EXHIBIT 10


                                                                  EXECUTION COPY


                AMENDMENT AND WAIVER NO. 4 TO THE LOAN DOCUMENTS

                                                              As of May 25, 1999

                  AMENDMENT AND WAIVER NO. 4 TO THE LOAN  DOCUMENTS  dated as of
May 25, 1999 to the Credit  Agreement  dated as of November 26, 1997 (as amended
and  otherwise  modified by  Amendment  and Waiver No. 1 dated as of January 23,
1998,  Letter  Waiver No. 2 dated as of April 9, 1998 and Amendment No. 3 to the
Loan  Documents  dated as of May 26, 1998,  the "Credit  Agreement")  among Desa
International,  Inc., a Delaware  corporation  (the  "Borrower"),  Desa Holdings
Corporation, a Delaware corporation (the "Parent Guarantor"), the Lender Parties
party thereto,  UBS Securities  LLC, as a Co- Arranger and  Documentation  Agent
thereunder,  Banc of America  Securities  LLC (formerly  NationsBanc  Montgomery
Securities  LLC),  as  a  Co-Arranger  and  Syndication   Agent  thereunder  and
NationsBank,  N.A., as Administrative Agent (the "Administrative Agent") for the
Lender Parties thereunder.  Capitalized terms not otherwise defined herein shall
have the same meanings as specified therefor in the Credit Agreement.


                             PRELIMINARY STATEMENTS

                  (1) The Borrower has requested  that the Lender  Parties agree
(a) to amend the Credit  Agreement and the other Loan Documents in order,  among
other things,  (i) to permit the establishment of an unsecured line of credit to
the Borrower from NationsBank,  N.A. (the "Childs Guaranteed Line of Credit") in
an aggregate  principal amount of up to $15,000,000,  which line of credit shall
be available for two years and all amounts  outstanding  from time to time under
which shall be unconditionally and irrevocably  guaranteed by J.W. Childs Equity
Partners,  L.P.,  and (ii) to modify the  requirements  of each of the financial
covenants  set forth in  Section  5.04 of the Credit  Agreement  for each of the
remaining  Measurement  Periods  through the Term B Termination  Date and (b) to
waive any and all  Defaults  and Events of Default  under  Section  6.01(c)  and
6.01(d) of the Credit  Agreement  that have  occurred  and are  continuing  as a
result of the failure by the Borrower or the Parent  Guarantor,  as the case may
be, to comply with the  requirements of Section 2.01(g) of the Credit  Agreement
for the Clean-Up Period  occurring  between January 1, 1999 and May 30, 1999 and
the  requirements  set forth in Section  5.04(a) of the Credit  Agreement  for a
maximum Total  Leverage Ratio at all times during the  Measurement  Period ended
February 28, 1999.

                  (2) The Lender  Parties have  indicated  their  willingness to
agree, among other things, to the amendments and waivers of the Credit Agreement
described  above in  Preliminary  Statement  (1) on the terms and subject to the
satisfaction of the conditions set forth herein.

                  NOW,  THEREFORE,  in  consideration of the premises and of the
mutual  covenants and  agreements  contained  herein,  the parties hereto hereby
agree as follows:



<PAGE>


                                       -2-

                  SECTION  1.  Amendments  of Certain  Provisions  of the Credit
Agreement.  The  Credit  Agreement  is,  upon the  occurrence  of the  Amendment
Effective Date (as hereinafter defined), hereby amended as follows:


                  (a) The  definition  of  "Adjusted  Funded  Debt" set forth in
         Section 1.01 of the Credit Agreement is hereby amended (i) to add after
         the clause reference "(a)" in the second line thereof the new subclause
         reference  "(i)"  and  (ii)  to add  after  the  language  "the  Parent
         Guarantor Preferred Stock on such date" in the seventh line thereof the
         new language  "and (ii) the aggregate  principal  amount of all "Loans"
         outstanding under the Childs Guaranteed Line of Credit on such date".

                  (b) The definition of "Consolidated Cash Interest Expense" set
         forth in Section 1.01 of the Credit  Agreement is hereby amended to add
         after  the  language  "of such  Person  and its  Subsidiaries  for such
         period" in the third line thereof the new language "and, in the case of
         the  Borrower,  all interest  expense (net of interest  income) paid or
         payable on all "Loans"  outstanding under the Childs Guaranteed Line of
         Credit during such period".

                  (c) The  definition  of  "Consolidated  EBITDA"  set  forth in
         Section  1.01 of the  Credit  Agreement  is hereby  amended  to restate
         clause (d) thereof in its entirety to read as follows:

                  "(d)  the  pro  forma  cost  savings  and   operating   income
                  annualization  adjustments of $5,100,000  for the  Measurement
                  Period ending in February 1999, $3,600,000 for the Measurement
                  Period ending in May 1999 and $1,700,000  for the  Measurement
                  Period ending in August 1999".

                  (d) The definition of "Fixed Charge  Coverage Ratio" set forth
         in Section 1.01 of the Credit  Agreement  is hereby  amended to restate
         clause (a) thereof in its entirety to read as follows:

                  "(a) (i)  Consolidated  EBITDA of the Parent Guarantor and its
                  Subsidiaries for such period plus (ii) the aggregate principal
                  amount of all "Loans" made under the Childs Guaranteed Line of
                  Credit  during such period,  the proceeds of which are used to
                  pay or prepay outstanding Term Advances,  Acquisition Advances
                  and/or  Acquisition B Advances in accordance with the terms of
                  this Agreement, less (iii) the aggregate amount of all Capital
                  Expenditures made by the Parent Guarantor and its Subsidiaries
                  during such period."

                  (e) The  definition  of "Loan Value" set forth in Section 1.01
         of the  Credit  Agreement  is  hereby  amended  to  delete  the  figure
         "$15,000,000"  in  clause  (i) of the  proviso  clause  thereto  and to
         substitute therefor the new figure "$30,000,000".

                  (f) The following definitions set forth in Section 1.01 of the
         Credit  Agreement are hereby  amended and restated in their entirety to
         read as follows:

                           ""Applicable  Margin" means at any time and from time
                  to time,  a  percentage  per  annum  equal  to the  applicable
                  percentage set forth below for the Performance Level set forth
                  below:




<PAGE>


                                       -3-


<TABLE>
<CAPTION>
                          Alternate           Eurodollar            Alternate            Eurodollar
                          Base Rate              Rate               Base Rate               Rate
                          Advances             Advances             Advances              Advances
                            Under             Under Term           Under Term            Under Term
                         Term A and             A and            B, Acquisition        B, Acquisition
                           Working             Working                 and                   and
    Performance            Capital             Capital            Acquisition B         Acquisition B
       Level             Facilities           Facilities           Facilities            Facilities
<S>                        <C>                  <C>                  <C>                   <C>
         I                 0.500%               1.500%               1.125%                2.125%
         II                0.750%               1.750%               1.125%                2.125%
        III                1.000%               2.000%               1.375%                2.375%
         IV                1.500%               2.500%               1.750%                2.750%
         V                 2.000%               3.000%               2.250%                3.250%
         VI                2.250%               3.250%               2.500%                3.500%
</TABLE>

                  The  Applicable  Margin for each  Alternate  Base Rate Advance
                  shall be determined by reference to the  Performance  Level in
                  effect  from time to time and the  Applicable  Margin for each
                  Eurodollar  Rate Advance  shall be  determined by reference to
                  the  Performance  Level in  effect  on the  first  day of each
                  Interest Period for such Advance.

                           "Applicable  Percentage"  means, at any time and from
                  time to time, a percentage  per annum equal to the  applicable
                  percentage set forth below for the Performance Level set forth
                  below:


              Performance Level                              Commitment Fee
                      I                                          0.325%
                     II                                          0.375%
                     III                                         0.375%
                     IV                                          0.500%
                      V                                          0.500%
                     VI                                          0.500%

                  The  Applicable  Percentage  for the  Commitment  Fee shall be
                  determined  by  reference to the  Performance  Level in effect
                  from time to time.

                           "Performance   Level"  means   Performance  Level  I,
                  Performance Level II, Performance Level III, Performance Level
                  IV,  Performance  Level  V or  Performance  Level  VI,  as the
                  context  may  require.   For  purposes  of   determining   the
                  Performance Level at any date of



<PAGE>


                                       -4-

                  determination,  no change in the  Performance  Level  shall be
                  effective  until three  Business  Days after the date on which
                  the  Administrative  Agent  receives  Consolidated   financial
                  statements  of  the  Parent  Guarantor  and  its  Subsidiaries
                  pursuant  to  (and  satisfying  all  of the  requirements  of)
                  Section  5.03(c) or  5.03(d)  reflecting  such  change and the
                  related  certificate  pursuant  to  such  Section;   provided,
                  however, that if the Parent Guarantor has not submitted to the
                  Administrative  Agent all of the  information  required  under
                  this  definition as and when required under Section 5.03(c) or
                  5.03(d),  as the case may be, the  Performance  Level shall be
                  deemed  to be at  Performance  Level  VI for so  long  as such
                  information has not been submitted.

                           "Performance   Level  V"   means,   at  any  date  of
                  determination,  that (a) the  Performance  Level does not meet
                  the requirements of Performance Level I, Performance Level II,
                  Performance  Level  III or  Performance  Level  IV and (b) the
                  Parent Guarantor and its Subsidiaries  shall have maintained a
                  Senior  Leverage  Ratio of less than 4.00:1 as of the last day
                  of the most  recently  completed  Measurement  Period prior to
                  such date."

                  (g) Section  1.01 of the Credit  Agreement  is hereby  further
         amended to add the following new definitions:

                           ""Amendment  No. 4  Effective  Date"  means the first
                  date  on  which  all  of  the  conditions   precedent  to  the
                  effectiveness  of  Amendment  and  Waiver  No.  4 to the  Loan
                  Documents were satisfied.

                           "Childs   Guaranteed   Line  of  Credit"   means  the
                  unsecured  line of credit  to the  Borrower  from  NationsBank
                  (and/or its successors and assigns) in an aggregate  principal
                  amount  of up to  $15,000,000,  which  line  of  credit  has a
                  maturity date of May 31, 2001 and all amounts outstanding from
                  time to time under which are  unconditionally  and irrevocably
                  guaranteed by Childs.

                           "Childs     Guaranteed    LOC    Documents"    means,
                  collectively,  (a) the  credit  agreement  dated as of May 26,
                  1999  between the  Borrower  and  NationsBank,  as the initial
                  lender   thereunder,   (b)  all  promissory  notes  issued  to
                  NationsBank  (and, if applicable,  its successors and assigns)
                  and evidencing  indebtedness  of the Borrower under the Childs
                  Guaranteed  Line of Credit and (c) the guaranty  dated May 26,
                  1999 of Childs in favor of  NationsBank  (and, if  applicable,
                  its successors and assigns),  in each case as such  agreement,
                  instrument or other document may be amended,  supplemented  or
                  otherwise modified from time to time after the Amendment No. 4
                  Effective  Date  in  accordance  with  the  terms  hereof  and
                  thereof.

                           "Performance   Level  VI"  means,   at  any  date  of
                  determination,  that the  Performance  Level does not meet the
                  requirements  of Performance  Level I,  Performance  Level II,
                  Performance  Level III,  Performance  Level IV or  Performance
                  Level V."

                  (h) Section 2.01(g) of the Credit  Agreement is hereby amended
         to delete the language  "$24,000,000  for the Clean-Up Period occurring
         in 1998 and $15,000,000 for any Clean-Up Period  thereafter" at the end
         of  such   Section   and  to   substitute   therefor   the  new  figure
         "$30,000,000".




<PAGE>


                                       -5-

                  (i)  Section  2.06(b)(vi)  of the Credit  Agreement  is hereby
         amended to delete the figure  "$15,000,000"  in the fourth line thereof
         and to substitute therefor the new figure "$30,000,000".

                  (j) Section 5.02(b) of the Credit  Agreement is hereby amended
         (i) to delete the word "and" at the end of subclause  (iv)(I)  thereof,
         (ii) to delete  the  punctuation  "." at the end of  subclause  (iv)(J)
         thereof and to substitute  therefor the new phrase ", and" and (iii) to
         add the following new subclause (iv)(K) thereto:

                           "(K) Debt under the Childs Guaranteed LOC Documents."

                  (k) Section 5.02(j) of the Credit  Agreement is hereby amended
         (i) to delete the word "and" at the end of  subclause  (i)(B)  thereof,
         (ii) to add the word "and" at the end of subclause (i)(C) thereof after
         the  phrase  "of  Surviving  Debt",  (iii)  to add  the  following  new
         subclause (i)(D) thereto:

                  "(D) the  prepayment  of the  "Loans"  outstanding  under  the
                  Childs  Guaranteed  Line  of  Credit,  in  whole  or in  part;
                  provided  that at the  time  of any  such  prepayment,  (1) no
                  Default  shall have  occurred and be continuing or shall occur
                  as a result thereof and (2) if the aggregate  principal amount
                  of  one  or  more  of  such   "Loans"  was   included  in  the
                  determination  of the  Fixed  Charge  Coverage  Ratio  for any
                  Measurement  Period under subclause  (a)(ii) of the definition
                  of "Fixed  Charge  Coverage  Ratio" set forth in Section 1.01,
                  then such  "Loans"  may not be prepaid  until such time as the
                  Parent  Guarantor or the Borrower  shall deliver to the Lender
                  Parties  Consolidated   financial  statements  of  the  Parent
                  Guarantor and its Subsidiaries pursuant to (and satisfying all
                  of the requirements  of) Section 5.03(c) and 5.03(d),  and the
                  related compliance certificate pursuant to such Section, which
                  demonstrate  that the Parent  Guarantor is in compliance  with
                  the  requirements  of Section  5.04(b)  to  maintain a minimum
                  Fixed Charge  Coverage Ratio of 1.00:1  without  including the
                  aggregate  principal  amount  of any  "Loans"  made  under the
                  Childs  Guaranteed  Line of Credit which are being  prepaid in
                  the  calculation of the numerator of the Fixed Charge Coverage
                  Ratio for the Measurement  Period reflected in such compliance
                  certificate",

         (iv) to add after the  language  "any term or  condition  of" in clause
         (ii) thereof the new subclause reference "(A)" and (v) to add after the
         phrase  "any  Surviving  Debt" at the end of clause  (ii)  thereof  the
         following new language:

                  ", the  Subordinated  Notes  Documents,  the Parent  Guarantor
                  Preferred Stock or the Junior Exchange Notes or (B) the Childs
                  Guaranteed  LOC  Documents,  in the  case  of  this  subclause
                  (ii)(B),  in any manner that,  either  individually  or in the
                  aggregate,  could  reasonably  be  expected to have a Material
                  Adverse Effect or to adversely  affect the rights or interests
                  of the  Administrative  Agent or any Lender  Party under or in
                  respect of the Loan Documents".

                  (l) Section 5.03(e) of the Credit  Agreement is hereby amended
         (i) to delete the  phrase  "no later  than 30 days" in the second  line
         thereof  and to  substitute  therefor  the new phrase "no later than 60
         days" and (ii) to delete the phrase "on a monthly  basis" in the fourth
         line thereof and to substitute  therefor the new phrase "on a quarterly
         basis".




<PAGE>


                                       -6-

                  (m) Section 5.04 of the Credit Agreement is hereby amended and
         restated in its entirety to read as follows:

                           "SECTION 5.04.  Financial  Covenants.  So long as any
                  Advance  shall  remain  unpaid,  any Letter of Credit shall be
                  outstanding  or any Lender  Party  shall  have any  Commitment
                  hereunder, the Parent Guarantor will:

                                    (a) Total Leverage  Ratio.  Maintain a Total
                           Leverage Ratio as of the last day of each Measurement
                           Period of not more than the  amount  set forth  below
                           for each Measurement Period set forth below:

                               Measurement Period
                                    Ending In                     Ratio
                               ------------------                --------

                               May 1999                           7.25:1
                               August 1999                        7.50:1
                               November 1999                      7.90:1
                               February 2000                      7.20:1

                               May 2000                           6.90:1
                               August 2000                        6.75:1
                               November 2000                      6.75:1
                               February 2001                      6.40:1

                               May 2001                           6.25:1
                               August 2001                        6.10:1
                               November 2001                      5.75:1
                               February 2002                      5.50:1

                               May 2002                           5.50:1
                               August 2002                        5.25:1
                               November 2002                      5.00:1
                               February 2003                      4.75:1



<PAGE>


                                       -7-

                               Measurement Period
                                    Ending In                     Ratio
                               ------------------                --------

                               May 2003                           4.50:1
                               August 2003                        4.50:1
                               November 2003 and
                                 thereafter                       4.25:1

                                    (b) Fixed Charge Coverage Ratio.  Maintain a
                           Fixed  Charge  Coverage  Ratio  as of the last day of
                           each Measurement Period of not less 1.00:1.

                                    (c)  Interest  Coverage  Ratio.  Maintain an
                           Interest  Coverage  Ratio  as of the last day of each
                           Measurement  Period of not less than the  amount  set
                           forth  below for each  Measurement  Period  set forth
                           below:

                               Measurement Period
                                    Ending In                     Ratio
                               ------------------                --------

                               May 1999                           1.40:1
                               August 1999                        1.35:1
                               November 1999                      1.35:1
                               February 2000                      1.45:1

                               May 2000                           1.50:1
                               August 2000                        1.55:1
                               November 2000                      1.55:1
                               February 2001                      1.65:1

                               May 2001                           1.70:1
                               August 2001                        1.75:1
                               November 2001                      1.75:1
                               February 2002                      1.90:1

                               May 2002                           2.00:1
                               August 2002                        2.00:1



<PAGE>


                                       -8-

                               Measurement Period
                                    Ending In                     Ratio
                               ------------------                --------


                               February 2003                      2.00:1

                               May 2003                           2.25:1
                               August 2003                        2.25:1
                               November 2003                      2.25:1
                               February 2004                      2.25:1

                               May 2004                           2.25:1
                               August 2004                        2.25:1
                               November 2004 and
                                thereafter                        2.50:1"

                  (n) Section 6.01 of the Credit Agreement is hereby amended (i)
         to add after the  punctuation  ";" at the end of subsection (o) thereof
         the word "or" and (ii) to add the following new Section 6.01(p):

                           "(p) any "Event of Default" (as defined in the Childs
                  Guaranteed   LOC   Documents)   shall  have  occurred  and  be
                  continuing under the Childs Guaranteed LOC Documents;".

                  (o) Schedule III to the Credit  Agreement is hereby deleted in
         its entirety.

                  SECTION  2.  Waiver  of  Certain   Provisions  of  the  Credit
Agreement. Any and all Defaults and Events of Default under Sections 6.01(c) and
6.01(d) of the Credit  Agreement  that have  occurred  and are  continuing  as a
result of (a) the failure of the Parent  Guarantor  and the  Borrower to deliver
projected  Consolidated  financial  statements  of the Parent  Guarantor and its
Subsidiaries  on a monthly  basis for the Fiscal Year ending  February 26, 2000,
(b) the failure of the Parent  Guarantor to maintain a Total  Leverage Ratio for
the  Measurement  Period ended  February 28, 1999 of 6.75:1 in  accordance  with
Section  5.04(a) of the Credit  Agreement and (c) the failure of the Borrower to
reduce  the  sum of the  aggregate  principal  amount  of  all  Working  Capital
Advances,  Letter of Credit Advances and Swing Line Advances  outstanding during
the Clean-Up  Period  occurring  between January 1, 1999 and May 30, 1999 to not
more than $15,000,000 in accordance with Section 2.01(g) of the Credit Agreement
are, on and as of the  Amendment  Effective  Date,  hereby  waived by the Lender
Parties.




<PAGE>


                                       -9-

                  SECTION 3. Conditions  Precedent to the  Effectiveness of this
Amendment and Waiver. This Amendment and Waiver shall become effective as of the
first  date (the  "Amendment  Effective  Date") on which  each of the  following
conditions precedent shall have been satisfied:

                  (a) The Administrative Agent shall have received  counterparts
         of this  Amendment  and Waiver  executed  by the  Borrower,  the Parent
         Guarantor and the Required Lenders or, as to any of the Lender Parties,
         advice satisfactory to the Administrative  Agent that such Lender Party
         has executed this Amendment and Waiver.

                  (b) The  Administrative  Agent and each of the Lender  Parties
         shall  have  received  true  and  complete  copies,  certified  by  the
         Borrower, of all of the Childs Guaranteed LOC Documents,  which in each
         case  shall be in form and  substance  reasonably  satisfactory  to the
         Lender Parties. All of the conditions precedent to the effectiveness of
         the Childs  Guaranteed LOC Documents shall have been satisfied or shall
         be satisfied  concurrently with the effectiveness of this Amendment and
         Waiver.

                  (c) The  Administrative  Agent and each of the Lender  Parties
         shall  have  received  true  and  complete  copies,  certified  by  the
         Borrower, of agreements,  in form and substance reasonably satisfactory
         to the Lender Parties,  duly executed by each of J.W. Childs Associates
         L.P. and UBS Management, Inc., in which J.W. Childs Associates L.P. and
         UBS Management, Inc., respectively, have agreed to defer payment of any
         and all management  fees owing to them under its  Management  Agreement
         until  such time as the  Administrative  Agent and the  Lender  Parties
         shall have received the Consolidated financial statements of the Parent
         Guarantor and its  Subsidiaries for the Fiscal Year ending February 26,
         2000 and the certificates and other documents  required to be delivered
         together  with  such  Consolidated  financial  statements  pursuant  to
         Section  5.03(d)  of the  Credit  Agreement  and then  only if (i) such
         Consolidated   financial   statements   (and  the  related   compliance
         certificate)  reflect  that  the  Consolidated  EBITDA  of  the  Parent
         Guarantor  and its  Subsidiaries  for such Fiscal Year is not less than
         $51,600,000  and  (ii) at such  time no  Default  has  occurred  and is
         continuing or would result from the payment of such deferred management
         fees to J.W. Childs Associates L.P. or UBS Management, Inc.

                  (d) All of the consents,  approvals and authorizations of, and
         notices and filings to or with, and other actions by, any  governmental
         or  regulatory  authority or any other Person  necessary in  connection
         with any aspect of any of the Loan  Documents (as amended and otherwise
         modified  hereby),  the Childs  Guaranteed  LOC Documents or any of the
         other transactions  contemplated thereby or hereby to occur on or prior
         to the Amendment  Effective Date shall have been obtained  (without the
         imposition of any conditions that are not reasonably  acceptable to the
         Lender  Parties)  and  shall  remain  in full  force  and  effect;  all
         applicable  waiting periods shall have expired without any action being
         taken by any competent authority;  and no law, rule or regulation shall
         be applicable  in the  reasonable  judgment of the Lender  Parties that
         restrains,  prevents or imposes  materially adverse conditions upon any
         aspect of any of the Loan Documents (as amended and otherwise  modified
         hereby),  the  Childs  Guaranteed  LOC  Documents  or any of the  other
         transactions contemplated thereby or hereby to occur on or prior to the
         Amendment Effective Date.

                  (e) The  representations  and warranties  contained in each of
         the Loan Documents shall be correct in all material  respects on and as
         of the Amendment Effective Date, before and after giving effect to this
         Amendment and Waiver, as though made on and as of such date (except (i)
         for any such


<PAGE>

                                      -10-

         representation  and warranty  that, by its terms,  refers to a specific
         date other than the Amendment  Effective Date, in which case as of such
         specific date, (ii) that the Consolidated  financial  statements of the
         Parent Guarantor and its Subsidiaries referred to in Section 4.01(f) of
         the  Credit  Agreement  shall be  deemed  to refer to the  Consolidated
         financial  statements of the Parent Guarantor and its Subsidiaries most
         recently delivered to the  Administrative  Agent and the Lender Parties
         pursuant to Sections  5.03(c) and 5.03(d) on or prior to the  Amendment
         Effective  Date and (iii)  that the  projected  Consolidated  financial
         statements of the Parent Guarantor and its Subsidiaries  referred to in
         Section 4.01(h) of the Credit Agreement shall be deemed to refer to the
         projected Consolidated financial statements of the Parent Guarantor and
         its Subsidiaries most recently  delivered to the  Administrative  Agent
         and the Lender Parties  pursuant to Section  5.03(e) on or prior to the
         Amendment Effective Date).

                  (f) No event shall have occurred and be  continuing,  or shall
         result  from the  effectiveness  of this  Amendment  and  Waiver,  that
         constitutes  a Default,  other than the  Defaults and Events of Default
         that are or are to be expressly waived pursuant to Section 2.

                  (g) No change, development,  event or circumstance relating to
         or affecting the Parent  Guarantor or any of its Subsidiaries or any of
         their  respective  property,  assets or businesses shall have occurred,
         and no additional  information  shall have come to the attention of the
         Administrative  Agent or the  Lender  Parties,  since May 6, 1999 that,
         either  individually or in the aggregate,  could reasonably be expected
         to have a Material Adverse Effect.

                  (h) The Borrower shall have paid to the Administrative  Agent,
         for the ratable  account of each of the Lenders  that has  executed and
         delivered  a   counterpart   of  this   Amendment  and  Waiver  to  the
         Administrative  Agent on or prior to the Amendment  Effective  Date (or
         advised the  Administrative  Agent in a manner  satisfactory to it that
         such Lender has executed  this  Amendment and Waiver on or prior to the
         Amendment  Effective  Date), an amendment fee of 0.25% on the aggregate
         Commitments of such Lender.

                  (i) All of the accrued fees and expenses of the Administrative
         Agent and the Lender  Parties  (including the accrued fees and expenses
         of counsel for the Administrative Agent) shall have been paid in full.

                  (j) The Administrative  Agent shall have received on or before
         the  Amendment  Effective  Date the  following,  each  dated  such date
         (unless  otherwise   specified),   in  form  and  substance  reasonably
         satisfactory to the Required Lenders (unless  otherwise  specified) and
         in sufficient copies for each Lender Party:

                           (i) Certified  copies of the resolutions of the Board
                  of  Directors  of  the  Borrower  and  the  Parent   Guarantor
                  approving  this  Amendment and Waiver,  the Childs  Guaranteed
                  Line of Credit and the Childs Guaranteed LOC Documents and the
                  transactions  contemplated  hereby and thereby (and which have
                  not  been  delivered  to  the  Lender  Parties  prior  to  the
                  Amendment  Effective  Date),  and of all documents  evidencing
                  other necessary  corporate  action and  governmental and other
                  third party  approvals and  consents,  if any, with respect to
                  this  Amendment  and  Waiver,  the Childs  Guaranteed  Line of
                  Credit  and  the  Childs  Guaranteed  LOC  Documents  and  the
                  transactions  contemplated  hereby and thereby (and which have
                  not  been  delivered  to  the  Lender  Parties  prior  to  the
                  Amendment Effective Date).




<PAGE>


                                      -11-

                           (ii) A  certificate  of the  Borrower  and the Parent
                  Guarantor,  signed on behalf of the  Borrower  and the  Parent
                  Guarantor,  respectively, by its President or a Vice President
                  and  its  Secretary  or any  Assistant  Secretary,  dated  the
                  Amendment   Effective  Date  (the  statements  made  in  which
                  certificate shall be true on and as of the Amendment Effective
                  Date), certifying as to:

                                    (A) the  absence  of any  amendments  to the
                           charter  of  such  Person   since  the  date  of  the
                           Secretary  of  State's  certificate  referred  to  in
                           Section  3.01(j)(iv) of the Credit Agreement,  or any
                           steps  taken by the board of  directors  (or  persons
                           performing  similar functions) or the shareholders of
                           such  Person  to  effect  or  authorize  any  further
                           amendment, supplement or other modification thereto;

                                    (B) the  accuracy  and  completeness  of the
                           bylaws  of such  Person  as in  effect on the date on
                           which the  resolutions  of the board of directors (or
                           persons  performing similar functions) of such Person
                           referred to in clause (i) of this  Section  3(j) were
                           adopted and on the Amendment  Effective  Date (a copy
                           of which, if different from the bylaws of such Person
                           most recently  delivered to the Lender  Parties prior
                           to the Amendment Effective Date, shall be attached to
                           such certificate);

                                    (C) the due  incorporation and good standing
                           of such Person as a corporation  organized  under the
                           laws of the  jurisdiction of its  incorporation,  and
                           the  absence  of any  proceeding  (either  pending or
                           contemplated)  for the  dissolution,  liquidation  or
                           other  termination of the existence of such Person or
                           any of its Subsidiaries;

                                    (D) the accuracy in all material respects of
                           the  representations  and  warranties  made  by  such
                           Person in the Loan  Documents to which it is or is to
                           be a party as though made on and as of the  Amendment
                           Effective  Date,  before and after  giving  effect to
                           this  Amendment and Waiver,  as though made on and as
                           of such date (except (i) for any such  representation
                           and warranty that, by its terms, refers to a specific
                           date  other than the  Amendment  Effective  Date,  in
                           which case as of such  specific  date,  (ii) that the
                           Consolidated   financial  statements  of  the  Parent
                           Guarantor and its Subsidiaries referred to in Section
                           4.01(f)  of the Credit  Agreement  shall be deemed to
                           refer to the Consolidated financial statements of the
                           Parent Guarantor and its  Subsidiaries  most recently
                           delivered to the Administrative  Agent and the Lender
                           Parties  pursuant to Sections  5.03(c) and 5.03(d) on
                           or prior to the  Amendment  Effective  Date and (iii)
                           that the projected  Consolidated financial statements
                           of the Parent Guarantor and its Subsidiaries referred
                           to in Section  4.01(h) of the Credit  Agreement shall
                           be  deemed  to  refer to the  projected  Consolidated
                           financial  statements of the Parent Guarantor and its
                           Subsidiaries   most   recently   delivered   to   the
                           Administrative  Agent and the Lender Parties pursuant
                           to  Section  5.03(e)  on or  prior  to the  Amendment
                           Effective Date); and

                                    (E) the absence of any event  occurring  and
                           continuing,  or resulting from the  effectiveness  of
                           this Amendment and Waiver, that would constitute a



<PAGE>


                                      -12-

                           Default,  other  than  the  Defaults  and  Events  of
                           Default  that  are  or  are  to be  expressly  waived
                           pursuant to Section 2.

                           (iii) A certificate  of the Secretary or an Assistant
                  Secretary of the Borrower and the Parent Guarantor  certifying
                  the names and true  signatures of the officers of the Borrower
                  or the Parent Guarantor  authorized to sign this Amendment and
                  Waiver and the other documents to be delivered hereunder.

                           (iv)  Projections,  prepared  by  management  of  the
                  Parent  Guarantor and the Borrower,  of  Consolidated  balance
                  sheets,  income  statements  and cash flows  statements of the
                  Parent Guarantor and its Subsidiaries on a quarterly basis for
                  the period  between March 1, 1999 and February 26, 2000 and on
                  an annual  basis for each Fiscal Year  thereafter  through the
                  Term B Termination Date.

                           (v) A  favorable  opinion of  Sullivan  &  Worcester,
                  counsel   for  Childs  and  the  Parent   Guarantor   and  its
                  Subsidiaries, in form and substance reasonably satisfactory to
                  the Lender Parties.

                           (vi) Such other opinions, certificates, documents and
                  information as the  Administrative  Agent or any of the Lender
                  Parties  through  the  Administrative   Agent  may  reasonably
                  request.

The  effectiveness of this Amendment and Waiver is further  conditioned upon the
accuracy of all of the factual  matters  described  herein.  This  Amendment and
Waiver is subject to the provisions of Section 9.01 of the Credit Agreement.

                  SECTION 4. Reference to and Effect on the Loan Documents.  (a)
On and  after  the  Amendment  Effective  Date,  each  reference  in the  Credit
Agreement  to "this  Agreement",  "hereunder",  "hereof" or words of like import
referring to the Credit Agreement, and each reference in the Notes and the other
Loan Documents to "the Credit  Agreement",  "thereunder",  "thereof" or words of
like import referring to the Credit Agreement,  shall mean and be a reference to
the Credit Agreement, as amended and otherwise modified hereby.

                  (b) The Credit Agreement, the Notes and each of the other Loan
Documents,  as amended  and  otherwise  modified by the  amendments  and waivers
specifically provided above in Sections 1 and 2, are and shall continue to be in
full force and effect and are hereby in all  respects  ratified  and  confirmed.
Without limiting the generality of the foregoing,  the Collateral  Documents and
all of the  Collateral  described  therein do and shall  continue  to secure the
payment of all  Obligations of the Loan Parties under and in respect of the Loan
Documents, as amended and otherwise modified by this Amendment and Waiver.

                  (c)  The  execution,   delivery  and   effectiveness  of  this
Amendment and Waiver shall not, except as expressly provided herein,  operate as
a waiver of any right,  power or remedy of any Secured  Party or any Agent under
any of the Loan  Documents,  nor  constitute a waiver of any provision of any of
the Loan Documents.




<PAGE>


                                      -13-

                  SECTION 5. Costs and Expenses.  The Borrower  hereby agrees to
pay, upon demand, all costs and expenses of the Administrative Agent (including,
without  limitation,  the  reasonable  fees  and  expenses  of  counsel  for the
Administrative Agent) in connection with the preparation,  execution,  delivery,
administration,  modification and amendment of this Amendment and Waiver and the
other  documents,  instruments  and  agreements to be delivered  hereunder or in
connection  herewith,  all in  accordance  with the terms of Section 9.04 of the
Credit Agreement.

                  SECTION 6.  Execution  in  Counterparts.  This  Amendment  and
Waiver may be executed in any number of  counterparts  and by different  parties
hereto in separate counterparts,  each of which when so executed shall be deemed
to be an original and all of which taken together  shall  constitute one and the
same agreement.  Delivery of an executed counterpart of a signature page to this
Amendment and Waiver by telecopier  shall be effective as delivery of a manually
executed counterpart of this Amendment and Waiver.

                  SECTION 7.  Governing  Law. This Amendment and Waiver shall be
governed by, and  construed  in  accordance  with,  the laws of the State of New
York.

                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Amendment and Waiver to be executed by their respective  officers thereunto duly
authorized, as of the date first above written.


                                    The Borrower

                                    DESA INTERNATIONAL, INC.


                                    By
                                       Name:
                                       Title:


                                    The Parent Guarantor

                                    DESA HOLDINGS CORPORATION


                                    By
                                       Name:
                                       Title:




<PAGE>



                                      -14-

                                    The Administrative Agent

                                    NATIONSBANK, N.A., as Administrative Agent


                                    By
                                       Name:
                                       Title:

                                    The Lender Parties

                                    NATIONSBANK, N.A., as a Lender,
                                      the Swing Line Bank and the Issuing Bank


                                    By
                                       Name:
                                       Title:


                                    UNION BANK OF SWITZERLAND,
                                       NEW YORK BRANCH


                                    By
                                       Name:
                                       Title:


                                    By
                                       Name:
                                       Title:


                                    HELLER FINANCIAL, INC.


                                    By
                                       Name:
                                       Title:





<PAGE>


                                      -15-

                                    IMPERIAL BANK, CALIFORNIA
                                       BANKING CORPORATION


                                    By
                                       Name:
                                       Title:


                                    BANKBOSTON, N.A.


                                    By
                                       Name:
                                       Title:

                                    DRESDNER BANK AG, NEW YORK
                                       AND GRAND CAYMAN BRANCHES


                                    By
                                       Name:
                                       Title:


                                    By
                                       Name:
                                       Title:


                                    FIRST SOURCE FINANCIAL LLP
                                       BY FIRST SOURCE FINANCIAL, INC.,
                                       as Agent/Manager


                                    By
                                       Name:
                                       Title:


                                    FLEET NATIONAL BANK


                                    By
                                       Name:
                                       Title:




<PAGE>


                                      -16-


                                    GENERAL ELECTRIC CAPITAL
                                       CORPORATION


                                    By
                                       Name:
                                       Title:


                                    NATIONAL CITY BANK


                                    By
                                       Name:
                                       Title:


                                    FLEET BUSINESS CREDIT
                                       CORPORATION


                                    By
                                       Name:
                                       Title:


                                    COMERICA BANK


                                    By
                                       Name:
                                       Title:


                                    VAN KAMPEN PRIME
                                       RATE INCOME TRUST


                                    By
                                       Name:
                                       Title:





<PAGE>


                                      -17-

                                    SENIOR DEBT PORTFOLIO, by
                                       BOSTON MANAGEMENT AND
                                         RESEARCH, as Investment Advisor


                                    By
                                       Name:
                                       Title:


                                    MORGAN STANLEY DEAN WITTER
                                       PRIME INCOME TRUST


                                    By
                                       Name:
                                       Title:


                                    PILGRIM PRIME RATE TRUST, by
                                       PILGRIM INVESTMENTS, INC.,
                                       as Investment Manager


                                    By
                                       Name:
                                       Title:


                                    ML CBO IV (CAYMAN), by
                                       HIGHLAND CAPITAL MANAGEMENT
                                       L.P., as Collateral Manager


                                    By
                                       Name:
                                       Title:


                                    BOEING CAPITAL CORPORATION


                                    By
                                       Name:
                                       Title:





<PAGE>


                                      -18-

                                    BANK POLSKA KASA OPIEKI S.A. -
                                       PEKAO S.A. GROUP, NEW YORK
                                       BRANCH


                                    By
                                       Name:
                                       Title:


                                    PARIBAS CAPITAL FUNDING LLC


                                    By
                                       Name:
                                       Title: