February 8, 1999




Mr. Jeffery Mason, CFO
Featherlite, Inc.
Hwy. 63 & 9
Cresco, IA  52136

Re:      Amendment of Revolving Loan and Security Agreement

Dear Mr. Mason:

Please refer to the Revolving Loan and Security Agreement by and between Firstar
Financial Services, a division of Firstar Bank Milwaukee, N.A. ("FFS") and
Featherlite, Inc., dated September 24, 1998 ("Agreement"). At your request, FFS
has agreed to amend the Agreement as follows:

1.       The following shall be added to Section 2. DEFINITIONS:

         "(e)     "Capital Expenditures" means the aggregate amount of all
                  purchases or acquisition of fixed assets (including real
                  estate, motor vehicles, equipment, fixtures, leases and any
                  other items) that would be capitalized on Debtor's books under
                  Generally Accepted Accounting Principles (defined below). The
                  term "Capital Expenditures" will not include expenditures or
                  charges for the usual and customary maintenance, repair and
                  retooling of any fixed assets or the acquisition of new
                  tooling in the ordinary course of Debtor's business.

         (f)      "Generally Accepted Accounting Principles" means the latest
                  promulgated generally accepted accounting principles by the
                  American Institute of Certified Public Accountants ( "AICPA"),
                  as supplemented by any pronouncements by the AICPA or the
                  Financial Accounting Standards Board ("FASB") consistently
                  applied by Debtor to all relevant financial periods.

         (g)      Debt" means the total of all liabilities of Debtor, on a
                  consolidated basis, which would properly appear on Debtor's
                  balance sheet prepared in accordance with Generally Accepted
                  Accounting Principles (as defined above).

         (g)      "Debt To Tangible Net Worth Ratio" means the relationship,
                  expressed as a numerical ratio, between: (i) the total of all
                  liabilities of Debtor, on a consolidated basis, which would
                  appear on Debtor's balance sheet in accordance with Generally
                  Accepted Accounting Principles (as defined above); and (ii)
                  the Debtor's Tangible Net Worth (as defined below).

<PAGE>

         (g)      "Tangible Net Worth" means the total of all assets properly
                  appearing on Debtor's balance sheet on a consolidated basis in
                  accordance with Generally Accepted Accounting Principles (as
                  defined above), less the sum of the following: (i) the book
                  amount of all such assets which would be treated as
                  intangibles under Generally Accepted Accounting Principles
                  (including, without limitation, all such items as goodwill,
                  trademarks, trademark rights, trade names, trade name rights,
                  brands, copyrights, patents, patent rights, licenses, deferred
                  charges and unamortized debt discount and expense, capitalized
                  tooling, dies, patterns, jigs and the like, and leasehold
                  improvements); (ii) any write-up in the book value of any such
                  assets resulting from a revaluation thereof subsequent to the
                  date of this Agreement; (iii) all reserves, including reserves
                  for depreciation, obsolescence, depletion, insurance and
                  inventory valuation, but excluding contingency reserves not
                  allocated for any particular purpose and not deducted from
                  assets; (iv) the amount, if any, at which the shares of stock
                  of Debtor appear on the asset side of such balance sheet; (v)
                  all liabilities of Debtor shown on such balance sheet
                  (excluding deferred tax liabilities and all indebtedness
                  subordinated to Lender on terms satisfactory to Lender); (vi)
                  all investments in foreign affiliates and nonconsolidated
                  domestic affiliates; (vii) advances or loans to employees,
                  officers, directors; (viii) interest or finance charge
                  receivables; (ix) deposits; (x) miscellaneous non-trade
                  receivables; (xi) prepaid or deferred assets (other than for
                  income taxes and insurance); (xii) net book value of dies,
                  molds, tooling, jigs, patterns and the like; and (xiii) net
                  book value of any leasehold improvements on property owned by
                  party(ies) other than Debtor or Debtor's principals.

         (g)      "EBITDA" means for any given fiscal period (i) all income
                  derived from Debtor's operations on a consolidated basis
                  (excluding any extraordinary or nonrecurring gain); and (ii)
                  all interest, taxes, depreciation and amortization properly
                  recordable by Debtor.

         (h)      "Fixed Charge Coverage Ratio" means the numerical ratio
                  between EBITDA and the sum of the following items for any
                  given fiscal period: accrued interest on all nonsubordinated
                  indebtedness (or portion thereof), principal payments on all
                  indebtedness (excluding FFS' revolving loan, the wholesale
                  floorplan financing from Deutsche Financial Services and
                  payoffs of debt on aircraft financing from the proceeds of
                  sale of such aircraft), accrued income taxes and any Capital
                  Expenditures (or portion thereof) internally financed by
                  Debtor, but excluding that portion of Capital Expenditures
                  made by Debtor which qualify for term loan financing under
                  existing term loan facilities which have not been drawn upon
                  for such purposes as of the date of the Fixed Charge Coverage
                  Ratio calculation."

 2.      The first sentence of subsection (a) Term, Termination, Prepayment
         of Section 9. TERMINATION shall be amended to read:

<PAGE>

         "This  Agreement  may be  terminated  at any time upon  Debtor's  
         default by written  notice from Lender to Debtor."

 3.      The following financial covenants shall be added to Section 12.
         ADDITIONAL TERMS as follows:

         "(c)     Capital Expenditures. Except for fixed asset acquisitions
                  evidenced by a binding purchase order or agreement made prior
                  to the date of this Agreement, Debtor shall not acquire or
                  expend sums for the acquisition of fixed assets such as real
                  estate, equipment, motor vehicles, aircraft (excluding
                  aircraft purchased for sale in the ordinary course of
                  business), real estate or leasehold improvements, fixtures or
                  the like (including, without limitation, the principal amount
                  of any real estate, motor vehicles, equipment, fixtures and/or
                  real estate or leasehold improvements acquired pursuant to a
                  lease which would be capitalized on Debtor's books under
                  Generally Accepted Accounting Principles, as defined in
                  Section 2. DEFINITIONS) for Debtor's fiscal year ending
                  December 31, 1998 in excess of $4,000,000.00; for Debtor's
                  fiscal year ending December 31, 1999 in excess of
                  $6,600,000.00; and for each of Debtor's fiscal years ending
                  December 31, 2000 and thereafter in excess of $4,000,000.00
                  per year. The maximum limit set forth above shall not include
                  expenditures or charges for the usual and customary
                  maintenance, repair or retooling of any fixed assets; or the
                  acquisition of new tooling in the ordinary course of Debtor's
                  business.

         (d)      Debt to Tangible Net Worth. Debtor shall maintain at all times
                  for the periods noted a ratio of Debt to Tangible Net Worth
                  (as defined in Section 2. DEFINITIONS) not greater than 4.25
                  to 1 as of December 31, 1998; 4.0 to 1 for the six month
                  period ending June 30, 1999; 3.75 to 1 for the six month
                  period ending December 31, 1999; 3.65 to 1 for the six month
                  period ending June 30, 2000; and not greater than 3.5 to 1 for
                  the six month periods ending December 31, 2000 and thereafter,
                  to be tested by Lender semi-annually, based on Debtor's
                  internally prepared financial statements and/or Lender's or a
                  certified public accounting firm's audit of Debtor's financial
                  records.

         (e)      Minimum EBITDA. Debtor shall achieve EBITDA (as defined in
                  Section 2. DEFINITIONS) of at least $6,500,000.00 for Debtor's
                  fiscal year ending December 31, 1998; at least $8,000,000.00
                  for Debtor's fiscal year ending December 31, 1999, and at
                  least $11,000,000.00 for each of Debtor's fiscal years ending
                  December 31, 2000 and thereafter, to be tested by Lender based
                  upon Debtor's internally prepared financial statements and/or
                  Lender's or a certified public accounting firm's audit of
                  Debtor's financial records.

         (f)      Minimum Fixed Charge Coverage Ratio. Debtor shall maintain at
                  all times a Fixed Charge Coverage Ratio (as defined in Section

<PAGE>

                  2. DEFINITIONS) equal to or exceeding 1.25 to 1 for all fiscal
                  periods to be tested quarterly by Lender based upon Debtor's
                  internally prepared financial statements and/or Lender's or a
                  certified public accounting firm's audit of Debtor's financial
                  records.

In all other respects, the Agreement shall remain unchanged and in full force
and effect.

The foregoing amendments are contingent upon the approval of the participant in
this loan: LaSalle National Bank.

If the above agrees with your understanding and approval, please indicate same
by signing the original of this letter and returning it to the undersigned.
(NOTE: If you return executed documents via facsimile, you must also return the
original executed documents. You agree FFS may rely on facsimile signatures for
all purposes and without any liability to you.) If the preconditions (if any) to
this amendment are not satisfied or if this amendment letter is not executed and
returned to FFS on or before February 12, 1999, then the proposed amendments
herein may be withdrawn by FFS by written notice to you. The amendments set
forth herein and any accompanying documents will be deemed effective and
accepted in Milwaukee, Wisconsin, upon our receipt of the executed documents.

                                          Sincerely,



                                          James G. Tepp
                                          Vice President

cag
Enclosure
cc:  Gilbert L. Southwell, III



Agreed to this ___ day of _________________ , 1998.
                            
FEATHERLITE, INC.



By: __________________________________
Name and Title: ________________________