FIFTH AMENDMENT TO AMENDED AND RESTATED
                          CREDIT AND SECURITY AGREEMENT

     This Fifth  Amendment  to the  Amended  and  Restated  Credit and  Security
Agreement  ("Fifth  Amendment") is dated  effective June 30, 1998, and is by and
between the following identified parties:

         Featherlite,   Inc.,  formerly  known  as  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
         "Clement"); and

         Firstar Bank 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,  a Third  Amendment  dated  January 1, 1998,  and a Fourth
Amendment dated June 8, 1998.

     B. Borrower has requested  that the Bank amend certain terms and conditions
in the Restated Agreement.

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

The parties agree:

     1.  Amendment  to Revolver.  Section  5(a) of Revolving  Line of Credit and
Payment Provisions, is amended to read as follows:

          a)  Borrowing.  Subject to the terms and  conditions  of this Restated
     Agreement,  the Bank  shall,  in its sole  discretion,  make loans  (each a
     "Revolving  Loan") to the Borrower in such amounts as the Borrower may from
     time  to  time  request  in  increments  of at  least  $50,000  and at such
     intervals as the Bank may from time to time  determine,  provided  that the
     aggregate  principal  amount of such  Revolving Loan  requested,  shall not
     exceed the Revolving Line of Credit Borrowing Limit.

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     2.  Amendment  to  Letters of Credit.  Section 5A dealing  with  Letters of
Credit is amended to read as follows:

          5A. (a) Letters of Credit. Subject to the terms and conditions of this
     Restated Agreement, the Bank may, in its sole discretion,  issue letters of
     credit  for the  account  of the  Borrower  from  time to  time  until  the
     Revolving Line of Credit  Termination  Date in such amounts as are approved
     by Bank upon  application by Borrower.  Each request for a letter of credit
     shall be made by the  Borrower  in writing  on the Bank's  letter of credit
     application  and  reimbursement  agreement  form. The Bank shall charge its
     reasonable and customary  fees for such letters of credit.  The issuance of
     each letter of credit  shall  constitute a loan and an advance for purposes
     of Section 8.

          (b)  Agreement  to Repay  Letter of Credit  Drawings.  If the Bank has
     received  documents  that it determines  are  satisfactory  to draw under a
     Letter of Credit,  Borrower  shall  reimburse  the Bank  immediately  in an
     amount equal to the amount of such drawing.  If Borrower fails to reimburse
     Bank  immediately,  Bank is authorized by Borrower to draw on the Revolving
     Line of Credit in an amount sufficient to cover the deficiency,  which draw
     shall be treated as a loan under the Revolving Line of Credit.

          (c) Letters of Credit Issued by other Banks. At the Borrower's request
     the Bank may, in its  discretion,  subject to the terms and  conditions  of
     this  Restated  Agreement,  in lieu of  issuing  its own  letter  of credit
     hereunder,  cause a  correspondent  of the Bank to issue a letter of credit
     for the account of the Borrower,  which letter of credit shall be deemed to
     be a letter of credit issued hereunder. The Bank shall execute the standard
     letter of credit application and reimbursement  agreement of such letter of
     credit  issuer.  The Borrower  shall  reimburse the Bank  immediately in an
     amount  equal to any amount which the Bank is required to pay to the letter
     of credit issuer in respect of such letter of credit. If the Borrower fails
     to reimburse  the Bank  immediately,  the Bank is authorized by Borrower to
     draw on the  Revolving  Line of Credit in an amount  sufficient to cure the
     deficiency,  which draw shall be treated as a loan under the Revolving Line
     of Credit.

          (d) The  parties  agree that the Letter of Credit  #S102262  issued by
     Bank in the amount of $1,245,000  due 12/14/98 with Hartford Fire Insurance
     Co. as beneficiary  shall be deemed to be a letter of credit  hereunder for
     all purposes.


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     3. Amended Financial Covenant. Section 11, Financial Covenants of Borrower,
is amended as follows.  The financial  covenant  regarding "Minimum Tangible Net
Worth" is amended and restated in its entirety as follows:

                  Minimum Tangible Net Worth.  Maintain at all times a Tangible
                  Net Worth of not less than $18,000,000.

     4.  Renegotiation.  The parties have agreed to extend the maturity  date on
the Revolving Line of Credit  Promissory  Note until September 30, 1999 and have
executed a new note which references that date, however,  the parties intend for
the Obligations of Borrower to be refinanced by September 20, 1998. In the event
that the Obligations are not refinanced by September 30, 1998, Bank and Borrower
agree to use their best efforts to  renegotiate  the terms and  structure of the
Obligations.

     5.  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 Fifth Amendment.

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

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

     8.  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.

     9.  Counterparts.  This Fifth  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.

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IMPORTANT:  READ  BEFORE  SIGNING.  THE TERMS OF THIS  AMENDMENT  SHOULD BE READ
CAREFULLY  BECAUSE  ONLY THOSE  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, INC.

                                       BY:
                                          Conrad Clement, President


                                       BY:
                                          Tracy J. Clement, Executive Vice
                                          President
      

                                       FIRSTAR BANK IOWA, N.A.

                                       BY:
                                          Mitch McElree, Vice President