Exhibit 10.21

               AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

     This  Amended  and  Restated  Credit  and  Security  Agreement  dated as of
November 30, 1996 (the  "Restated  Agreement")  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 Highway 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  banking  institution  ("Bank"),
          (successor  in interest  through  merger of Firstar Bank Cedar Rapids,
          N.A.);

                                    RECITALS

     A. Borrower,  Guarantors and the  predecessor to Bank entered into a Credit
and Security  Agreement  dated July 19, 1991 (the "Credit  Agreement").  A First
Amendment  to Credit and Security  Agreement  was entered into by the parties on
November  14, 1991; a Second  Amendment  to Credit and  Security  Agreement  was
entered into by the parties on July 20,  1992;  a Third  Amendment to Credit and
Security Agreement was entered into by the parties on February 5, 1993; a Fourth
Amendment  to Credit and Security  Agreement  was entered into by the parties on
August 20, 1993; a Fifth Amendment to Credit and Security  Agreement was entered
into by the  parties on  December  17,  1993;  a Sixth  Amendment  to Credit and
Security  Agreement  was entered into by the parties on July 20, 1994; a Seventh
Amendment  to Credit and Security  Agreement  was entered into by the parties on
December 1, 1994;  an Eighth  Amendment  to Credit and  Security  Agreement  was
entered into by the parties on July 20,  1995;  a Ninth  Amendment to Credit and
Security  Agreement was entered into by the parties on September 30, 1995; and a
Tenth Amendment to Credit and Security Agreement was entered into by the parties
on January 11, 1996. This Restated Agreement  supersedes and replaces the Credit
Agreement, as amended.

     B.  Guarantors  own stock of the Borrower and each  Guarantor  individually
perceives  substantial  business advantage from the transaction outlined herein,
including  those  transactions  from which the  individual  Guarantors  will not
receive any direct economic benefit.

     C. Borrower and Guarantors  have requested that Bank renew the  $12,000,000
Revolving Line of Credit and amend certain terms and conditions. Guarantors have
requested that their guarantees be released if Borrower achieves certain targets
by June 30, 1997.

     D. Bank is  willing  to grant  the  requests  subject  to the terms of this
Restated Agreement.


                                      - 1 -

<PAGE>



     Therefore,  the parties agree that the Credit Agreement,  as amended by the
First  through  Tenth  Amendments,  is amended and  restated in its  entirety as
follows:

1.       DEFINITIONS AND  ACCOUNTING.  As used in this Restated  Agreement,  and
         unless  otherwise  expressly  indicated,  or unless the context clearly
         requires  otherwise,  the  following  terms  shall  have the  following
         meanings (such  meanings to be equally  applicable to both the singular
         and plural forms of the terms defined:

     "Accounts   Receivable  and  Loan   Reconciliation   Certificate"  means  a
certificate in substantially the form of Exhibit A, attached hereto,  which will
contain a loan covenant compliance calculation certified by an executive officer
of the Borrower.

     "Accounts Payable" means trade payables under GAAP.

     "Bank" means Firstar Bank Iowa, N.A., a national banking institution.

     "Borrower" means Featherlite Mfg., Inc., a Minnesota corporation.

     "Borrowing Base" means an amount equal to the sum of 80 percent of Eligible
Receivables of Borrower outstanding from time to time applicable thereto plus 65
percent of the  Eligible  Inventory  of Borrower as Bank shall deem  acceptable.
Such  Borrowing  Base shall be determined  by  submission of a monthly  Accounts
Receivable  and  Loan  Reconciliation  Certificate  by the  end of  each  month,
accurate to the first of such month.

     "Business Day" means a day other than a Saturday,  Sunday or a day on which
commercial banks are authorized or permitted to close in Cedar Rapids.

     "Collateral" shall have the meaning of the collateral described Section 3.

     "Customer"  means a party  indebted  or  obligated  to  Borrower or a party
against which Borrower has a claim on a Receivable.

     "Eligible  Inventory" means inventory valued at the lower of cost or market
value on a "first in - first out" basis which is acceptable to Bank, in its sole
discretion,  and  excludes  inventory  that  is  slow  moving  or  obsolete  (as
determined  by  the  Bank  in  its  sole  discretion),  or  on  display,  or  on
consignment.

     "Eligible Receivable" means a Receivable which is acceptable to Bank in its
sole  discretion,  but at least is  continuously  in compliance  with all of the
following:

          (1) The Receivable is an account which arose in the ordinary course of
          the business of Borrower from or in connection with a bonafide sale of
          goods or rendition of services,  performed in accordance with an order
          or  contract,  oral or written,  wherein all  obligations  of Borrower
          regarding the shipment or delivery of such goods to Customer have been
          satisfied or the services  have been  performed  for Customer or which
          are Receivables in accordance with GAAP;


                                      - 2 -

<PAGE>



          (2) The rights of a Borrower in and to the Receivable and the proceeds
          thereof  are not  subject to any  assignment,  claim,  lien,  security
          interest, or other encumbrance;

          (3) The  Receivable  is not  disputed  nor  subject to offset,  credit
          allowance,  contra account or adjustment by Customer, except discounts
          for prompt payment disclosed to Bank;

          (4) The  Receivable has been due and payable for less than ninety (90)
          days from the invoice date;

          (5) The  Customer is not a  governmental  agency,  foreign  company or
          controlled  by, in  control  of, or under  common  control  with,  the
          Borrower.

     "Environmental  Law"  means  any  federal,  state  or  local  environmental
statute, regulation, ordinance, law or decree presently in effect or that may be
promulgated in the future, as such statutes,  regulations, and ordinances may be
amended  from time to time,  including  without  limitation,  the  Comprehensive
Environmental Response Compensation Liability Act, as amended, 42 U.S.C. ss.9601
et seq., ("CERCLA"),  the Resource Conservation and Recovery Act, as amended, 42
U.S.C. ss.6901 ("RCRA"), and the common law.

     "Event of Default"  means each and every event  specified  in Section 12 of
this Restated Agreement.

     "GAAP" means generally accepted accounting principles consistently applied.

     "Guarantors"  mean Conrad  Clement,  Larry Clement,  Kathy  Clement,  Tracy
Clement and Nancy Clement (each a "Guarantor").

     "Guaranty"  means a guaranty given by a Guarantor  pursuant to Section 4 of
this Restated Agreement and substantially in the form attached as Exhibit B.

     "Hazardous Substance" means any substance or material defined or designated
as hazardous or toxic waste,  hazardous or toxic material,  a hazardous or toxic
substance, or infectious material, substance or waste, or other similar term, by
any  Environmental Law or including,  without  limitation,  asbestos,  petroleum
products, mining wastes, fly ash and agricultural chemical products.

     "Interest and Charges" means  interest,  charges,  expenses and other items
incurred  by the Bank  under  the Loan  Documents  which are  chargeable  to the
Borrower and which shall be billed directly to the Borrower.

     "Loan" means all loans from Bank to Borrower including all revolving credit
facilities and all term facilities.

     "Notes" means all notes executed by Borrower in favor of Bank including but
not limited to the Revolving Line of Credit Promissory Note and all term notes.


                                      - 3 -

<PAGE>



     "Obligations" means any and all indebtedness,  obligations, and liabilities
of Borrower to Bank of every kind and description,  direct or indirect,  secured
or unsecured,  joint or several,  absolute or contingent,  due or to become due,
whether  for  payment  or  performance,   now  existing  or  hereafter  arising,
regardless  of how the same  arise  or by what  instrument,  agreement,  or book
account  they  may  be  evidenced,  or  whether  evidenced  by  any  instrument,
agreement, or book account, including,  without limitation: all loans (including
any loan by renewal or extension); all indebtedness, all undertakings to take or
refrain from taking any action;  all  indebtedness,  liabilities  or obligations
owing  from  Borrower  to  others  which  Bank may have  obtained  by  purchase,
negotiation,  discount, assignment, or otherwise; and all interest, taxes, fees,
charges,  expenses,  and attorney's  fees  chargeable to Borrower or incurred by
Bank  under this  Restated  Agreement  or in any other  document  or  instrument
delivered hereunder or as a supplement hereto.

     "Operating Cash Flow" means net income plus income taxes, interest expense,
depreciation,  amortization,  and other  non-cash  items,  adjusted to eliminate
extraordinary  items and adjusted on a consistent basis to reflect  increases or
decreases  that result from  acquisition  sales,  or  exchanges  of property and
gains/losses on the sale of property.

     "Person" means an individual,  a corporation,  a voluntary  association,  a
partnership,   a  trust,  a  limited   liability   company,   an  unincorporated
organization or a governmental agency,  instrumentality or political subdivision
thereof.

     "Receivable" means all accounts and general intangibles, each as defined in
the Uniform Commercial Code, of Borrower,  constituting any right to the payment
of money, including (but not limited to) all monies due and to become due to the
Borrower in respect of any loans or advances for Inventory or Equipment or other
goods sold by Borrower and all tax refunds.

     "Revolving Line of Credit" means the credit referred to in Section 5.

     "Revolving  Line of Credit  Borrowing  Limit"  means an amount equal to the
lesser of:

                  (1)      $12,000,000
                  (2)      the Borrowing Base.

     "Revolving Line of Credit  Promissory  Note" means the promissory  note, in
substantially the form of Exhibit C attached, to be delivered by Borrower to the
Bank.

     "Revolving Line of Credit  Termination Date" means the maturity date on the
Revolving  Line of Credit  Promissory  Note as it may be  extended,  amended  or
renewed from time to time at the sole discretion of Bank, or earlier accelerated
upon the occurrence of an Event of Default or otherwise as provided herein.

     "Revolving Loans" means the credit referred to in Section 5.

     "Subsidiary"  means,  with  respect  to  any  Person  (the  "Parent"),  any
corporation or other business  organization  of which at least a majority of the
outstanding  shares of stock or other  ownership  interests  having by the terms
thereof ordinary voting power to elect a majority of the

                                      - 4 -

<PAGE>



Board of Directors or comparable  positions  (irrespective  of whether or not at
the time any other class or classes of such stock or ownership interests of such
corporation or other business organization shall have or might have voting power
by  reason of the  happening  of any  contingency)  is at the time  directly  or
indirectly  owned or controlled by the Parent or one or more of the Subsidiaries
of the Parent.

     "Tangible   Net  Worth"  means  the  excess  of  total  assets  over  total
liabilities,  total  assets  and  total  liabilities  each to be  determined  in
accordance  with  GAAP,  excluding,  however,  from the  determination  of total
assets,  (i) all assets which would be  classified  as  intangible  assets under
GAAP, including,  without limitation,  organization fees and expenses, goodwill,
patents,  trademarks,  trade names,  copyrights,  and  franchises,  and (ii) all
indebtedness to Borrower from any shareholder,  director, officer or employee of
Borrower  or from any  relative  of such  party  (but net of any  corresponding,
offsetting indebtedness from Borrower to such individual).

     "Term Loans" means the credits referred to in Section 6.

     "Term Notes" means the notes evidencing the Term Loans.

     "Total  Debt  Service"  means,  during  any  period,  all  interest  on and
principal due of, all indebtedness which is due and payable during such period.

     "Total  Expenditures"  means all cash expenses (including debt service) and
capital expenditures actually made.


2.       REPRESENTATIONS AND WARRANTIES.

     As a material  inducement to Bank to make loans to the Borrower  under this
Restated  Agreement,   Borrower  represents  and  warrants  to  Bank,  and  such
representations  and  warranties  shall survive during the term of this Restated
Agreement and so long thereafter as any Obligations shall remain outstanding, as
follows:

     a. Corporate  Standing and Power:  The Borrower has been duly  incorporated
and organized and is existing as a corporation  in good standing  under the laws
of Minnesota and is duly qualified and in good standing as a foreign corporation
in those jurisdictions where the conduct of its business or the ownership of its
properties requires  qualification.  The Borrower has the power and authority to
own its  properties  and  assets,  to conduct  its  business,  to enter into and
perform this Restated Agreement,  and any other document or instrument delivered
in connection herewith, and to incur the Obligations.

     b. Trade Names,  Business Changes:  Except as may be set forth on Exhibit D
attached,  Borrower has utilized no trade names in the conduct of its  business;
has not changed its name,  been the surviving  entity in a merger,  acquired any
business,  or changed  the  location  of their  chief place of business or chief
executive  office or the location of their records or the location of any of the
Collateral.


                                      - 5 -

<PAGE>



     c. No Defaults: Borrower is not in default with respect to any agreement to
which it is a party or by which it is bound.  The execution and  performance  of
this  Restated  Agreement  and any other  document or instrument to be delivered
hereunder or as a supplement hereto will not violate any law or the terms of the
incorporation  documents or bylaws of Borrower, nor will it violate or result in
a default or in the creation or imposition of any lien or  encumbrance  upon any
of the assets of Borrower  (immediately,  with the passage of time,  or with the
giving of notice and the passage of time) under any other contract, agreement or
instrument to which Borrower is a party or by which Borrower is bound,  nor will
it result in the acceleration of any obligation under any mortgage, lien, lease,
franchise,  license, permit,  agreement,  instrument,  order, arbitration award,
judgment, or decree, or in the termination of any license,  franchise, lease, or
permit,  to which  Borrower is a party or by which it is bound;  and it will not
violate or conflict with any other restriction of any kind or character to which
Borrower is subject.

     d. Authorization,  Binding Effect: This Restated Agreement and any document
or  instrument  to be  delivered  hereunder  or as a  supplement  hereto and the
transaction  contemplated  hereby or thereby  have been duly  authorized  and/or
executed and delivered, as appropriate, and constitute valid and legally binding
obligations  of the  Borrower  and  are  enforceable  against  the  Borrower  in
accordance with their respective terms.

     e.  No  Claims:  There  is  no  claim,  loss  contingency,  litigation,  or
proceeding whether or not pending,  threatened, or imminent against or otherwise
affecting  the  Borrower  which  involves  the  possibility  of any  judgment or
liability  not fully  covered  by  insurance  or which may  result in a material
adverse  change  in  the  business,   properties,  or  condition,  financial  or
otherwise, of the Borrower.

     f. Properties: The Borrower is the owner of its properties,  free and clear
of all security interests, encumbrances, or liens, except real estate or special
improvement  assessment  liens which arise by  operation  of law with respect to
obligations  of the  Borrower  which are not yet due and payable and except such
liens as may be listed in Exhibit E attached  hereto;  Borrower  will defend its
properties against all claims and demands of all persons at any time claiming an
interest  therein.  Inventory  is  and  shall  at  all  times  be  of  good  and
merchantable quality,  free from all defects,  encumbrances and liens except the
lien granted to the Bank hereunder.

     g. Financial  Statements:  The financial statements of the Borrower for the
fiscal year ended  December 31, 1995  furnished to Bank by Borrower are complete
and accurate  representations  of the financial  condition of Borrower as of the
respective dates thereof,  and have been prepared in accordance with GAAP. Since
the December 31, 1995 financial  statements,  there has been no material adverse
change in the financial  condition of Borrower and there has been no transaction
other than in the ordinary  course of the  business of Borrower,  except for the
purchase of the Vantare assets in Florida. The financial statements furnished to
Bank  by  the  Guarantors  are  complete  and  accurate  representations  of the
financial condition of the Guarantors as of their respective dates.

     h. Offices:  The address of the chief  executive  office and chief place of
business  of  Borrower  is Highway  63 & 9,  Cresco,  Iowa  52136.  All  records
pertaining to the Inventory and  Receivables  (including  computer  records) are
kept at Borrower's chief place of business.

                                      - 6 -

<PAGE>




     i. Taxes:  The Borrower and Guarantors have filed all federal,  state,  and
local tax returns and other  reports  they are required to file and have paid or
made adequate  provision for payment of all such taxes,  assessments,  and other
governmental charges.

     j. Compliance: To the best of its knowledge after due inquiry, the Borrower
has  complied  with all  applicable  statutes,  regulations,  ordinances,  court
decrees,  or other  directives of the United States of America,  and all states,
counties,  municipalities, and agencies with respect to the manufacture and sale
of its goods, the rendition of its services, and/or the conduct of its business.

     k. Consents,  Approvals: No consent or approval of any person, no waiver of
any  lien  or  other  similar  right,   and  no  consent,   license,   approval,
authorization,  or declaration of any governmental authority,  bureau, or agency
is or will be required in connection with the execution, delivery,  performance,
validity or  enforcement  or priority of this  Restated  Agreement  or any other
agreement,  instrument  or document to be executed or  delivered  in  connection
herewith.

     l. GAAP:  Unless  otherwise  specified  herein,  all accounting  terms used
herein shall be  interpreted,  all  determinations  with  respect to  accounting
matters hereunder shall be made, and all financial  statements and reports as to
financial  matters  required to be delivered  hereunder  shall be  prepared,  in
accordance with GAAP.

     m. Use of Property. None of the property of any Borrower has been used as a
Hazardous Substance disposal site, as a landfill or as a dump.

     n. Hazardous Substances. To the best of its knowledge after due inquiry, no
Hazard Substance or toxic substance has been stored, used, or disposed of on any
property in which Borrower holds a real estate  interest except as listed on the
Hazardous Substance Certificate attached as Exhibit F.

     o.  Subsidiaries.  Borrower has only one Subsidiary;  Featherlite  Aviation
Company.

     p. Federal Reserve  Regulations.  Borrower does not own any margin stock or
intend to carry or purchase any margin  stock or security  within the meaning of
Regulation U or the Securities Exchange Act of 1934, as amended. The Borrower is
not engaged principally,  or as one of its important activities, in the business
of extending  credit for the purpose of  purchasing or carrying any margin stock
within the  meaning of  Regulation  U of the Board of  Governors  of the Federal
Reserve  System,  as  amended.  None of the  transactions  contemplated  by this
Restated Agreement  including,  without  limitation,  the use of proceeds of any
loan  advance,  will  violate  or  result  in a  violation  of  Section 7 of the
Securities  Exchange  Act of  1934,  as  amended,  or any  regulations  pursuant
thereto,  including,  without limitation,  Regulations G, U or X of the Board of
Governors of Federal  Reserve  System,  as amended.  None of the proceeds of any
loan will be used to carry or purchase (or  refinance any borrowing the proceeds
of which were used to purchase or carry) any margin stock or any security within
the meaning of the Securities Exchange Act of 1934, as amended.


                                      - 7 -

<PAGE>



     q. Free  Disclosure.  This Restated  Agreement  and the other  documents or
instruments to be delivered  hereunder or as a supplement  hereto do not contain
any known untrue statement of a material fact or omits to state a known material
fact necessary in order to make the statements contained therein not misleading.
There is no known material fact (other than general economic conditions or facts
or information available to the public generally) that has not been disclosed in
writing to the Bank that materially adversely affects, or as far as the Borrower
can now reasonably  foresee,  may  materially  adversely  affect,  the business,
operations, prospects, properties or assets of the Borrower or any Guarantor, or
the ability of the Borrower or any  Guarantor to perform  its/their  obligations
under any document.


3.       COLLATERAL.

     As  security  for the prompt  payment in full when due  (whether  at stated
maturity, by acceleration or otherwise) of the Obligations, Borrower pledges and
grants to Bank a security interest in the following property,  whether now owned
by Borrower or hereafter  acquired and whether now existing or hereafter  coming
into existence (all being collectively referred to herein as "Collateral"):

     a.  Receivables:  All accounts and general  intangibles (each as defined in
the Uniform  Commercial Code) of Borrower  constituting any right to the payment
of money, including (but not limited to) all moneys due and to become due to the
Borrower in respect of any loans or advances for Inventory or Equipment or other
goods sold by Borrower and all tax refunds (collectively "Receivables");

     b. Instruments:  All instruments,  chattel paper or letters of credit (each
as defined in the Uniform  Commercial Code)  evidencing,  representing,  arising
from or existing in respect of,  relating to,  securing or otherwise  supporting
the  payment  of,  any  of the  Receivables,  including  (but  not  limited  to)
promissory notes, drafts, bills of exchange and trade acceptances  (collectively
"Instruments"),

     c. Inventory:  All inventory (as defined in the Uniform Commercial Code) of
Borrower,  including  all  goods  obtained  by  Borrower  in  exchange  for such
inventory,  and any products made or processed from such inventory including all
substances,   if  any,  commingled  herewith  or  added  thereto   (collectively
"Inventory");

     d. General  Intangibles:  All licenses,  franchises,  patents,  trademarks,
copyrights,  trade names, goodwill and any and all items of Borrower which would
be  classified  as  general   intangibles  under  the  Uniform  Commercial  Code
(collectively "General Intangibles").

     e. Equipment:  All equipment (as defined in the Uniform Commercial Code) of
Borrower,  including  (but  not  limited  to)  all  furniture,  fixtures,  trade
fixtures,  displays,  counters,  cash  registers,  motor  vehicles,  trucks  and
trailers (collectively "Equipment");

     f.  Contracts:  Each contract and other  agreement  relating to the sale or
other disposition of Inventory or Equipment;


                                      - 8 -

<PAGE>



     g. Documents:  All documents of title (as defined in the Uniform Commercial
Code) or other  receipts  covering,  evidencing  or  representing  Inventory  or
Equipment (collectively "Documents");

     h. Real  Estate:  All real estate in which the  Borrower  has an  ownership
interest (except homestead  property) and all of the Borrower's right, title and
interest in and to the buildings, improvements, ways, streets, alleys, passages,
rights of way, waters, water courses, rights, liberties, privileges,  tenements,
hereditaments,  and appurtenances now or hereafter hereunto appertaining to said
real estate together with the rents, issues and profits thereof and the proceeds
of the conversion therefore (collectively "Real Estate");

     i. Fixtures:  All fixtures (as defined in the Uniform  Commercial  Code) of
the Borrower (collectively  "Fixtures").  The security interest from Borrower to
Bank in the Real  Estate and  Fixtures  will,  at the  request  of the Bank,  in
addition to other  documentation which may be requested by Bank, be evidenced by
Mortgage and Security Agreements, in a form requested by the Bank.

     j. Claims:  All rights,  claims and benefits of Borrower against any person
arising  out of,  relating  to or in  connection  with  Inventory  or  Equipment
purchased by Borrower, including, without limitation, any such rights, claims or
benefits against any Person storing or transporting such Inventory or Equipment;
and,

     k. Leaseholds:  All leasehold  interests in real estate leases to which the
Borrower  is a  party.  The  security  interest  from  Borrower  to  Bank in the
leasehold  interest  of Borrower  will,  in  addition  to the  additions  to the
documents  which  may  be  requested  by  Bank,  be  evidenced  by a  collateral
assignment of real estate leases.

     l.  Proceeds:  All proceeds,  products and  accessions of and to any of the
property  described  in  clauses  (a)  through  (k)  above  in  this  Section  3
(including,  without limitation,  any proceeds of insurance thereon), and to the
extent related to any property  described in said clauses or in this clause, all
books,  correspondence,  credit  files,  records,  invoices  and  other  papers,
including without  limitation all tapes,  cards,  computer runs and other papers
and documents in the possession or under the control of Borrower or any computer
bureau or service company from time to time acting for Borrower.


4.  GUARANTORS.  Banks have required the  participation  of the  Guarantors as a
precondition to the availability of the credit arrangements  established herein.
The Guarantors, by their executions hereof,  acknowledge that the obligations of
the Borrower hereunder are enforceable in accordance with their terms, that such
are  obligations  of the Guarantors  under the personal  guarantees and that the
guarantees  are in full force and effect,  without  amendment  or defense of any
description.  Banks agree to release the guarantees if Borrower is in compliance
with all loan and financial covenants and has a year to date actual cash flow to
debt service ratio of 1.5:1 as of June 30, 1997.



                                      - 9 -

<PAGE>



5. REVOLVING LINE OF CREDIT LOAN AND PAYMENT  PROVISIONS.  The Bank  establishes
the Revolving  Line of Credit for the benefit of the Borrower for the purpose of
supplying working capital as may reasonably be required from time to time by the
Borrower. The Line of Credit is extended pursuant to the following provisions:

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 require 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  Revolving  Loans  outstanding  hereunder,   together  with  the
     principal  amount of such  Revolving Loan  requested,  shall not exceed the
     Borrowing Limit.

     (1)  Oral Requests.  Revolving Loan requests may be either written or oral,
          including a request made by telephone. In the case of an oral request,
          the Bank is authorized to make such requested advance and to rely upon
          the  authority of the person  making the request,  unless the Borrower
          directs the Bank, in writing,  not to honor oral requests  except from
          certain identified persons. The authority of the person requesting the
          advance shall be conclusively deemed authorized by the Borrower.  Oral
          requests  must be received by the Bank prior to noon on the day of the
          requested advance.

     (2)  Deposit  of Loan  Advances.  All  Revolving  Loan  advances  shall  be
          credited to an account of the Borrower at the Bank.

(b)  Promissory  Note:  The Borrower  shall  execute and deliver to the Bank the
     Revolving Line of Credit Promissory Note with this Restated Agreement.  The
     Revolving  Line of Credit  Promissory  Note,  together  with this  Restated
     Agreement  and other  documents  referred  to herein,  shall  evidence  the
     Borrower's  indebtedness  to the Bank in respect of the Revolving Loans and
     the Term Notes and the other  documents  referred to herein shall  evidence
     the Borrower's indebtedness to the Bank in respect of the Term Loans.

(c)  Interest:  In accordance with the Revolving Line of Credit Promissory Note,
     the  Borrower  shall pay  interest to the Bank upon the  outstanding  daily
     principal balance of the Loan Account,  which interest shall be computed at
     the close of each day, on the basis of actual  days  elapsed in the year of
     360 days,  at the interest rate  specified in the Revolving  Line of Credit
     Promissory Note. Until the Revolving Line of Credit  Termination Date, such
     interest  shall be paid monthly in arrears,  commencing on the first day of
     the next  succeeding  month  following  the  month in which  this  Restated
     Agreement is executed,  and continuing on the first day of each  successive
     month  thereafter.  At the Revolving Line of Credit  Termination  Date, all
     sums due hereunder shall be due and payable.  All payments shall be made to
     the Bank on or  before  the  required  due dates in  immediately  available
     funds.

(d)  Debits: The Bank shall enter as debits to the Loan Account all loans and/or
     advances made pursuant to the Loan  Documents,  and Interest and Charges in
     accordance with the Loan Documents.  The Bank shall enter as credits to the
     Loan Account all payments

                                     - 10 -

<PAGE>



         made by the Borrower on account of  indebtedness  evidenced by the Loan
         Account,  all net proceeds of Collateral which are finally paid to Bank
         in cash or solvent credits,  and other appropriate  credits.  The debit
         balance of the Loan Account shall reflect the amount of indebtedness of
         the Borrower to the Bank from time to time by reason of loans and other
         appropriate charges under this Restated Agreement.

(e)      Line of Credit  Account  Imbalance:  If at any time that portion of the
         debit balance of the Loan Account  allocable to the  Revolving  Line of
         Credit  Promissory  Note exceeds the Borrowing  Limit, at the option of
         the Bank,  the Borrower shall (i) pledge,  assign,  and transfer to the
         Bank such  additional  collateral as the Bank shall request or (ii) pay
         cash to the Bank to be credited  against the  Revolving  Line of Credit
         Promissory Note, in an amount sufficient to eliminate the excess.

(f)      Repayment:  The Borrower promises to pay the debit balances of the Loan
         Account and accrued Interest and Charges to the Bank in accordance with
         the terms of the Notes and the other Loan Documents.

(g)      Application  of Credits:  All payments  and/or  proceeds of  Collateral
         received by the Bank shall be applied to the  payment of  Interest  and
         Charges,  if  any,  to  principal  on  the  Revolving  Line  of  Credit
         Promissory  Note  or any  Term  Loans  in the  Bank's  discretion.  The
         Borrower  authorizes the Bank to charge the Interest and Charges to the
         Loan Account or to any deposit account  maintained by the Borrower with
         the Bank.

(h)      Determination of Balances: The records of the Bank shall be prima facie
         evidence as to the amounts of advances,  outstanding principal balance,
         and accrued Interest and Charges.


6.       CONFIRMATION OF TERM LOANS AND PAYMENT PROVISIONS.

     a.  Borrower is obligated to pay Bank under  various  agreements  and notes
(each a "Term Note") identified as:

                  (i) a term loan in the original  principal  amount of $300,000
         pursuant to a note dated  February  2, 1993,  maturing on July 1, 2008,
         payable to Firstar;

                  (ii)  a  term  loan  in  the  original   principal  amount  of
         $1,835,000  pursuant  to a note dated July 20,  1994,  maturing on July
         20,1999, payable to Firstar; and

                  (iii)  a  term  loan  in  the  original  principal  amount  of
         $1,400,000  pursuant to a note dated  September  30, 1995,  maturing on
         September 20, 1999, payable to Firstar.

     b. Borrower and Guarantors acknowledge and agree that the notes referred to
in   Section   6(a)  are   Obligations   of   Borrower   to  the  Bank  and  are
cross-collateralized  by the  Collateral,  and in the event of default under the
terms of any Obligation of the Borrower or any obligation of any Guarantor, that
such a default shall be deemed a default under any or all of

                                     - 11 -

<PAGE>



the Borrower's Obligations and under any or all of the obligations of Guarantors
at the option of the Bank.


7. REPAYMENT TERMS. Interest and charges shall be paid to the Bank in accordance
with the terms of this Restated  Agreement,  the notes and other loan documents.
If any term of this  Restated  Agreement is in conflict  with a term in any note
regarding  payment of  principal,  interest,  fees or  charges,  the term of the
applicable  note shall apply.  All payments  shall be made timely in immediately
available  funds.  The Bank shall  account  for loan  advances  and  payments in
accordance with its standard  practices.  The records of the Bank shall be prime
face evidence as to the amount of advances,  outstanding principal balances, and
accrued interest and charges. Bank may make recourse against any security in any
order or  grouping  it  desires  and  apply  the  proceeds  to any of  Borrower'
Obligations in its sole  discretion.  All payments by the Borrower shall be made
without setoff, counterclaim or deduction of any kind. Payments received by Bank
after 3:00 p.m. on any  Business  Day shall be deemed to be received on the next
succeeding Business Day for the purpose of calculation of interest.


8. CONDITIONS PRECEDENT TO INITIAL AND SUBSEQUENT LOANS.  Borrower shall satisfy
each of the following  conditions prior to the making of the initial loan and/or
each subsequent loan by Bank hereunder, as follows:

A.       Initial Loan.

     (1) All of the  representations  and  warranties  of Borrower  set forth in
Section 2 hereof shall be true and correct as of the date of the initial loan.

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

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

     a. A duly executed Accounts Receivable and Loan Reconciliation  Certificate
to be delivered and dated as of the date of the initial loan;

     b. A  certificate  of the  Secretary  or other  like  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 Restated  Agreement,  any document or  instrument to be delivered  pursuant
hereto or in connection  herewith and the transactions  contemplated  herein and
therein,  and  identifying  the officer or officers  authorized  to execute this
Restated  Agreement  and such other  documents  and to make  requests  for Loans
hereunder;

     c. A certificate of reasonably recent date of the Secretary of State of the
State of Iowa and a certificate of the Secretary of State of each state in which
Borrower is

                                     - 12 -

<PAGE>



qualified to do business as a foreign  corporation,  certifying that Borrower is
in good standing in each such jurisdiction;

     d. Financing  statements necessary to perfect the security interest of Bank
in the Collateral;

     e. Releases of all other security interests in the equipment of Borrower;

     f. Revolving Line of Credit Promissory Note;

     g. Execution and delivery of mortgage on property in Shenadoah, Iowa;

     h. Delivery of all original notes receivables from officers and employees;

     i.  Delivery  of an  opinion  letter  of  counsel  for  Borrower  regarding
authority, enforceability of documents and priority of liens;

     j. Evidence of all required insurance being in place;

     k. Such other documents or instruments as Bank shall reasonably request.

B.       Subsequent Loans and/or Advances.

         (1) All of the  representations and warranties of Borrower set forth in
         Section  2  hereof  shall be true  and  correct  as of the date of each
         subsequent loan and/or advance.

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

         (3) Borrower may request the making of any subsequent  Revolving  Loan,
         which amount in addition to the then  outstanding  balance of Revolving
         Loans shall not exceed the Borrowing Limit.  Borrower's  request may be
         either  written or oral,  including a request made by telephone.  If an
         oral request,  Bank is authorized to make such  requested Loan and rely
         upon the  authority of the person making the request,  unless  Borrower
         directs the Bank, in writing,  not to honor a Loan request  except from
         certain identified persons.  The authority of the person requesting the
         Loan shall be conclusively deemed authorized by Borrower. Loan advances
         shall be credited to an account of the Borrower at the Bank.

         (4) Borrower  shall have  delivered to Bank,  all in form and substance
         satisfactory  to Bank,  any  documents  or  instruments  as Bank  shall
         request.




                                     - 13 -

<PAGE>



9.       NEGATIVE COVENANTS.

     Borrower  and  Guarantors  agree  that  during  the  term of this  Restated
Agreement and so long thereafter as any  Obligations  remain  outstanding,  they
will not,  nor will they allow any  subsidiary  to,  without  the prior  written
consent of Bank:

     a. Corporate Changes:  Enter into any merger or consolidation or effect any
reorganization or recapitalization or create or fund any Subsidiary.

     b. Liens:  Mortgage,  pledge,  grant or permit to exist a security interest
in,  or lien or  encumbrance  upon,  any of their  assets or  property,  real or
personal,  tangible or intangible,  now owned or hereafter acquired in excess of
$3,000,000  except:  (i) liens in favor of Bank, (ii) liens arising by operation
of law with respect to  obligations  of Borrower not yet due and payable;  (iii)
liens for aircraft  financing  obtained by a subsidiary;  and (iv) $3,500,000 in
floor plan financing for the Vantare division.

     c. Third Party Liabilities: Assume, endorse, guarantee, or otherwise become
liable for or upon the  obligations of any person,  partnership,  corporation or
other entity  (other than  endorsements  for deposit in the  ordinary  course of
business) in excess of $7,500,000.

     d. Borrower  Liabilities:  Incur,  create,  assume,  or permit to exist any
indebtedness or liability for borrowed money in excess of $3,000,000 except: (i)
indebtedness to Bank; (ii) financing for aircraft purchases by a subsidiary; and
(iii) $3,500,000 in floor plan financing for Vantare division.

     e. Stock, Dividends:  Redeem,  purchase, or retire any of the capital stock
of Borrower or declare or pay any  dividends  (other than stock  dividends),  or
make  any  other  payment  or  distribution  upon  any of the  capital  stock of
Borrower.

     f. Investments: Make any investment in, or make any loan or advance to, any
person,  partnership,  or  corporation,  including  officers,  stockholders,  or
directors of Borrower.

     g.  Securities:  Purchase  of or  otherwise  invest in or hold  securities,
nonoperating  real  estate,  or  other  non-operating   assets,   except  direct
obligations  of the  United  States of  America  or  certificates  of deposit or
equivalent securities issued by Bank.

     h. Disposal of Assets: Enter into any sale-leaseback  transaction, or sell,
lease,  transfer,  or otherwise dispose of all or any substantial portion of its
assets,  except that  Borrower  may sell  inventory  in the  ordinary  course of
business, except a sale and lease back of the Vantare expansion project.

     i.  Regulation U: Directly or indirectly use or apply all or any portion of
the proceeds of any loans made hereunder to purchase or carry any "margin stock"
within the  meaning of  Regulation  U of the Board of  Governors  of the Federal
Reserve System, or any regulations,  interpretations or rulings  thereunder,  as
amended.


                                     - 14 -

<PAGE>



     j. Change in Business:  Make or permit any substantial  change in, or cease
in whole or in part,  the present  business of Borrower,  or engage in any other
activities apart from its present business.

     k.  Transfer  of  Inventory:  Authorize,  cause or permit the  issuance  or
execution of any negotiable warehouse receipt or bill of lading representing any
right,  title,  or interest in and to any  Inventory,  unless same are forthwith
turned over to Bank so that Bank shall  continue  to have a  perfected  security
interest in such inventory.

     l.  Ownership:  Make any change for any reason  whatsoever  in the majority
ownership, or control of Borrower without the prior written consent of Bank.

     m. Payments on Indebtedness: Borrower will not make any payments in respect
of principal or interest on any of its  indebtedness  to any Person  (other than
payments  made on  indebtedness  required or permitted  hereunder)  prior to the
stated  maturity or other due date thereof or the scheduled  payment date of any
principal  installment  in  respect  of  any of its  indebtedness,  except  that
Borrower may make (i) early payments on trade accounts in order to receive trade
discounts offered in the ordinary course of business,  and (ii) such other early
payments for which the Bank gives their prior written consent. Borrower will not
modify or enter into any  agreement as a result of which the terms of payment or
any such  indebtedness  to any Person are waived or  modified,  except  that the
Borrower may enter into  refinancing  of existing  indebtedness  if no more than
$50,000 in additional liability is incurred by the Borrower.

     n. Amendment to Certificate of  Incorporation:  Borrower will not amend its
certificate of  incorporation,  articles of  incorporation or bylaws if any such
amendment alone or in conjunction  with any other amendment or amendments  would
have a material  adverse  affect on the ability of Borrower or the Guarantors to
discharge  their  obligations  to the  Bank  or on the  ability  of the  Bank to
collect,  realize upon, or enforce  payment of any obligation of any Borrower or
any  Guarantor  to the Bank.  Borrower  shall  furnish to the Bank a copy of any
amendment to the  certificate of  incorporation,  articles of  incorporation  or
bylaws.

     o. Transactions with Affiliates:  Borrower will not (nor will it permit any
Subsidiary  to) enter  into or permit  to  remain in effect or  outstanding  any
transaction  (including,  without  limitation,  the  purchase,  sale,  lease  or
exchange of property, the rendering of any service, or the making of any loan or
advance) with or to any affiliate  except in the ordinary course of business and
pursuant  to the  reasonable  requirements  of the  business of Borrower or such
Subsidiary  and such affiliate and upon terms found by the Board of Directors of
the Borrower to be fair and  reasonable and no less favorable to the Borrower or
any such subsidiary than it would obtain in a comparable arms-length transaction
with a person not affiliated or related or connected to the Borrower or any such
Subsidiary.

     p.  Aircraft  Investment.  Allow a  subsidiary  to  incur or  maintain  any
investment in aircraft in excess of $7,000,000.


                                     - 15 -

<PAGE>



10.      AFFIRMATIVE COVENANTS.

     Borrower and Guarantors covenant and agree with Bank that they will, during
the term of this Restated  Agreement and so long  thereafter as any  Obligations
remain outstanding.

         a.       Submissions to Bank:  Furnish Bank:

                  (1) Within 90 days after the last day of each  fiscal  year of
                  Borrower,  a balance  sheet and related  statements of income,
                  retained  earnings,  and changes in financial  position,  each
                  prepared  in  reasonable  detail and in  accordance  with GAAP
                  audited  by  an  independent   certified   public   accountant
                  satisfactory to Bank and bearing an unqualified Opinion;

                  (2)  Within 30 days after the end of each  month  (except  the
                  last month of each  fiscal year for which the time shall be 60
                  days), of each fiscal year of Borrower,  a balance sheet as of
                  the end of such month and  statements  of income and  retained
                  earnings for the period from the  beginning of the fiscal year
                  to the end of such month;

                  (3)  Within thirty days after the end of each calendar month,
                  an Accounts Receivable and Loan Reconciliation Certificate;

                  (4) A balance sheet and other statement of financial  position
                  as to each  Guarantor,  which  statement  shall be in form and
                  substance  satisfactory  to Bank  within  sixty days after the
                  last day of Borrower's fiscal year;

                  (5) All public filings with the Securities & Exchange 
                  Commission and all shareholders communications at the same 
                  time they are filed or mailed; and

                  (6) Promptly,  and in form  satisfactory  to Bank,  such other
                  information as Bank may reasonably request from time to time.

     b. Insurance:  Maintain casualty  insurance coverage on its physical assets
and other insurance against other risks,  including public liability and product
liability  insurance  in such  amounts and of such types and, in any event,  not
less than as are ordinarily  carried by similar  businesses.  In the case of all
policies  insuring  property in which Bank shall have a security interest of any
kind  whatsoever,  all such  insurance  policies shall provide that the proceeds
thereof shall be payable to Borrower and Bank, as their respective interests may
appear.  All said policies or certificates  thereof,  including all endorsements
thereof and those  required  hereunder,  shall be deposited  with Bank; and such
policies  shall  contain  provisions  that no such  insurance may be canceled or
decreased without thirty (30) days prior written notice to Bank. In the event of
acquisition  of  additional  property,  real or personal,  or of  incurrence  of
additional risks of any nature,  Borrower shall cause such insurance coverage to
be  increased  or amended in such manner and to such extent as prudent  business
judgment would dictate. If Borrower shall at any time or times hereafter fail to
obtain and maintain any of the policies of insurance required herein, or fail to
pay any premium in whole or in part relating to any such policies, Bank may, but
shall not be obligated to, obtain and/or cause to be maintained insurance

                                     - 16 -

<PAGE>



coverage with respect to the assets of Borrower,  including,  at Bank's  option,
the  coverage  provided by all or any of the policies of Borrower and pay all or
any part of the  premium  thereunder,  without  waiving  any Event of Default by
Borrower,  and any sums  disbursed by Bank shall be  additional  Obligations  of
Borrower  to Bank  payable  on  demand.  Bank shall have the right to settle and
compromise  any  and  all  claims  under  any of  the  policies  required  to be
maintained by Borrower hereunder; to demand, receive, and receipt for all monies
payable  thereunder;  and to execute in the name of Borrower or Bank or both any
proof of loss,  notice, or other instruments in connection with such policies or
any loss thereunder.

     c.  Collateral:  Maintain  Collateral  which is  tangible  property in good
condition and repair, defend at Borrower expense all Collateral from all adverse
claims and shall not use any of the Collateral for any illegal purpose.

     d.   Examinations:   Permit  Bank,   through  its   authorized   attorneys,
accountants,  and  representatives,  to  examine  the  Inventory  and the books,
accounts, records, ledgers, and assets of every kind and description of Borrower
at all reasonable times.

     e. Notice of Defaults: Promptly notify Bank of any condition or event which
constitutes, or would constitute with the passage of time or giving of notice or
both, a default under this Restated  Agreement,  and promptly inform Bank of any
events or  changes in the  Business,  properties,  or  condition,  financial  or
otherwise, of Borrower,  which individually or cumulatively when viewed in light
of prior financial  statements,  may result in a material  adverse change in the
financial condition of Borrower.

     f. Corporate Status:  Maintain in good standing its corporate  existence in
the  State of Iowa and its  status  as a  foreign  corporation  qualified  to do
business in those jurisdictions where it is required to be qualified.

     g. Accounts:  Maintain their  principal  checking and business  accounts at
Bank and use Bank as their principal depository.

     h. ERISA: If Borrower shall now or hereafter  maintain an employee  benefit
plan covered by 4021(a) of the Employee  Retirement Income Security Act of 1974,
as amended (ERISA), relating to plan termination insurance, it shall:

                  (1) furnish Bank a copy of each annual  report,  together with
         any schedules or other attachments  thereto,  required to be filed with
         the Secretary of Labor or any other  governmental  official pursuant to
         ERISA;

                  (2) furnish  Bank a copy of any notice of a  reportable  event
         required to be furnished to the Pension  Benefit  Guaranty  Corporation
         (PBGC) or other governmental agency;

                  (3) notify Bank of the filing of a notice with PBGC pursuant
         to 4041 of ERISA that the plan is to be terminated; and


                                     - 17 -

<PAGE>



                  (4) notify Bank of the  institution of any  proceedings by the
         PBGC under 4042 of ERISA  promptly  after the filing of such reports or
         notices or institution of such proceedings.

     i.  Corporate  Changes:  Notify Bank not less than 30 days prior to (i) the
change of its name or use of any trade  names or (ii) any change in the  address
of the chief  executive  office and/or chief place of business of Borrower,  the
location of any records pertaining to the Receivables, and the address where any
Inventory is or may be stored.

     j.  Receivables:  Promptly notify Bank of any disputes which shall arise in
connection  with a Receivable or if a Receivable is not paid when due, or if any
petition  in  bankruptcy  or under any other  insolvency  act for the  relief of
debtors  with  respect  to a  Customer  is  filed,  or if a  Customer  makes  an
assignment for the benefit of creditors,  becomes insolvent,  ceases to carry on
its business,  or if a Borrower has notice of any facts or  circumstances  which
could  reasonably be expected to have a material adverse effect upon the ability
of Customer to pay the Receivable.

     k.  Confirmation:  Upon the  creation  of a  Receivable,  or at such  other
intervals as Bank may hereafter  determine,  Borrower shall provide Bank, at its
request, with confirmatory assignment schedules; copies of all invoices relating
to the  Receivable;  evidence of shipment  or  delivery of  Inventory;  and such
further  information and/or schedules as Bank may reasonably  require,  all in a
form satisfactory to Bank.

     l. Books and Records:  Keep  complete  and accurate  books and records with
respect to the business of the Borrower and the Collateral  consistent with good
business practice including current stock, cost, and sales records of Inventory,
accurately  itemizing  and  describing  the  kinds,  types,  and  quantities  of
Inventory, and the cost and selling price thereof.

     m.  Instruments:  At any time and from time to time upon  request  of Bank,
execute  and  deliver  to Bank,  in form  and  substance  satisfactory  to Bank,
negotiable  promissory  notes  for  any or all of the  Obligations  and/or  such
documents  in  respect  of the  Obligations  as Bank  shall  deem  necessary  or
desirable  to evidence  the  Obligations  or perfect or maintain  perfected  the
security  interest of Bank in the Collateral or which may be necessary to comply
with the  provisions  of the law of the  State  of Iowa or the law of any  other
jurisdiction  in which Borrower may then be conducting  business or in which any
of the Collateral may be located.

     n.  Subsidiaries:  Without  limitation  of any  provision of this  Restated
Agreement which prohibits any person from becoming a subsidiary,  forthwith upon
any Person  becoming a Subsidiary of any of the Borrower  after the date hereof,
such Borrower will cause such Person

          (1) to become a co-maker by executing and delivery to the Bank of such
          documents as the Bank may require,

          (2) to  secure  said  Obligation  with a first  lien upon the types of
          Collateral described in Section 3. owned by the Subsidiary.


                                     - 18 -

<PAGE>



          (3) to  deliver  to Bank  executed  filings  of  financing  statements
          necessary to perfect said security interest, and,

          (4) to provide Bank with such other  documents or  instruments as Bank
          shall reasonably  request,  including  obligating itself to all of the
          terms and conditions of this Restated Agreement.

     o. Compliance with Environmental  Laws. Borrower will comply and cause each
Subsidiary  to comply  with all  applicable  environmental,  hazardous  waste or
substance, toxic substance and underground storage laws and regulations and will
obtain any permits, licenses, or buildings, improvements, fixtures, equipment or
property required by reason of any applicable environmental,  hazardous waste or
substance, toxic substance or underground storage laws or regulations.  Borrower
shall exercise due diligence in determining the  applicability of the above laws
and  regulations and shall take the necessary steps to comply with such laws and
regulations  within a reasonable period of time after discovering any violations
of such laws and statutes.

     p. Strategic Plans.  Within sixty days after its fiscal year, Borrower will
provide Bank annually a three-year  business and financial  plan which  includes
financial projections and capital expenditure budgets.


11.      FINANCIAL COVENANTS OF BORROWER.

     So long as the  Obligations  shall remain unpaid or the Bank shall have any
commitment under this Restated Agreement, Borrower will maintain the following:

     a.  Minimum  Working  Capital:  Maintain  at all times an excess of current
assets over current liabilities of not less than $8,000,000.

     b. Minimum  Tangible Net Worth:  Maintain at all times a Tangible Net Worth
of not less than $16,500,000.

     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  $1,500,000  for  fiscal  1996  or  $2,000,000  during  any
subsequent fiscal year.

     d.  Current  Ratio:  Maintain  at all  times a ratio of  current  assets to
current liabilities of not less than 1.5 to 1.

     e. Leverage  Ratio:  Maintain at all times a ratio of total  liabilities to
Tangible  Net Worth of not  greater  than 2.25 to 1 until  March 31,  1997,  and
thereafter not greater than 2.0 to 1.

     f. Cash  Flow/Debt:  Beginning  on  December  31,  1996,  maintain  a ratio
measured  quarterly on a year to date actual  basis,  of Operating  Cash Flow to
Total Debt Service of not less than 1.25 to 1. As of June 30,  1997,  maintain a
ratio of 1.5 to 1 measured the same way.

                                     - 19 -

<PAGE>



As of September 30, 1997, and quarterly thereafter, maintain a ratio of 1.5 to 1
measured on a trailing four-quarter average basis.


12.      EVENTS OF DEFAULT AND ACCELERATION.

     The occurrence of any one or more of the following  events shall constitute
an Event of Default hereunder (each an "Event of Default"):

     a. Payments:  Default in the payment of any principal,  interest,  or other
charges  in  respect of any of the  Obligations  as and when due;  or default in
payment  of any  principal,  interest  or other  charges by any  Guarantor  with
respect to any of their obligations.

     b.  Covenants:  Default in the observance or performance of any covenant or
agreement  of any  Borrower  or  Guarantor  herein set forth or set forth in any
agreement, note, or instrument heretofore, now or hereafter executed by Borrower
or Guarantor in favor of Bank;

     c. Representations: If any representation, warranty, certificate, schedule,
or other  information  made or furnished by any Borrower or Guarantor  herein or
pursuant hereto is or shall be untrue or misleading in any material respect;

     d. Third Party  Obligations:  Default in the  performance  of any  material
obligation of Borrower or Guarantor to any third party in excess of $250,000;

     e. Losses:  Loss, theft,  damage, or destruction of any substantial portion
of the property of Borrower  for which there is either no insurance  coverage or
for which, in the opinion of Bank, there is insufficient  insurance coverage, or
the making of any levy,  seizure,  or attachment upon the Collateral or upon any
substantial portion of other property of Borrower by any third party;

     f.  Insolvency:  Insolvency  of any Borrower or Guarantor or if a creditors
committee is appointed for the business of any Borrower or Guarantor;  or if any
Borrower or Guarantor  makes an assignment  for the benefit of creditors,  or is
adjudicated bankrupt, or if a petition in bankruptcy or for reorganization or to
effect a plan of arrangement  with creditors is filed by or against any Borrower
or  Guarantor;  or if any  Borrower  or  Guarantor  applies  for or permits  the
appointment  of a receiver or trustee for any of its  property or assets,  or if
any such receiver or trustee is appointed for any of its property or assets;  or
if any of the above  actions  or  proceedings  whatsoever  are  commenced  by or
against any  Borrower or any  Guarantor  of or any other party liable for any of
the obligations;

     g.  Dissolution:  If a  proceeding  is filed  or  commenced  by or  against
Borrower for its  dissolution  or  liquidation;  or if Borrower  voluntarily  or
involuntarily dissolves or is dissolved, terminates or is terminated;

     h.   Prohibition  on  Business:   If  Borrower  is  permanently   enjoined,
restrained,  or in any way prevented by court order from  conducting  all or any
material part of its business affairs; or

                                     - 20 -

<PAGE>

     i. Termination of Guaranty:  Termination for any reason of any guaranty of,
or contract of surety for, the Obligations,  or termination of any subordination
agreement for the benefit of Banks.

     If any Event of Default shall occur, then or at any time thereafter,  while
such Event of Default shall continue, Bank may declare all Obligations to be due
and payable, without notice, protest,  presentment,  or demand, all of which are
hereby expressly waived by the Borrower.


13.      RIGHTS AND REMEDIES.

     Bank shall have,  by way of example and not of  limitation,  the rights and
remedies  set  forth in  Section  13 at all  times  prior to  and/or  after  the
occurrences of an Event of Default and shall have all of the rights and remedies
enumerated herein after the occurrence of an Event of Default;

     a. Attorney in Fact:  Without limiting any rights or powers granted by this
Restated  Agreement  to the Bank while no Event of Default has  occurred  and is
continuing,  upon the  occurrence  and  during the  continuance  of any Event of
Default the Bank is hereby  appointed the  attorney-in-fact  of the Borrower for
the purpose of carrying out the provisions of this Restated Agreement and taking
any action and executing any  instruments  which the Bank may deem  necessary or
advisable   to   accomplish   the  purposes   hereof,   which   appointment   as
attorney-in-fact  is irrevocable and coupled with an interest.  Without limiting
the  generality of the  foregoing,  so long as the Bank shall be entitled  under
this Restated  Agreement to make  collections in respect of the Collateral,  the
Bank shall have the right and power to receive,  endorse, and collect all checks
made payable to the order of the Borrower representing any dividend, payment, or
other  distribution in respect of the Collateral or any part thereof and to give
full discharge for the same.

     b.  Premises:  Bank shall have the right to enter  and/or  remain  upon the
premises of any Borrower  without any obligation to pay rent to such Borrower or
others,  or any other place or places where any of the Collateral is located and
kept and: (i) remove  Collateral  therefrom to the premises of Bank or any agent
of Bank, for such time as Bank may desire, in order to maintain,  collect,  sell
and/or  liquidate  the  Collateral  or; (ii) use such  premises,  together  with
materials,  supplies,  books and records of  Borrower,  to  maintain  possession
and/or the condition of the Collateral,  and to prepare the Collateral for sale,
liquidation, or collection. Bank may require Borrower to assemble the Collateral
and make it  available  to Bank at a place  to be  designated  by Bank  which is
reasonably convenient to both parties.

     c.  Setoff:  Bank  shall  have a right to  set-off,  without  notice to the
Borrower, any and all deposits or other sums at any time or times credited by or
due from Bank to any of the  Borrower,  whether  in a special  account  or other
account or  represented  by a certificate  of deposit  (whether or not matured),
which deposits and other sums shall at all times constitute  additional security
for the  Obligations  and may be set-off at any time  against all or any part of
the  Obligations on which any of the Borrower is an obliger  whether or not they
are then due and  whether  other  security  held by Bank is  deemed  by it to be
adequate.


                                     - 21 -

<PAGE>



     d.  Uniform  Commercial  Code Rights:  Bank shall have,  in addition to any
other rights and remedies  contained in this Restated  Agreement,  the Notes and
any other agreements,  guarantees, notes, instruments, and documents heretofore,
now,  or at any time or times  hereafter  executed  by any of the  Borrower  and
delivered to Bank,  all of the rights and remedies of a secured  party under the
Uniform  Commercial  Code in force  in the  State of Iowa as of the date of this
Restated  Agreement,  all of which rights and remedies shall be cumulative,  and
nonexclusive, to the extent permitted by law.

     e.  Notice of Sale:  Any notice  required  to be given by Bank of a sale or
other  disposition or other  intended  action by Bank with respect to any of the
Collateral,  or otherwise,  made in  accordance  with the terms of this Restated
Agreement  at least  fourteen  (14) days prior to such  proposed  action,  shall
constitute  fair and reasonable  notice to Borrower of any such action.  The net
proceeds  realized  by Bank  upon any  such  sale or  other  disposition,  after
deduction of the expenses of retaking,  holding, preparing for sale, selling, or
the like and reasonable  attorneys'  fees and other  expenses  incurred by Bank,
shall be applied toward  satisfaction of the Obligations  hereunder.  Bank shall
account to Borrower for any surplus realized upon such sale or other disposition
and the Borrower shall remain liable for any deficiency. The commencement of any
action,  legal or equitable,  shall not affect the security  interest of Bank in
the  Collateral  until the  Obligations  hereunder or any judgment  therefor are
fully paid.

     f. Appointment:  The Borrower hereby irrevocably appoints Bank its true and
lawful attorney,  with full power of substitution,  in Bank's name or otherwise,
for Bank's sole use and benefit,  but at Borrower cost and expense, to exercise,
if Bank shall elect after an event of default has occurred  (whether or not Bank
then elects to exercise any other of its rights  arising upon  default),  all or
any of the  following  powers  with  respect  to all or any  Accounts  which are
Collateral:

          1. To execute on Borrower's behalf  assignments of any or all Accounts
          which are Collateral to Bank, and to notify account debtors thereunder
          to make payments directly to Bank;

          2. To demand,  sue for, collect,  receive and give acquittance for any
          and all moneys due or to become due upon or by virtue thereof;

          3. To receive,  take, endorse,  assign and deliver any and all checks,
          notes,  drafts,  documents  and other  negotiable  and  non-negotiable
          instruments  and chattel paper taken or received by Bank in connection
          therewith;

          4. To settle, compromise,  compound, prosecute or defend any action or
          proceeding with respect thereto;

          5. To sell, transfer,  assign or otherwise deal in or with the same or
          the proceeds  thereof or the relative  goods, as fully and effectually
          as if Bank were the absolute owner thereof; and


                                     - 22 -

<PAGE>



          6. To extend the time of payment of any or all thereof and to make any
          allowance and other adjustments with reference thereto.

     Any funds collected pursuant to such powers shall be applied to the payment
of the Obligations.  The exercise by Bank of, or failure to so exercise,  any of
the foregoing authority,  shall in no manner affect Borrower's liability to Bank
on any of the Obligations. Bank shall be under no obligation or duty to exercise
any of the powers hereby conferred upon it and it shall be without liability for
any  act  or  failure  to  act  in  connection  with  the  collection  of or the
preservation of any rights under such accounts.  Bank shall not be bound to take
any steps  necessary  to  preserve  rights in any  instrument  or chattel  paper
against prior parties.


14.      TERM OF AGREEMENT.

     The term of this Restated Agreement shall commence on the Date of Agreement
and shall  continue in full force and effect  until all  Obligations  shall have
been fully paid and satisfied. No termination shall affect in any way the duties
of the Borrower  hereunder or the security interest of Bank in the Collateral so
long as any Obligations are outstanding;  and, notwithstanding such termination,
Borrower  shall  continue  to  assign  Receivables  to Bank  and  turn  over all
collections  to Bank as herein  provided,  and Bank shall  retain  the  security
interest,  lien and rights granted to it hereunder until all the Obligations are
paid in full and satisfied.


15.      GENERAL PROVISIONS.

     a. No Waiver: The failure of Bank at any time or times hereafter to require
strict performance by any Borrower of any of the provisions,  warranties, terms,
and conditions in this Restated  Agreement or in any other agreement,  guaranty,
note, instrument,  or document now or at any time or times hereafter executed by
such  Borrower and  delivered to Bank shall not waive,  affect,  or diminish any
right  of Bank at any time or  times  hereafter  to  demand  strict  performance
thereof.  No rights of Bank hereunder shall be deemed to have been waived by any
act or knowledge of Bank, its agents, officers or employees,  unless such waiver
is contained in an instrument in writing signed by an officer of Bank. No waiver
by Bank of any of its  rights  shall  operate  as a waiver  of any  other of its
rights or any of its rights on a future occasion.

     b. Notice: Any demand or notice required or permitted to be given hereunder
shall be deemed effective when deposited in the United States mail, addressed to
Bank at Bank or to  Borrower  at the  address  shown in 2(h),  or to such  other
address as may be provided in writing  prior to the giving of such notice by the
party to be notified.

     c.  Entire  Understanding:  This  Restated  Agreement  contains  the entire
understanding  between  the  parties  hereto  with  respect to the  transactions
contemplated  herein  and such  understanding  shall not be  modified  except in
writing signed by or on behalf of the parties  hereto.  This Restated  Agreement
supersedes and replaces the 1991 Credit Agreement and all amendments thereto but
does not in any way impair any previously  executed  promissory  notes which are
still outstanding nor discontinue or impair any previously granted Collateral.


                                     - 23 -

<PAGE>

     d. Invalidity: Wherever possible, each provision of this Restated Agreement
shall  be  interpreted  in  such  manner  as to be  effective  and  valid  under
applicable  law.  Should any  portion of this  Restated  Agreement  be  declared
invalid  for any  reason in any  jurisdiction,  such  declaration  shall have no
effect upon the remaining portions of this Restated Agreement,  and the entirety
of this Restated  Agreement shall continue in full force and effect in all other
jurisdictions  and said  remaining  portions of this  Restated  Agreement  shall
continue  in full  force  and  effect  in the  subject  jurisdiction  as if this
Restated Agreement had been executed with the invalid portions thereof deleted.

     e. Waiver of Bond:  If Bank seeks to take  possession  of any or all of the
Collateral by court process, the Borrower hereby irrevocably waive any bonds and
any surety or security  relating thereto required by any statute,  court rule or
otherwise  as an  incident  to  such  possession,  and  waives  any  demand  for
possession  prior to the  commencement  of any suit or  action to  recover  with
respect thereto.

     f. Successors and Assigns:  The provisions of this Restated Agreement shall
be binding upon and shall inure to the benefit of the  successors and assigns of
Bank and the  Borrower;  provided,  however,  the Borrower may not assign any of
their rights or delegate any of their  obligations  hereunder  without the prior
written consent of Bank.

     g. Choice of Law, Forum: This Restated  Agreement is and shall be deemed to
be a contract  entered  into and made  pursuant to the laws of the State of Iowa
and shall in all  respects be  governed,  construed,  applied,  and  enforced in
accordance  with the laws of said  state and any  action to  enforce,  construe,
invalidate  or modify  this  Restated  Agreement  shall be brought in a court of
competent jurisdiction in Linn County, Iowa. Borrower waives the right to demand
a trial by jury in any action hereunder.

     h. Fees: If, prior hereto and/or at any time or times hereafter, Bank shall
employ  counsel  in  connection  with  the  execution  and  consummation  of the
transactions  contemplated by this Restated Agreement or to commence,  defend or
intervene, file a petition,  complaint, answer, motion or other pleadings, or to
take any other action in or with respect to any suit or  proceeding  (bankruptcy
or otherwise) relating to this Restated Agreement, the Collateral,  or any other
agreement,  guaranty,  note, instrument,  or document heretofore,  now or at any
time or times  hereafter  executed by any Borrower and  delivered to Bank, or to
protect,  collect,  lease,  sell,  take  possession  of or liquidate  any of the
Collateral,  or to attempt to enforce or to enforce any security interest in any
of the Collateral, or to enforce any rights of Bank hereunder, whether before or
after  the  occurrence  of  any  Event  of  Default,  or to  collect  any of the
Obligations,  then in any of such events, all of the reasonable  attorneys' fees
arising  from  such  services,  and any  expenses,  costs and  charges  relating
thereto, shall be part of the Obligations,  payable on demand and secured by the
Collateral.

     i.  Counterparts:  This Restated Agreement 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.

     j. References: Each reference herein to Bank shall be deemed to include its
successors  and  assigns,  and each  reference  to the Borrower and any pronouns
referring thereto

                                     - 24 -

<PAGE>


as used herein shall be construed in the masculine,  feminine,  neuter, singular
or plural, as the context may require,  and shall be deemed to include the legal
representatives,  successors  and assigns of the Borrower,  all of whom shall be
bound by the provisions hereof.

     k. Joint and Several:  The term  "Borrower" as used herein  shall,  if this
Restated  Agreement  is signed  by more than one  borrower,  means  unless  this
Restated Agreement  otherwise provides or unless the context otherwise requires,
the  "Borrower  and each of them"  and each and every  representation,  promise,
agreement and undertaking shall be joint and several except that the granting of
the security  interest,  right of set-off and lien, shall be by each Borrower in
its  respective  properties.  If there is more  than one  Borrower,  any loan or
advance  hereunder  shall be  deemed  to be made at the  request  of and for the
benefit of each Borrower (since Borrower are affiliates  and/or their respective
businesses are closely integrated and interrelated).

     l. Headings:  The section headings herein are included for convenience only
and shall not be deemed to be a part of this Restated Agreement.

     m.  Participations:  Bank may, at its  option,  sell  participations  in or
assign all or part of the Revolving  Line of Credit or the Term Loans to another
Bank or other entity.  Bank may furnish any information  concerning  Borrower or
any  subsidiary of Borrower in the  possession of Bank from time to time to such
assignee or  participant.  Borrower  shall not assign any rights or  obligations
hereunder without the prior written consent of Bank.


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.

                                 FEATHERLITE MFG., INC.


                                 BY:/s/ Conrad Clement
                                    Conrad Clement, President

                                 BY:/s/ Tracy J. Clement
                                    Tracy J. Clement, Executive Vice President


                                    /s/ Conrad Clement
                                    Conrad Clement, individually

(Signatures continue)

                                     - 25 -

<PAGE>


                                     /s/ Larry Clement
                                     Larry Clement, individually


                                     /s/ Kathy Clement
                                     Kathy Clement, individually

                                     /s/ Tracy Clement
                                     Tracy Clement, individually


                                     /s/ Nancy Clement
                                     Nancy Clement, individually


                                     FIRSTAR BANK IOWA, N.A.


                                     BY:/s/ Mitch McElree
                                        Mitch McElree, Vice President



                                     - 26 -

<PAGE>



Exhibit A        Accounts Receivable and Loan Reconciliation Certificate
Exhibit B        Guaranty
Exhibit C        Revolving Line of Credit Promissory Note
Exhibit D        Trade Names, Business Changes
Exhibit E        Liens
Exhibit F        Hazardous Substance Certificate



                                     - 27 -

<PAGE>



                                   EXHIBIT "A"

a.   Receivables.  All accounts and general  intangibles (each as defined in the
     UCC) of the  Borrower  constituting  any  right to the  payment  of  money,
     including  (but not  limited  to) all  moneys  due and to become due to the
     Borrower  in  connection  with any loans or advances  or for  inventory  or
     equipment  or  other  goods  sold  by the  Borrower  and  all  tax  refunds
     (collectively, "Receivables");

b.   Instruments.  All instruments,  chattel paper or letters of credit (each as
     defined in the UCC) evidencing,  representing,  arising from or existing in
     respect of, relating to,  securing or otherwise  supporting the payment of,
     any of the  Receivables,  including (but not limited to) promissory  notes,
     drafts,   bills  of   exchange   and   trade   acceptances   (collectively,
     "Instruments");

c.   Inventory.  All  inventory  (as  defined  in the  UCC)  of  the  Borrowers,
     including  all  goods  obtained  by  the  Borrower  in  exchange  for  such
     inventory, and any products made or processed from such inventory including
     all   substances,   if  any,   commingled   therewith   or  added   thereto
     (collectively, "Inventory");

d.   General Intangibles. All franchises,  patents, trademarks, goodwill and any
     and all  items  of the  Borrower  which  would  be  classified  as  general
     intangibles under the UCC (collectively, "General Intangibles").

e.   Documents. All documents of title (as defined in the UCC) or other receipts
     covering,  evidencing or representing Inventory or Equipment (collectively,
     "Documents");

f.   Real Estate and Fixtures.  All Borrower's right,  title and interest in and
     to the buildings,  improvements, ways, streets, alleys, passages, rights of
     way,  waters,  water courses,  rights,  liberties,  privileges,  tenements,
     hereditaments,  and appurtenances now or hereafter hereunto appertaining to
     (Describe  Real  Estate)  (collectively,  "Real Estate and  Fixtures")  (as
     defined in the UCC).  The building is known as the  Featherlite  Rework and
     Delivery Building. See attached Exhibit F;

h.   Claims. All rights,  claims and benefits of the Borrower against any Person
     arising out of,  relating to or in connection  with Inventory  purchased by
     the Borrower,  including,  without limitation,  any such rights,  claims or
     benefits  against any Person  storing or  transporting  such  Inventory  or
     Equipment;

j.   Proceeds.  All  proceeds,  products  and  accessions  of  and to any of the
     property  described  in  clauses  (a)  through  (i)  above in this  section
     (including,  without limitation, any proceeds of insurance thereon), and to
     the extent  related to any  property  described  in said clauses or in this
     clause all books, correspondence, credit files, records, invoices and other
     papers,  including without limitation all tapes,  cards,  computer runs and
     other papers and  documents in the  possession  or under the control of the
     Borrower or any computer bureau or service company from time to time acting
     for the Borrower.

                                     - 28 -

<PAGE>



And  as  additional  collateral,  all  additions  to  and  replacements  of  the
collateral,  and  all  accessories,  accessions,  parts  and  equipment  now  or
hereafter  affixed thereto or used in connection  therewith and the proceeds and
products from all such collateral.



                                     - 29 -