FOURTH AMENDMENT T0 AMENDED AND RESTATED
                          CREDIT AND SECURITY AGREEMENT

     This  Fourth  Amendment  to the Amended and  Restated  Credit and  Security
Agreement  ("Fourth  Amendment") is dated  effective June 8, 1998, and is by and
between the following identified parties:  Featherlite Mfg., Inc., a corporation
duly  organized and validly  existing  under the laws of the State of Minnesota,
with  its  principal  place of  business  at Hwy.  63 & 9,  Cresco,  Iowa  52136
('`Borrower"),  Conrad Clement, Larry Clement, Kathy Clement, residents of Iowa,
and Tracy Clement and Nancy Clement,  residents of Minnesota (the " Clements" ),
and FirstarBank Iowa, N.A., a national banking institution ("Bank").

     RECITALS

     A. Borrower,  Clements and Bank entered into an Amended and Restated Credit
and Security  Agreement  dated as of December 30, 1996  ("Restated  Agreement"),
which was amended by a First Amendment  dated June 18, 1997, a Second  Amendment
dated July 31, 1997 and a Third Amendment dated January 1, 1998.

     B.  Borrower has requested  that the Bank  increase the  revolving  line of
credit and to amend certain terms and conditions in the Restated Agreement.

     C. Bank is willing to grant the request subject to the terms of this Fourth
Amendment.

     The parties agree:

     1. Amend Definitions and Accounting. Section 1, Definitions and Accounting,
is amended to modify the following definitions:

     "Borrowing  Base"  means an amount  equal to the sum of 80  percent  of the
Eligible  Receivables  of Borrower  outstanding  plus 65 percent of the Eligible
Finished  Inventory  of  Borrower  plus 65  percent  of  Eligible  Raw  Material
Inventory  of  Borrower  plus 85 percent  of the  orderly  liquidation  value of
machinery  and  equipment of Borrower  located at the  facilities of Borrower in
Iowa.

     "Revolving  Line of Credit  Borrowing  Limit"  means an amount equal to the
lesser of: (i) $17,000,000 or (ii) the Borrowing Base."

     2. Amended Negative Covenants.

     (a) Section 9, Negative Covenants,  subpart (b) (iv) is amended to allow up
to $23,000,000 in floor plan financing for the Vantare Division.

     (b) Section 9,  Negative  Covenants,  subpart (c) dealing  with third party
liabilities is amended to allow third party  liabilities as long as they are not
in excess of $25,000,000.

<PAGE>

     3. Amended Financial Covenant. Section 11, Financial Covenants of Borrower,
as follows:

     a) Minimum Working Capital. This financial covenant is to be deleted in its
entirety.

     b) Minimum Tangible Net Worth.  Maintain at all times as Tangible Net Worth
of not less than $20,000,000.

     c) Capital  Expenditures.  Refrain  from making  expenditures  for fixed or
capital assets which would cause the aggregate of all such  expenditures made by
Borrower to exceed $3,000,000 in any fiscal year.

     d)  Current  Ratio.  Maintain  at all  times a ratio of  current  assets to
current liabilities of not less than 1.25 to 1.

     e) Leverage  Ratio.  Maintain at all times a ratio of total  liabilities to
Tangible Net Worth of not greater then 3.75 to 1.

     f) Cash Flow/Debt Service. Maintain a ratio of Operating Cash Flow to Total
Debt  Service of not less than 1.5 to 1 measured  quarterly  based on a trailing
four-quarter average basis.

     4.  Representations and Warranties.  All the representations and warranties
of Borrower as set forth in the Restated  Agreement  are true and correct in all
material respects as of the date of this Fourth Amendment.

     5.  Acknowledgment of Receipt. By their execution of this Fourth Amendment,
the parties acknowledge receipt of a copy of this document.

     6 Savings.  All other terms and conditions of the Restated  Agreement,  not
specifically  modified by this Fourth Amendment,  shall remain in full force and
effect.

     7.  Representation.  The Borrower  represents  that no Event of Default has
occurred and is  continuing  under the Restated  Agreement,  as amended,  and no
event or  circumstance  has occurred and is continuing  that, with the giving of
notice, the passage of time, or both, would constitute an Event of Default under
the Restated Agreement,  as amended.  Further,  the Borrower represents that the
representations  and  warranties  as  contained in the  Restated  Agreement,  as
amended, continue to be true.

     8.  Counterparts.  This Fourth  Amendment  may be executed in any number of
counterparts,  each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument.

<PAGE>

IMPORTANT:  READ  BEFORE  SIGNING.  THE TERMS OF THIS  AMENDMENT  SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR
ORAL  PROMISES  NOT  CONTAINED IN THIS  WRITTEN  AGREEMENT  (EXCEPT THE RESTATED
AGREEMENT  AS  PREVIOUSLY  AMENDED AND  DOCUMENTS  REFERRED  TO IN THE  RESTATED
AGREEMENT AS  PREVIOUSLY  AMENDED) MAY BE LEGALLY  ENFORCED.  YOU MAY CHANGE THE
TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.

FEATHERLITE MFG., INC.

BY:  /S/ CONRAD CLEMENT
    Conrad Clement, President

BY:   /S/ TRACY J. CLEMENT
     Tracy J. Clement, Executive Vice President

FIRSTAR BANK IOWA, N.A.

BY:   /S/ MITCH McELREE
     Mitch McElree, Vice President