FIRST AMENDMENT TO AMENDED AND RESTATED
                          CREDIT AND SECURITY AGREEMENT

     This First  Amendment  to the  Amended  and  Restated  Credit and  Security
Agreement ("First Amendment") is dated as of June 18, 1997 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 (each a "Guarantor" and collectively the "Guarantors"); and

     Firstar Bank Iowa, N.A., a national barking institution ("Bank").


                                    RECITALS

     A.  Borrower,  Guarantors  and Bank  entered  into an Amended and  Restated
Credit  and  Security  Agreement  dated  as  of  December  30,  1996  ("Restated
Agreement").

     B.  Borrower has requested  that the Bank extend an  additional  $5,000,000
term loan to  Borrower,  amend  certain  terms and  conditions  in the  Restated
Agreement, and release the guarantees given by the Guarantors.

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

     The parties agree:

     1. Change in Definitions.  In Section 1,  Definitions  and Accounting,  the
following definitions shall be added:

     "Term Out Term Loan  Promissory  Note"  shall  have the  meaning  described
thereto in Section 6A.

     "Term  Loan"  shall  reference  the term loans  described  in Section 6 and
Section 6A.

     2.  Guarantees.  Section 4,  Guarantors,  is deleted in its  entirety.  All
guarantees of Guarantors are released in full.



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 3. Term Out Term Loan. A new Section 6A is inserted as follows:

 6A. Term Out Term Loan and Payment Provisions.

     (a)  Subject to the terms and  conditions  of the  Restated  Agreement,  as
amended, Bank shall lend to Borrower the principal sum of $5,000,000.

     (b)  Borrower  shall  execute  and  deliver  to Bank the Term Out Term Loan
Promissory Note with this First Amendment.

     (c) In accordance  with the Term Out Term Loan  Promissory  Note,  Borrower
shall pay to Bank  principal  and interest in 59  installments  of $55,150 each,
beginning  July  18,  1997,  and on the  same  date of each  consecutive  months
thereafter  plus a final  payment  equal to all  unpaid  principal  and  accrued
interest on June 18, 2002, the maturity date.

     5.  Conditions  Precedent  to Funding  Term Out Term Loan.  Borrower  shall
satisfy  each of the  following  conditions  prior to the making of the Term Out
Term Loan:

     (i) All the  representations  and  warranties  of  Borrower as set forth in
Section 2 of the Restated  Agreement shall be true and correct as of the date of
this First Amendment.

     (ii) Borrower shall be in full  compliance with the terms and conditions of
the  Restated  Agreement  and no Event of  Default  shall have  occurred  and be
continuing.

     (iii)  Borrower  shall have  delivered to Bank,  all in form and  substance
satisfactory to Bank:

     (a) A certificate of the Secretary or other officer of Borrower  containing
copies of resolutions of the Board of Directors and, if applicable, stockholders
of Borrower  authorizing  the execution,  delivery and performance of this First
Amendment  to Restated  Agreement,  any document or  instrument  to be delivered
pursuant  to this First  Amendment  and  identifying  the  officer  or  officers
authorized to execute this First  Amendment and other documents and to make such
requests for loans.

     (b) Term Out Term Loan Promissory Note.

     (c) Collateral Agreement.


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     (d)  Execution  and  delivery  of  Mortgage  on all the  property  owned by
Borrower in Cresco, Iowa.

     (e) Such other documents or instruments as Bank shall reasonably request.

     6. Amended  Negative  Covenant  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 $15,000,000.

     7. Amended Financial Covenant Section 11, Financial  Covenants of Borrower,
subpart  (e)  Leverage  Ratio is amended to require  Borrower to maintain at all
times a ratio of total  liabilities  to tangible  net worth of not greater  than
2.25 to 1.

     8.  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 First Amendment.

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

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

     11.  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.

     12.  Counterparts.  This First  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.

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 CREDIT
AGREEMENT  AS  PREVIOUSLY  AMENDED  AND  DOCUMENTS  REFERRED  TO IN  THE  CREDIT
AGREEMENT AS  PREVIOUSLY  AMENDED) MAY BE LEGALLY  ENFORCED.  YOU MAY CHANGE THE
TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.


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 FEATHERLITE MFG., INC.
 BY:
 Conrad Clement, President

 BY:
 Tracy J. Clement, Executive Vice
 President

 Conrad Clement, individually

 Larry Clement, individually

 Kathy Clement, individually

 Tracy Clement, individually

 Nancy Clement, individually

 FIRSTAR BANK IOWA, N.A.
 BY:Mitch McElree, Vice President