with written notice of
all claims included in the Threshold Amount. The maximum aggregate  liability of
Seller for Damages of every kind and  character  arising  under or in connection
with  this  Agreement  and  the  transactions   contemplated  hereby,  including
indemnification,  shall be equal to the amount of the 50% of the cash portion of
the Purchase  Price. In determining the amount subject to any claim, if any, for
indemnification  against Seller hereunder,  the amount of any insurance proceeds
received  by  Purchaser  shall be  deducted  from  the  amount  of the  required
indemnification payments.

         10.4. Notice of Indemnification  Claim.  Following the assertion of any
               --------------------------------
claim by a third party or the  occurrence  of any event or the  discovery of any
facts or conditions  which could  reasonably be expected to give rise to a claim
for  indemnification  from an indemnifying party (the  "Indemnitor")  under this
Article 10, an  indemnified  party (the  "Indemnitee")  shall within thirty days
notify the  Indemnitor  in writing of such claim,  setting  forth in  reasonable
detail  the  specific  facts and  circumstances  relating  to such claim and the
amount of Damages  claimed (or an estimate  thereof if the actual  amount is not
known or not capable of reasonable calculation) (an "Indemnification Notice"). A
delay in giving  notice  shall only  relieve the  recipient  of liability to the
extent the recipient suffers actual prejudice because of the delay.

         10.5. Third Party Claims. If the facts or conditions giving rise to the
               ------------------
right of indemnification  under this Article 10 involve any actual or threatened


                                      -22-



                                                             Page 32 of 44 Pages

claim or demand by a third party  against  Seller or  Purchaser  (a "Third Party
Claim"),  the Indemnitor  shall have thirty (30) days  following  receipt of the
Indemnification  Notice in  respect  of such  Third  Party  Claim to advise  the
Indemnitee whether the Indemnitor  disputes or accepts, in whole or in part, its
liability to the Indemnitee and/or whether the Indemnitor  desires to defend the
Indemnitee against such Third Party Claim. Assuming the Indemnitor is liable for
any properly notified Third Party Claim, the Indemnitor shall have no obligation
to the Indemnitee  for legal fees incurred by the Indemnitee  prior to or during
such  thirty day period in  connection  with such Third  Party  Claim other then
minimum legal costs incurred to avoid a default  judgment and/or to maintain the
status quo. In the event the Indemnitor  determines to accept the defense of any
such Third Party Claim, the Indemnitee shall have the right to be represented by
its own counsel,  its participation to be subject to the reasonable direction of
the  Indemnitor,  and the  Indemnitee  shall provide all  requested  waivers and
authorities  to permit the  Indemnitor  to defend such Third Party Claim.  Where
Indemnitee has accepted  defense of a claim,  Counsel selected by the Indemnitee
to act on its  behalf in the  defense  of a Third  Party  Claim  shall be at the
Indemnitee's  sole cost and expense.  If the  Indemnitor  fails to undertake the
defense  of or settle or pay any  Third  Party  Claim  within  thirty  (30) days
following receipt of the  Indemnification  Notice in respect of such Third Party
Claim, or if the Indemnitor,  after having given  notification to the Indemnitee
that it intends to assume the defense,  fails  within  thirty (30) days from its
receipt of the Indemnification  Notice to defend, settle or pay such Third Party
Claim,  then the Indemnitee may take any and all necessary actions to dispose of
the Third Party Claim including the settlement or full payment thereof upon such
terms as it shall deem appropriate, in its sole discretion.  Notwithstanding the
foregoing, the Indemnitee shall have the right to employ separate counsel in any
such claim or  proceeding  and the fees and expenses of such counsel shall be at
the expense of such  Indemnitor  if: (i) the  Indemnitor  has failed to promptly
assume  the  defense  and employ  counsel or (ii) the named  parties to any such
claim or proceeding  (including any impleaded  parties)  include such Indemnitee
and any of the  Indemnitors,  and such Indemnitee shall have been advised by its
counsel that there may be one or more legal  defenses  available to it which are
different  from or in addition  to those  available  to any of the  Indemnitors;
provided,  however that the  Indemnitors  shall not in such event be responsible
hereunder for the fees and expenses of more than one firm of separate counsel in
connection with any claim or proceeding.

         10.6. Other Indemnification  Claims. Except for Third Party Claims, the
               -----------------------------
Indemnitor  shall have twenty (20) days to advise the  Indemnitee  of whether it
disputes or accepts  liability to the indemnitee  for all other  indemnification
claims  that are the  subject  of an  Indemnification  Notice  delivered  to the
Indemnitor as provided in Section 10.4 above.

         10.7.  Reimbursement.  At the  time the  amount  of  Damages  suffered,
                -------------
incurred or  sustained by the  Indemnitee  is  determined  (which in the case of
payment of any judgment  shall be the earlier of (i) the date of such payment or
(ii)  the  date  that a court  of  competent  jurisdiction  shall  enter a final
judgment,  order or decree (after exhaustion of appeal rights) establishing such
Damages),  the Indemnitor shall, within thirty (30) days from receipt of written
notice  from the  Indemnitee,  pay to the  Indemnitee  the amount of the Damages
associated with such indemnification  claim. The obligation of the Indemnitor to
pay for reasonable  legal fees and costs associated with a Third Party Claim for
which Indemnitor admits liability and which the Indemnitee is defending shall be


                                      -23-



                                                             Page 33 of 44 Pages

satisfied  within  thirty  (30) days of the  Indemnitor's  receipt of an invoice
therefor accompanied by documents from the third party submitting the expense or
proof of payment by the Indemnitee.

         10.8.   No   Other   Representations;    Limitations   on   Breach   of
                 ---------------------------------------------------------------
Representations and Warranties.
------------------------------

                   (a)  Notwithstanding  anything to the  contrary  contained in
this  Agreement,  Purchaser  acknowledges  and agrees  that  Seller is making no
representations or warranties  whatsoever,  express or implied,  with respect to
the Purchased Assets or the Business,  the transactions  contemplated  hereby or
under the Related  Agreements or any matter related thereto,  except that Seller
has made the representations and warranties contained in Article 2 and Article 8
hereof.  Subject to such  representations and warranties,  it is understood that
Purchaser  takes the Business and the Purchased  Assets on an "as is" and "where
is" basis.

                   (b)  Notwithstanding   anything  to  the  contrary  contained
herein, it is the explicit intent of each party hereto that Purchaser shall have
no indemnification claim under this Agreement and the Related Agreements, and no
other remedy shall be had in contract,  tort or  otherwise,  for any  individual
claim,  or any series or group of related  claims,  insofar as a  Purchaser  had
actual  knowledge  of facts or  conditions  on or prior to the Closing Date that
would or could be reasonably  likely to cause or constitute a breach of Seller's
representations, warranties or covenants contained herein and would give rise to
an indemnification claim under this Article 10 in respect of any such breach (an
"Excluded Indemnification Claim").  Purchaser hereby agrees and expressly waives
any right or entitlement to indemnification  under this Article 10 and any other
remedy  in   contract,   tort  or   otherwise,   in  respect  of  any   Excluded
Indemnification Claim.

         10.9.  Limited  Guaranty.  Seller  shall  cause its  corporate  parent,
                -----------------
Champion  Enterprises,  Inc.,  to execute and deliver at the time of Closing,  a
guaranty  of  payment  ("Limited  Guaranty")  of  the  Seller's  indemnification
obligations arising under Article 10 hereunder, limited in all events to maximum
aggregate  amount of 50% of the cash portion of the Purchase Price.  The Limited
Guaranty shall be in the form of Exhibit 10.9 attached hereto.


                                   ARTICLE 11.

                                   DEFINITIONS

         11.1.  Definitions.

                  (a) Defined Terms.  As used in this  Agreement,  the following
                      -------------   
defined terms have the meanings indicated below:

         "Accounts  Receivable"  has  the  meaning  ascribed  to it  in  Section
          --------------------
1.2(a)(i).

         "Actions  or   Proceedings"   means  any  action,   suit,   proceeding,
          -------------------------
arbitration or Governmental or Regulatory Authority investigation.


                                      -24-



                                                             Page 34 of 44 Pages


         "Affiliate,"  of a given  Person,  means any Person that  directly,  or
          ---------
indirectly through one of more  intermediaries,  controls or is controlled by or
is under common control with such given Person. For purposes of this definition,
"control"  of a Person means the power,  direct or indirect,  to direct or cause
the direction of the management and policies of such Person, whether by Contract
or otherwise.

         "Agreement"  means this Asset  Purchase  Agreement,  together  with the
          ---------
Schedules and Exhibits hereto.

         "Assignment Instruments" has the meaning ascribed to it in Section 1.5.
          ----------------------

         "Assumed Liabilities" has the meaning ascribed to it in Section 1.3(a).
          -------------------

         "Assumption Agreement" has the meaning ascribed to it in Section 1.5.
          --------------------

         "Assumption Instruments" has the meaning ascribed to it in Section 1.5.
          ----------------------

         "Business"  has the  meaning  ascribed  to it in the  forepart  of this
          --------
Agreement.

         "Books  and  Records"  has  the  meaning  ascribed  to  it  in  Section
          -------------------
1.2(b)(vii).

         "Business  Day" means a day other than  Saturday,  Sunday or any day on
          -------------
which banks  located in the State of Michigan  are  authorized  or  obligated to
close.

         "Closing" means the closing of the transactions contemplated by Section
          -------
1.5.

         "Closing Adjustment" has the meaning ascribed to it in Section 1.4(b).
          ------------------

         "Closing Date" has the meaning ascribed to it in Section 1.5.
          ------------

         "COBRA" means the  Consolidated  Omnibus Budget  Reconciliation  Act of
          -----
1986.

         "Code" means the Internal  Revenue  Code of 1986,  as amended,  and the
          ----
rules and regulations promulgated thereunder.

         "Condition  of  the  Business"  means  the  overall  business  and  the
          ----------------------------
financial condition and results of operations of the Business, taken as a whole.

         "Contract"  means  any  oral  or  written  agreement,  lease,  license,
          --------
evidence of Indebtedness,  mortgage,  indenture,  security  agreement,  or other
contract,  instrument or  arrangement  to which a Seller is a party and which is
utilized solely in the conduct of the Business.

         "Contracts and  Commitments"  has the meaning ascribed to it in Section
          --------------------------
1.2(a)(v).

         "Damages"  means  the  net  amount,   after  taking  into  account  all
          -------
recoveries and all tax benefit  effects,  of all liabilities,  damages,  losses,


                                      -25-



                                                             Page 35 of 44 Pages

penalties,  fines,  assessments,  claims, costs and expenses including interest,
amounts  paid in  settlement,  court  costs,  reasonable  attorneys'  fees,  and
consultants' and experts' fees.

         "Employee Benefit Plans" has the meaning ascribed to it in Section 8.5.
          ----------------------

         "Encumbrance" has the meaning ascribed to it in Section 2.6.
          -----------

         "Environmental Laws" has the meaning ascribed to it in Section 1.3(b).
          ------------------

         "Environmental  Liabilities"  has the meaning ascribed to it in Section
          --------------------------
1.3(b).

         "Equipment   Leases"  has  the  meaning   ascribed  to  it  in  Section
          ------------------
1.3(a)(iv).

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
          -----
amended, and the rules and regulations promulgated thereunder.

         "Excluded Assets" has the meaning ascribed to it in Section 1.2(b).
          ---------------

         "Excluded  Indemnification  Claim" has the  meaning  ascribed  to it in
          --------------------------------
Section 10.9(b).

         "Excluded  Inventory"  has  the  meaning  ascribed  to  it  in  Section
          -------------------     
1.2(b)(ii).

         "Excluded  Intellectual  Property"  has the  meaning  ascribed to it in
          --------------------------------
Section 1.2(b)(iii).

         "Excluded  Liabilities"  has  the  meaning  ascribed  to it in  Section
          ---------------------
1.3(b).

         "GAAP" means generally accepted accounting principles.
          ----

         "General Assignment" has the meaning ascribed to it in Section 1.5.
          ------------------

         "Governmental  or  Regulatory  Authority"  means any  court,  tribunal,
          ---------------------------------------
arbitrator,  authority, agency, commission, official or other instrumentality of
any country or multinational  organization,  or any state, county, city or other
political subdivision.

         "HSR Act" has the meaning ascribed to it in Section 2.3.
          -------

         "Hold Back Amount" has the meaning ascribed to it in Section 1.4(a).
          ----------------

         "Indebtedness" means all obligations of a given Person (a) for borrowed
          ------------
money or (b) in the nature of the  guarantees  of the  obligations  described in
clause (a) of any other Person.

         "Indemnification  Notice"  has the  meaning  ascribed  to it in Section
          -----------------------
10.4.


         "Indemnitee"  means  any  Person  claiming  indemnification  under  any
          ----------
provision of Article 10.


                                      -26-



                                                             Page 36 of 44 Pages


         "Indemnitor"   means,  with  respect  to  a  given  claim  of  a  given
          ----------
Indemnitee,  the Person  against which such claim for  indemnification  is being
asserted.

         "Intellectual  Property"  means all  trademarks  and trademark  rights,
          ----------------------
trade  names and trade name  rights,  service  marks and  service  mark  rights,
copyrights and copyright rights,  trade dress,  patents,  trade secrets, and all
pending  applications for and registrations of copyrights,  all product designs,
licenses,  franchises,  memberships,  permits, trade secrets,  inventions, "know
how," common law rights,  privileges  and general  intangibles  and all goodwill
relating  to any of the  foregoing  held  or used by the  Seller  solely  in the
conduct of the Business.

         "Inventory" has the meaning ascribed to it in Section 1.2(a)(ii).
          ---------

         "Knowledge of Seller" means the actual  knowledge of the Persons listed
          -------------------
on Schedule 11.1(a)-1 annexed hereto.

         "Knowledge  of  Purchaser"  means the actual  knowledge  of the Persons
          ------------------------
listed on Schedule 11.1(a)-2 annexed hereto.

         "Laws"  means  all  material  laws,   statutes,   rules,   regulations,
          ----
ordinances and other pronouncements having the effect of law in any jurisdiction
or  multinational  organization  or any state,  county,  city or other political
subdivision or of any Governmental or Regulatory Authority.

         "Liability" or "Liabilities" means any or all Indebtedness, obligations
          ---------      -----------
and other  liabilities of a Person (whether known or unknown,  whether absolute,
accrued, contingent, fixed or otherwise, and whether due or to become due).

         "Licenses"  means all  licenses,  permits,  certificates  of authority,
          --------
authorizations,   approvals,  registrations,  franchises  and  similar  consents
granted or issued by any Governmental or Regulatory Authority.

         "Liens"  means  any  debt,  mortgage,  pledge,   assessment,   security
          -----
interest,  lease,  lien, adverse claim, levy, charge or other encumbrance of any
kind,  or any  conditional  sale  Contract,  title  retention  Contract or other
Contract to give any of the foregoing.

         "Order" means any writ, judgment,  decree,  injunction or similar order
          -----
of  any  Governmental  or  Regulatory  Authority  (in  each  such  case  whether
preliminary or final).

         "Permitted Encumbrances" has the meaning ascribed to it in Section 2.7.
          ----------------------

         "Person" means any natural person,  corporation,  general  partnership,
          ------
limited partnership,  proprietorship, other business organization, trust, union,
association or Governmental or Regulatory Authority.

         "Pre-Closing  Tax Period"  means any Tax period ending on or before the
          -----------------------
close of business on the Closing  Date and,  with respect to any Tax period that
commences  before but ends after the Closing Date, the portion of such period up
to the close of business on the Closing Date.

                                      -27-



                                                             Page 37 of 44 Pages



         "Purchase Price" has the meaning ascribed to it in Section 1.4(a).
          --------------

         "Purchase  Price  Estimate"  has the meaning  ascribed to it in Section
          -------------------------
1.4(a).

         "Purchased Assets" has the meaning ascribed to it in Section 1.2(a).
          ----------------

         "Purchaser"  has the  meaning  ascribed  to it in the  forepart of this
          ---------
Agreement.

         "Real Property"  means all real property listed on Schedule  1.2(a)(vi)
          -------------
annexed  hereto  owned  in  fee  simple  by  Seller  and  all  plants,  offices,
manufacturing or remanufacturing facilities,  warehouses,  buildings, structures
and improvements  located thereon, and all mineral rights, oil wells, leases and
rentals with respect thereto.

         "Related  Agreement"  means all  agreements,  contracts,  certificates,
          ------------------
instruments or other documents required to executed and/or delivered pursuant to
or in connection with this Agreement by any Person.

         "RV Business" has the meaning ascribed to it in Section 1.3(b).
          -----------    

         "RV Liabilities" has the meaning ascribed to it in Section 1.3(b).
          --------------

         "Seller"  has  the  meaning  ascribed  to it in the  forepart  of  this
          ------
Agreement.

         "Seller Savings Plan" has the meaning ascribed to it in Section 8.1(b).
          -------------------

         "Seller  Welfare  Benefit  Plans"  has the  meaning  ascribed  to it in
          -------------------------------
Section 8.1(c).

         "Survival Period" has the meaning ascribed to it in Section 10.1.
          ---------------

         "Tangible  Personal Property" has the meaning ascribed to it in Section
          ---------------------------
1.2(a)(iv).

         "Tax Returns" means a report,  return or other  information  (including
          -----------
any  amendments)  required  to be supplied to any  Governmental  Authority  with
respect  to  Taxes   including,   where  permitted  or  required,   combined  or
consolidated returns for any group of entities.

         "Taxes"  means any federal,  state,  county,  local or foreign  income,
          -----
gross receipts,  franchise, sales, use, excise, gains, value added, withholding,
employment,  payroll,  social  security,  property  and all  other  taxes of any
nature, fees, levies,  duties,  assessments,  deficiencies or charges imposed by
any  governmental  entity,  and includes any  interest and  penalties  (civil or
criminal)  on or  additions  to any such  taxes  and any  expenses  incurred  in
connection with the determination, settlement or litigation of any Taxes.

         "Third Party Claim" has the meaning ascribed to it in Section 10.5.
          -----------------

         "Threshold Amount" has the meaning ascribed to it in Section 10.3.
          ----------------

         "WARN" has the meaning ascribed to it in Section 8.6(a).
          ----

                                      -28-



                                                             Page 38 of 44 Pages



         "Warranty Deed" has the meaning ascribed to it in Section 1.5.
          -------------

                  (b)  Construction  of Certain  Terms and  Phrases.  Unless the
                       --------------------------------------------  
context of this Agreement  otherwise  requires,  (i) words of any gender include
each other  gender;  (ii) words using the singular or plural number also include
the plural or singular number, respectively; (iii) the terms "hereof," "herein,"
"hereby" and  derivative or similar words refer to this entire  Agreement;  (iv)
the terms "Article,"  "Section,"  "clause" or "subclause" refer to the specified
Article,  Section,  clause or  subclause of this  Agreement;  and (v) the phrase
"ordinary course of business" of a Person refers to the business of such Person.
Whenever this Agreement  refers to a number of days,  such number shall refer to
calendar days unless  Business Days are  specified.  All  accounting  terms used
herein and not expressly  defined  herein shall have the meanings  given to them
under  GAAP.  Any   representation  or  warranty  contained  herein  as  to  the
enforceability  of a Contract shall be subject to the effect of any  bankruptcy,
insolvency,  reorganization,  moratorium  or other  similar  law  affecting  the
enforcement of creditors' rights generally and to general  equitable  principles
(regardless  of whether such  enforceability  is  considered  in a proceeding in
equity or at Law).


                                   ARTICLE 12.

                                  MISCELLANEOUS

         12.1. Notices. All notices, consents, requests and other communications
               -------
hereunder must be in writing and shall be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:

                  If to Purchaser, to:

                  Thor Industries, Inc.
                  419 W. Pike Street
                  Jackson Center, Ohio  45334
                  Facsimile No.: (937) 596-6539
                  Attn:  President and Chief Executive Officer

                  with a copy to:

                  Akin, Gump, Strauss, Hauer & Feld, L.L.P.
                  590 Madison Avenue
                  New York, New York  10022
                  Facsimile No.: (212) 872-1002
                  Attn:  Alan Siegel, Esq.


                                      -29-



                                                             Page 39 of 44 Pages


                  If to Seller, to:

                  Champion Motor Coach, Inc.
                  c/o Champion Enterprises, Inc.
                  2701 University Drive, Suite 320
                  Auburn Hills, Michigan 48326-2566
                  Facsimile No.: (248) 340-9345
                  Attn:  President and Chief Executive Officer

                  with a copy to:

                  Miller, Canfield, Paddock and Stone, P.L.C.
                  1400 North Woodward, Suite 100
                  Bloomfield Hills, Michigan  48304
                  Facsimile No.: (248) 258-3036
                  Attn:  Ronald H. Riback, Esq.

All such  notices,  requests  and other  communications  shall (a) if  delivered
personally to the address as provided in this Section 12.1, be deemed given upon
delivery,  (b) if delivered by facsimile transmission to the facsimile number as
provided  in this  Section  12.1,  be  deemed  given  upon  receipt,  and (c) if
delivered  by mail in the manner  described  above to the address as provided in
this  Section  12.1 be deemed  given upon  receipt (in each case  regardless  of
whether such  notice,  request or other  communication  is received by any other
Person to whom a copy of such notice,  request or other  communication  is to be
delivered pursuant to this Section 12.1). Any party hereto from time to time may
change its address,  facsimile  number or other  information  for the purpose of
notices to that party by giving notice specifying such change to the other party
hereto.

         12.2. Bulk Sales Act. Purchaser hereby waives any requirement to comply
               --------------
with the bulk sales act or comparable  statutory  provisions of each  applicable
jurisdiction  and  indemnifies  Seller from any claims upon Assumed  Liabilities
arising on account of such noncompliance.

         12.3.  Entire  Agreement.  This  Agreement  and the Related  Agreements
                -----------------    
supersede  all prior  discussions  and  agreements  between or among the parties
hereto  with  respect to the subject  matter  hereof and thereof and contain the
sole and entire agreement between the parties hereto with respect to the subject
matter hereof and thereof.

         12.4.  Expenses.   Except  as  otherwise  expressly  provided  in  this
                --------
Agreement,  whether or not the transactions contemplated hereby are consummated,
each party hereto shall pay its own costs and  expenses  incurred in  connection
with the  negotiation,  execution and closing of this  Agreement and the Related
Agreements and the transactions contemplated hereby and thereby.

         12.5.  Waiver. Any term or condition of this Agreement may be waived at
                ------
any time by the party  that is  entitled  to the  benefit  thereof,  but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party  waiving such term or  condition.  No waiver by any
party  hereto of any term or  condition  of this  Agreement,  in any one or more
instances,  shall be  deemed to be or  construed  as a waiver of the same or any
other

                                      -30-



                                                             Page 40 of 44 Pages


term or condition of this Agreement on any future occasion. All remedies, either
under this  Agreement or by Law or otherwise  afforded,  shall be cumulative and
not alternative.

         12.6.  Amendment.  This  Agreement  may  be  amended,  supplemented  or
                ---------
modified  only by a written  instrument  duly  executed  by or on behalf of each
party hereto.

         12.7.  No Third Party  Beneficiary.  The terms and  provisions  of this
                ---------------------------
Agreement  are intended  solely for the benefit of the parties  hereto and their
respective  successors or permitted assigns,  and it is not the intention of the
parties hereto to confer third party beneficiary rights upon any other Person.

         12.8.  No Assignment  Binding  Effect.  Neither this  Agreement nor any
                ------------------------------
right,  interest or  obligation  hereunder  may be assigned by any party  hereto
without the prior written consent of the other parties  hereto,  and any attempt
to do so shall be void.  Subject to the preceding  sentence,  this  Agreement is
binding upon,  inures to the benefit of and is enforceable by the parties hereto
and their respective successors and assigns.  Notwithstanding the foregoing, the
Purchaser shall have the right to assign its rights and  obligations  under this
Agreement  to any  wholly-owned  subsidiary  of  Purchaser,  provided  that such
assignment  shall  not  relieve  Purchaser  of  any  obligations  hereunder  and
provided,  further,  that with respect to any obligations of Purchaser hereunder
to be performed on or after the Closing Date  (including  execution and delivery
of the  Assumption  Agreement),  such  obligations  shall be  performed  by such
subsidiary  and  Purchaser  shall  provide  a  guaranty  of  such   subsidiary's
obligations.

         12.9.  Heading.  The headings used in this Agreement have been inserted
                -------
for  convenience  of  reference  only and do not define or limit the  provisions
hereof.

         12.10.  Invalid Provisions.  If any provision of this Agreement is held
                 ------------------
to be illegal,  invalid or unenforceable under any present or future Law, and if
the rights or obligations of any party hereto under this Agreement  shall not be
materially and adversely  affected  thereby,  (a) such provision  shall be fully
severable,  (b)  this  Agreement  shall be  construed  and  enforced  as if such
illegal,  invalid or unenforceable  provision had never comprised a part hereof,
(c) the remaining  provisions of this  Agreement  shall remain in full force and
effect  and shall not be  affected  by the  illegal,  invalid  or  unenforceable
provision or by its severance herefrom.

         12.11. Governing Law. This Agreement shall be governed by and construed
                -------------    
in accordance with the Laws of the State of Michigan to a contract  executed and
performed  in  such  State,  without  giving  effect  to the  conflicts  of laws
principles thereof.

         12.12.  Schedules and  Exhibits.  Disclosure of any fact or item in any
                 -----------------------   
Schedule or Exhibit hereto referenced by a particular Section shall,  should the
existence of the fact or item or its contents be relevant to any other  Section,
be deemed to be disclosed  with respect to such other Section  whether or not an
explicit  cross-reference  appears.  All  schedules  shall be  updated as of the
Closing.  The  Schedules  hereto  shall,  for all purposes be deemed to mean and
refer to the  Schedules  hereto,  as amended and  supplemented  by such  updated
Schedules.


                                      -31-



                                                             Page 41 of 44 Pages


         12.13.  Counterparts.  This  Agreement may be executed in any number of
                 ------------   
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument.

         12.14. Public Announcements: Confidentiality. Except as required by law
                -------------------------------------    
or governmental  regulation,  or the rules of the New York Stock  Exchange,  all
announcements  relating to this Agreement or the negotiations  relating to it or
transactions  contemplated in it, including announcements to employees,  will be
made only as may be agreed upon  jointly by  representatives  designated  by the
parties.  Until  the  Closing  Purchaser  agree  to  keep,  and to  cause  their
respective  representatives,   lenders  and  others  to  keep,  all  information
pertaining  to Seller and Seller's  Business  strictly  confidential,  except as
required by law.

         12.15. Name of Seller.  Immediately after the Closing, the Seller shall
                --------------
change its name to another name not confusingly similar to its present name, and
discontinue  any assumed name  certificates,  and shall take all other action as
may be required to permit Buyer,  subject to the terms of the License Agreement,
to file an assumed name  certificate  as to the name  "Champion  Motor Coach" or
"Champion Bus".



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                                      -32-



                                                             Page 42 of 44 Pages



         IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officer of each party as of the date first above written.


                                   CHAMPION MOTOR COACH, INC.


                                   By:  /S/ JACQUELINE DOUT
                                        ---------------------------------------
                                        Name:     JACQUELINE DOUT
                                        Title:    VICE PRESIDENT OF FINANCE


                                   THOR INDUSTRIES, INC.


                                   By:  /S/ PETER B. ORTHWEIN
                                        ---------------------------------------
                                        Name:     PETER B. ORTHWEIN
                                        Title:    VICE PRESIDENT, TREASURER
                                                  AND DIRECTOR


                                      -33-