Document:

AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT

                           J.B. POINDEXTER & CO., INC.
                              1100 Louisiana Street
                                   Suite 5400
                              Houston, Texas 77002

                                                       As of February 25, 2000

Congress Financial Corporation
1133 Avenue of the Americas
New York, New York 10036

Ladies and Gentlemen:

     Congress  Financial  Corporation  ("Lender"),  J.B.  Poindexter & Co., Inc.
("Borrower"),  EFP Corporation  ("EFP"),  Lowy Group,  Inc.  ("Lowy"),  Magnetic
Instruments Corp. ("MIC"), Morgan Trailer Mfg. Co. ("Morgan"), Truck Accessories
Group, Inc. ("TAG"),  and Raider  Industries Inc.  ("Raider";  and together with
EFP,  Lowy,  MIC,  Morgan  and  TAG,  each  individually,   a  "Guarantor"  and,
collectively,  "Guarantors") have entered into certain financing arrangements as
set forth in the Loan and Security Agreement,  dated as of June 28, 1996, by and
among Lender, Borrower and Guarantors, as amended by Amendment No. 1 to Loan and
Security  Agreement,  dated May 13, 1998,  Amendment  No. 2 to Loan and Security
Agreement,  dated as of June 30, 1998,  and Amendment No. 3 to Loan and Security
Agreement,  dated as of June 24, 1999 (and as amended  hereby and as  heretofore
amended or may hereafter be amended, modified, supplemented,  extended, renewed,
restated or replaced, the "Loan Agreement"), together with all other agreements,
documents,  supplements and  instruments  now or at any time hereafter  executed
and/or  delivered by Borrower,  Guarantors or any other  person,  with, to or in
favor of Lender in connection  therewith  (all of the  foregoing,  together with
this Amendment and the other agreements and instruments delivered hereunder,  as
the  same  now  exist  or may  hereafter  be  amended,  modified,  supplemented,
extended,   renewed,   restated  or  replaced,   collectively,   the  "Financing
Agreements").  For purposes of this Amendment,  unless otherwise defined herein,
all capitalized terms used herein,  shall have the respective  meanings ascribed
to them in the Loan Agreement.

(a)  Borrower  and  Guarantors  have  requested  that Lender  enter into certain
amendments to the Financing Agreements to reduce the Interest Rate on Prime Rate
Loans and Eurodollar Rate Loans,  reduce the amount of the servicing fee charged
by Lender to Borrower and Guarantors, reduce the letter of credit fee charged by
Lender in respect of Letter of Credit Accommodations, reduce the unused line fee
and extend the term of the Financing  Agreements.  Lender is willing to do so to
the extent and subject to the terms and conditions set forth herein.
(b)
(c)  In  consideration  of  the  foregoing,  the mutual agreements and covenants
contained  in  this  Amendment  No.  4 to  Loan  and  Security  Agreement  (this
"Amendment"),  and other  good and  valuable  consideration,  the  adequacy  and
sufficiency of which are hereby  acknowledged,  Borrower,  Guarantors and Lender
agree as follows:
(d)

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<PAGE>

2.   Definitions.
3.
(a)  Additional   Definition.   As  used  herein  and  in  the  other  Financing
Agreements,  the term "Net Worth" shall mean,  for any period as to Borrower and
its Subsidiaries,  on a consolidated  basis for such period, the amount equal to
the assets of Borrower and its  Subsidiaries  minus the  liabilities of Borrower
and its Subsidiaries as reported on the  consolidated  balance sheet of Borrower
as  determined  in accordance  with GAAP,  and the Loan  Agreement and the other
Financing  Agreements  shall be deemed  and is hereby  amended  to  include,  in
addition and not in limitation, such term as defined herein.
(b)
(i)  Amendment to Definition. Effective with respect to interest accruing on and
after March 1, 2000,  all references to the term  "Interest  Rate"  contained in
Section 1.50 of the Loan  Agreement  shall be deemed and each such  reference is
hereby  amended to mean,  as to Prime Rate Loans,  a rate per annum equal to the
Prime Rate and,  as to  Eurodollar  Rate Loans,  a rate of two (2%)  percent per
annum in excess of the Adjusted  Eurodollar  Rate (based on the Eurodollar  Rate
applicable for the Interest  Period  selected by Borrower as in effect three (3)
Business Days after the date of receipt by Lender of the request of Borrower for
such  Eurodollar  Rate Loans in accordance  with the terms hereof,  whether such
rate is higher or lower than any rate previously quoted to Borrower);  provided,
that,  the Interest Rate shall mean the rate equal to two (2%) percent per annum
in excess of the interest  rate (the "Default  Interest  Rate")  otherwise  then
payable by  Borrower on Prime Rate Loans as to all Loans,  at  Lender's  option,
without  notice,  for  the  period  on and  after  the  date of  termination  or
non-renewal  hereof,  or the date of the  occurrence of any Event of Default and
for so long as such Event of Default is  continuing  as determined by Lender and
on the Loans at any time  outstanding  to the  extent  in excess of the  amounts
available to Borrower  under Section 2 hereof  (whether or not such  excess(es),
arise or are made with or without Lender's knowledge or consent and whether made
before or after an Event of Default).  In addition to and not in  limitation  of
the right of Lender to charge the  Default  Interest  Rate,  if the Net Worth of
Borrower and its  Subsidiaries  at any time is less than  negative  $18,000,000,
Lender may, at its option,  without in any way  limiting  the right of Lender to
declare an Event of Default or  otherwise  exercise any other rights or remedies
hereunder  or under any of the other  Financing  Agreements,  applicable  law or
otherwise,  increase  the rate of  interest  in the case  where the  non-Default
Interest Rate is then in effect, to a rate of one-quarter of one (1/4% ) percent
per annum in excess of the Prime  Rate per annum as to Prime Rate Loans and to a
rate of two and  one-half (2 1/2%)  percent per annum in excess of the  Adjusted
Eurodollar Rate as to Eurodollar  Rate Loans,  and in the case where the Default
Interest  Rate is then in  effect,  to a rate of two and  one-quarter  (2  1/4%)
percent per annum in excess of the Prime Rate as to all Loans.
b.
4.   Letter  of  Credit  Fee.  Section  2.2(b) of the Loan  Agreement  is hereby
deleted and replaced with a new Section 2.2(b) as follows:
5.
     a. "(b) In addition to any charges, fees or expenses charged by any bank or
     issuer in connection with the Letter of Credit Accommodations, Borrower and
     Guarantors  shall pay to Lender a letter of credit  fee at a rate  equal to
     one and one-half (11/2%) percent per annum on the daily outstanding balance
     of the Letter of Credit Accommodations (other than acceptances with respect
     to  letters  of  credit)  for the  immediately  preceding  month  (or  part
     thereof),  and an  acceptance  fee at a rate  equal to two and  one-quarter
     (21/4%) percent per annum on the daily outstanding balance of the Letter of
     Credit Accommodations  constituting  acceptances with respect to letters of
     credit,  payable in arrears as of the first day of each  succeeding  month,

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<PAGE>

     except  that  Borrower  shall pay to Lender  such  letter of credit fee, at
     Lender's  option,  without  notice,  at a rate equal to three and three and
     one-half  (31/2%) percent per annum on such daily  outstanding  balance and
     such acceptance fee, at Lender's option, without notice, at a rate equal to
     four and one-quarter  (41/4%)  percent per annum on such daily  outstanding
     balance  for:  the  period  from  and  after  the  date of  termination  or
     non-renewal  hereof until Lender has received full and final payment of all
     Obligations  (notwithstanding entry of a judgment against Borrower) and the
     period from and after the date of the occurrence of an Event of Default for
     so long as such Event of Default is  continuing  as  determined  by Lender.
     Such letter of credit fee and  acceptance  fee shall be  calculated  on the
     basis of a three  hundred  sixty (360) day year and actual days elapsed and
     the obligation of Borrower and Guarantors to pay such fee shall survive the
     termination or non-renewal of this Agreement."

1.   Servicing Fee.  Effective as of March 1, 2000,  Section 3.3 of the Loan
Agreement is hereby deleted in its entirety and replaced with the following:
2.
               "3.3  Servicing  Fee.  Borrower  shall pay to Lender  quarterly a
          servicing  fee in an amount equal to $12,500 for each quarter (or part
          thereof) ending March 31, June 30, September 30 and December 31, while
          this  Agreement is in effect and for so long  thereafter as any of the
          Obligations  are  outstanding,  which fee shall be payable on March 1,
          2000 for that part of the quarter ending March 31, 2000 and thereafter
          in advance on the first day of each quarter thereafter,  commencing on
          April 1, 2000."

1.   Unused  Line  Fee.  Effective  as of March 1, 2000, Section 3.4 of the Loan
Agreement is hereby amended by deleting the figure  "$45,000,000"  and replacing
it with the figure: "$35,000,000".
2.
3.   Term
4.
(a)  Section  12.1(a) of  the  Loan  Agreement is hereby amended by deleting the
first sentence of that Section and replacing it with the following:
(b)
               "(a) This  Agreement  and the other  Financing  Agreements  shall
          become effective as of the date set forth on the first page hereof and
          shall continue in full force and effect for a term ending on March 31,
          2003 (the "Renewal Date"),  and from year to year  thereafter,  unless
          sooner terminated pursuant to the terms hereof; provided, that, Lender
          may,  at its  option,  extend the  Renewal  Date to March 31,  2004 by
          giving Borrower written notice at least sixty (60) days prior to March
          31, 2003."

(a)   Section  12.1(c) of the Loan  Agreement  is  hereby  amended by adding new
clauses (iii) and (iv) as follows:

(b)
             "Amount                           Period

    (iii)    one half of one (1/2%) percent    From February __, 2000 to and
             of the Maximum Credit             including March 31, 2001

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<PAGE>

    (iv)     one quarter of one (1/4%)         From April 1, 2001 through and
             percent of the Maximum Credit     including March 31, 2002"

1.   Representations,  Warranties  and  Covenants. In addition to the continuing
representations,  warranties  and  covenants  heretofore  or  hereafter  made by
Borrower or Guarantors  to Lender  pursuant to the other  Financing  Agreements,
Borrower and  Guarantors  hereby  represent,  warrant and  covenant  with and to
Lender  as  follows  (which   representations,   warranties  and  covenants  are
continuing  and shall  survive the  execution  and delivery  hereof and shall be
incorporated into and made a part of the Financing Agreements):
2.
(a)  This Amendment has been duly authorized, executed and delivered by Borrower
and  Guarantors,  and the agreements and  obligations of Borrower and Guarantors
contained herein constitute legal, valid and binding obligations of Borrower and
Guarantors  enforceable against Borrower and Guarantors in accordance with their
respective terms.
(b)
(i)   Neither  the   execution  and   delivery  of   this   Amendment,  nor  the
modifications to the Financing  Agreements  contemplated by this Amendment shall
violate any applicable law or regulation, or any order or decree of any court or
any governmental  instrumentality  in any respect or does or shall conflict with
or result in the breach of, or  constitute a default in any respect  under,  any
indenture,  or  any  material  mortgage,  deed  of  trust,  security  agreement,
agreement or instrument to which  Borrower or any Guarantor is a party or may be
bound, or violate any provision of the  organizational  documents of Borrower or
Guarantors.
(ii)
(c)    All  of  the  representations  and  warranties  set  forth  in  the  Loan
Agreement as amended hereby,  and the other Financing  Agreements,  are true and
correct in all material respects,  except to the extent any such  representation
or warranty is made as of a specified date, in which case such representation or
warranty shall have been true and correct as of such date.
(d)
(e)    No Event of  Default exists on  the date of this Amendment  (after giving
effect to the amendments to the Loan Agreement provided in this Amendment).
(f)
3.    Conditions Precedent. The effectiveness of the amendments set forth herein
shall be subject to the receipt by Lender of each of the following,  in form and
substance  satisfactory  to Lender:

(a)   an  original  of  this Amendment, duly authorized,  executed and delivered
by Borrower and Guarantors;
(b)
(c)   after giving  effect  to  the amendments to the Loan Agreement provided in
this  Amendment,  no Event of Default shall exist or have occurred and no event,
act or  condition  shall have  occurred or exist which with notice or passage of
time or both would constitute an Event of Default.
(d)
4.    Effect  of  this Amendment.  Except for the specific  amendment  expressly
set forth herein, no other changes or modifications to the Financing Agreements,
and no waivers of any  provisions  thereof are  intended or implied,  and in all
other  respects  the  Financing  Agreements  are hereby  specifically  ratified,
restated  and  confirmed  by all parties  hereto as of the date  hereof.  To the
extent of conflict  between the terms of this Amendment and the other  Financing

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<PAGE>

Agreements,  the terms of this Amendment  shall control.  The Loan Agreement and
this Amendment shall be read and construed as one agreement.
5.
6.    Governing  Law.  The  rights  and  obligations  hereunder  of each  of the
parties hereto shall be governed by and interpreted and determined in accordance
with the  internal  laws of the  State of New York  (without  giving  effect  to
principles of conflicts of laws).
7.
8.    Binding  Effect.  This  Amendment  shall  be binding upon and inure to the
benefit  of each of the  parties  hereto  and their  respective  successors  and
assigns.
9.
10.
11.
12.
13.
14.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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<PAGE>

1.     Counterparts.   This   Amendment  may  be  executed  in   any  number  of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment, it shall not be necessary
to produce or account for more than one  counterpart  thereof  signed by each of
the parties hereto.
2.
3.     Please  sign in the space provided below and return a counterpart of this
Amendment,  whereupon  this  Amendment,  as so agreed to and accepted by Lender,
shall become a binding agreement among Borrower, Guarantors and Lender.
4.
5.                                             Very truly yours,
6.
7.                                             J.B. POINDEXTER & CO., INC.
8.
9.                                             By:________________________
10.
11.                                            Title:_____________________
12.
13.      AGREED AND ACCEPTED:
14.
15.      CONGRESS FINANCIAL CORPORATION
16.
17.      By:
18.
19.      Title:
20.
21.      ACKNOWLEDGED AND
22.      CONSENTED TO:
23.
24.      EFP CORPORATION
25.
26.      By:
27.
28.      Title:
29.
30.
31.      LOWY GROUP, INC.
32.
33.      By:
34.
35.      Title:
36.
37.
38.

                       [SIGNATURES CONTINUE ON NEXT PAGE]

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<PAGE>

                    [SIGNATURES CONTINUED FROM PREVIOUS PAGE]

MAGNETIC INSTRUMENTS CORP.

By:

Title:

MORGAN TRAILER MFG. CO.

By:

Title:

TRUCK ACCESSORIES GROUP, INC.

By:

Title:

RAIDER INDUSTRIES INC.

By:

Title:AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT

                           J.B. POINDEXTER & CO., INC.
                              1100 Louisiana Street
                                   Suite 5400
                              Houston, Texas 77002

                                                        As of March 8, 2000

Congress Financial Corporation
1133 Avenue of the Americas
New York, New York 10036

Ladies and Gentlemen:

     Congress  Financial  Corporation  ("Lender"),  J.B.  Poindexter & Co., Inc.
("Borrower"),  EFP Corporation  ("EFP"),  Lowy Group,  Inc.  ("Lowy"),  Magnetic
Instruments Corp. ("MIC"), Morgan Trailer Mfg. Co. ("Morgan"), Truck Accessories
Group, Inc. ("TAG"),  and Raider  Industries Inc.  ("Raider";  and together with
EFP,  Lowy,  MIC,  Morgan  and  TAG,  each  individually,   a  "Guarantor"  and,
collectively,  "Guarantors") have entered into certain financing arrangements as
set forth in the Loan and Security Agreement,  dated as of June 28, 1996, by and
among Lender, Borrower and Guarantors, as amended by Amendment No. 1 to Loan and
Security  Agreement,  dated May 13, 1998,  Amendment  No. 2 to Loan and Security
Agreement,  dated  as of June 30,  1998,  Amendment  No. 3 to Loan and  Security
Agreement,  dated as of June 24, 1999 and  Amendment  No. 4 to Loan and Security
Agreement,  dated  as of  February  25,  2000  (and  as  amended  hereby  and as
heretofore  amended  or  may  hereafter  be  amended,  modified,   supplemented,
extended,  renewed,  restated or replaced, the "Loan Agreement"),  together with
all other agreements,  documents, supplements and instruments now or at any time
hereafter executed and/or delivered by Borrower, Guarantors or any other person,
with, to or in favor of Lender in connection  therewith  (all of the  foregoing,
together with this Amendment and the other agreements and instruments  delivered
hereunder,  as the  same  now  exist  or may  hereafter  be  amended,  modified,
supplemented,   extended,  renewed,  restated  or  replaced,  collectively,  the
"Financing  Agreements").  For  purposes  of this  Amendment,  unless  otherwise
defined  herein,  all capitalized  terms used herein,  shall have the respective
meanings ascribed to them in the Loan Agreement.

         Borrower has formed, solely for the purpose of purchasing the assets or
Capital  Stock of another  Person,  an  indirect  wholly-owned  subsidiary,  KWS
Acquisition Corp., a Texas corporation (the "Acquisition"), which is one hundred
(100%)  percent  owned by MIC.  Acquisition  desires  to merge with and into KWS
Manufacturing  Company,  Inc., formerly known as KWS Holding Company,  Inc. (the
surviving corporation of a merger by and between KWS Manufacturing Company, Inc.
and KWS Holding Company,  Inc.), so that KWS Manufacturing Company, Inc. will be
the  surviving  corporation.  Upon  the  effectiveness  of the KWS  Merger,  KWS
Manufacturing  Company, Inc., a Texas corporation ("KWS") will be a wholly-owned

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<PAGE>

indirect  subsidiary  of  Borrower.  As part of the KWS  Merger (as such term is
defined  below),  Floyd W.  Watkins,  holder of all the issued  and  outstanding
shares of Capital Stock of KWS Manufacturing Company, Inc. (immediately prior to
the  effective  time of the KWS  Merger)  shall  receive  as  consideration  for
surrendering  his shares,  consideration  in a maximum  principal  amount not to
exceed $7,812,591 in accordance with the terms of the KWS Merger Agreements.

(a) Borrower and Guarantors  have requested that Lender consent to the formation
of and MIC's investment in Acquisition,  a new directly wholly-owned  subsidiary
of MIC and an indirectly wholly-owned subsidiary of Borrower, add Acquisition as
a Guarantor party to the Loan Agreement, consent to the KWS Merger, and upon the
effectiveness of the KWS Merger,  make certain  supplemental  loans to Borrower.
Lender is willing to make such loans and agree to such  amendments to the extent
set  forth  herein.
(b)
(c) In consideration  of  the  foregoing,  the  mutual  agreements and covenants
contained  in  this  Amendment  No.  5 to  Loan  and  Security  Agreement  (this
"Amendment"),  and other  good and  valuable  consideration,  the  adequacy  and
sufficiency of which are hereby  acknowledged,  Borrower,  Guarantors and Lender
agree as follows:
(d)
2.  Definitions.
3.
(a) Additional  Definitions.  As used herein, the following terms shall have the
respective  meanings given to them below and the Loan Agreement  shall be deemed
and is hereby amended to include,  in addition and not in limitation of, each of
the following definitions:
(b)
(i) "Acquisition" shall mean KWS Acquisition Corp., a Texas corporation, and its
successors  and assigns.
(ii)
(iii)"Capital  Expenditures"  shall  mean,  with  respect  to  any  Person,  all
expenditures  made and liabilities  incurred for the acquisition of assets which
are not, in  accordance  with GAAP,  treated as expense items for such Person in
the year made or incurred or as a prepaid expense applicable to a future year or
years.
(iv)
(v) "EBITDA" shall  mean, as  to  any  Person,  with  respect  to any period, an
amount equal to: (A) the Net Income of such Person and its Subsidiaries for such
period,  on a consolidated  basis,  determined in accordance with GAAP, plus (B)
depreciation,  amortization  and  other  non-cash  charges  (including,  but not
limited to, imputed interest and deferred  compensation) for such period (to the
extent deducted in the computation of Net Income),  all in accordance with GAAP,
plus (C)  Interest  Expense  for such  period  (to the  extent  deducted  in the
computation  of Net  Income),  plus (D) charges for  Federal,  State,  local and
foreign income taxes for such period (to the extent  deducted in the computation
of Net Income),  minus (E) all income (and plus all charges, up to the amount of
such income) attributable to any Subsidiary of such Person, if and to the extent
such income was not distributed to such Person in cash.
(vi)

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<PAGE>

(vii) "Fixed Charge Coverage Ratio" shall mean, for any period of determination,
the ratio of (A)  EBITDA of such  Person and its  Subsidiaries  to (B) the Fixed
Charges of such Person and its Subsidiaries for such period.
(viii)
(ix)  "Fixed  Charges"  shall  mean for any Person  and its  Subsidiaries,  on a
consolidated  basis, for any period,  the sum of, without  duplication,  (A) all
Interest Expense, (B) all Capital Expenditures (exclusive of purchases of assets
secured by purchase money security  interests),  and (C) all regularly scheduled
(as determined at the beginning of the respective  period) principal payments of
Indebtedness for borrowed money, Indebtedness secured by purchase money security
interests in real or personal property, and Indebtedness with respect to Capital
Leases (and without  duplicating  in items (A) and (C) of this  definition,  the
interest component with respect to Indebtedness under Capital Leases).
(x)
(xi) "Interest Expense" shall mean, for any period, as to any Person, all of the
following as determined in accordance with GAAP: total interest expense, whether
paid or accrued during such period (including the interest  component of Capital
Leases  for  such  period),  including,   without  limitation,  all  bank  fees,
commissions,  discounts  and other fees and charges owed with respect to letters
of credit (but excluding  amortization of discount and  amortization of deferred
financing  fees paid in cash in connection  with the  transactions  contemplated
hereby, interest paid in property other than cash and any other interest expense
not payable in cash).
(xii)
(xiii) "KWS"  shall  mean  KWS   Manufacturing   Company,  Inc.,  the   survivor
corporation of the merger between KWS Acquisition Corp., wholly-owned subsidiary
of MIC and KWS Manufacturing Company, Inc., and its successors and assigns.
(xiv)
(A) "KWS Amendment Agreements" shall mean,  individually and collectively,  this
Amendment No. 5 to Loan and Security Agreement by and among Lender, Borrower and
Guarantors,  the Guarantee by  Acquisition in favor of Lender,  the  Information
Certificate  of  Acquisition,  the Patent  Collateral  Assignment  and  Security
Agreement, between Acquisition and Lender, the Collateral Assignment of Notes by
Borrower in favor of Lender,  the  Acknowledgment  of  Assignment  and Waiver of
Defense  by  Acquisition  in favor  of  Lender,  the  Collateral  Assignment  of
Acquisition  Agreements made by Acquisition in favor of Lender,  UCC-1 Financing
Statements  between  Acquisition,  as debtor and Lender,  as secured party,  the
Ratification  and  Assumption  Agreement  made by KWS in  favor of  Lender,  the
Information  Certificate  of KWS,  UCC-1  Financing  Statements  between KWS, as
debtor and Lender, as secured party,  each of the foregoing  agreements dated as
of the date hereof,  and all other  agreements,  documents  and  instruments  by
Borrower, Acquisition, KWS and such other Persons with, to or in favor of Lender
executed in connection  with any of the foregoing,  as the same now exist or may
hereafter be amended,  modified,  supplemented,  extended,  renewed, restated or
replaced.
(B)
(xv) "KWS  Existing  Lenders" shall  mean  the  existing  lenders  to KWS listed
on Schedule A annexed hereto and made a part hereof.
(xvi)

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<PAGE>

(xvii) "KWS Maximum  Supplemental  Revolving Loan Limit" shall mean, on the date
of the KWS Amendment Agreements,  the sum of $1,450,000, as reduced on the first
day of each calendar  month,  commencing,  April 1, 2000 to the amount set forth
next to such date below:
(xviii)
              Reduction Date            KWS Maximum Supplemental Revolving Limit

(A)           April 1, 2000                    $1,389,583.00
(B)           May 1, 2000                      $1,329,166.00
(C)           June 1, 2000                     $1,269,349.00
(D)           July 1, 2000                     $1,208,332.00
(E)           August 1, 2000                   $1,147,915.00
(F)           September 1, 2000                $1,087,498.00
(G)           October 1, 2000                  $1,027,081.00
(H)           November 1, 2000                 $  966,664.00
(I)           December 1, 2000                 $  906,247.00
(J)           January 1, 2001                  $  845,830.00
(K)           February 1, 2001                 $  785,413.00
(L)           March 1, 2001                    $  724,996.00
(M)           April 1, 2001                    $  664,579.00
(N)           May 1, 2001                      $  604,162.00
(O)           June 1, 2001                     $  543,745.00
(P)           July 1, 2001                     $  483,328.00
(Q)           August 1, 2001                   $  422,911.00
(R)           September 1, 2001                $  362,494.00
(S)           October 1, 2001                  $  302,077.00
(T)           November 1, 2001                 $  241,660.00
(U)           December 1, 2001                 $  181,243.00
(V)           January 1, 2002                  $  120,826.00
(W)           February 1, 2002                 $   60,417.00
(X)           March 1, 2002                    $     - 0-
(Y)           and at all times thereafter

(i) "KWS  Merger" shall  mean  the  merger  of KWS  Acquisition  Corp.,  a Texas
corporation,   with  and  into  KWS  Manufacturing   Company,   Inc.,  with  KWS
Manufacturing  Company,  Inc. as the surviving corporation pursuant to the terms
of the KWS Merger Agreements.
(ii)
(iii) "KWS   Merger  Agreements"  shall  mean,  individually  and  collectively,
the  Agreement  and Plan of  Merger  by and among  KWS  Acquisition  Corp.,  KWS
Manufacturing  Company,  Inc. and Floyd W.  Watkins and all related  agreements,
documents  and  instruments,  as the same now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
(iv)

                                       4
<PAGE>

(v) "KWS Supplemental  Revolving Loan Limit" shall mean, at any time, the lesser
of (A) the  amount  equal to (1) one  hundred  (100%)  percent of the sum of the
value of the Net Amount of Eligible  Accounts of Borrower and Guarantors and the
value of Eligible  Inventory of Borrower and  Guarantors  (for  purposes of this
Section the term "value" means:  with respect to Eligible  Accounts,  their book
value and with respect to Eligible Inventory, the lower of its cost and its book
value (on a first-in-first  out basis),  in each case,  determined in accordance
with GAAP)  minus (2) the amount of Loans  outstanding  as of such time based on
the applicable lending formula set forth in Section 2.1(a) hereof or (B) the KWS
Maximum Supplemental Revolving Loan Limit then in effect.
(vi)
(vii) "KWS Term Loan" shall mean the term loan made by Lender to Acquisition, on
the date hereof, in the original principal amount not to exceed  $2,140,000,  on
the terms and conditions set forth in the KWS Term Loan Documents.
(viii)
(A) "KWS  Term  Loan  Documents"  shall  mean the  Term  Promissory  Note in the
principal  amount of $2,140,000,  dated the date hereof,  made by Acquisition in
favor of Lender,  the Term Loan and Security Agreement dated the date hereof, by
and between Lender and  Acquisition,  the Deed of Trust and Security  Agreement,
dated the date  hereof,  made by KWS in favor of Lender with respect to the real
property  and  related  assets of KWS  located in Joshua,  Texas,  and all other
agreements,  documents and instruments by KWS and other Persons,  with, to or in
favor of Lender  executed in connection  with any of the foregoing,  as the same
now  exist  or may  hereafter  be  amended,  modified,  supplemented,  extended,
renewed,  restated or replaced.
(B)
(ix) "KWS  Term  Loan  Collateral"  shall  mean  "Collateral"  as  such  term is
defined in the KWS Term Loan Documents.
(x)
(xi) "Net Income" shall mean,  with respect to any Person,  for any period,  the
aggregate  of the net income  (loss) of such Person and its  Subsidiaries,  on a
consolidated  basis,  for such period  (excluding to the extent included therein
any extraordinary,  one-time or non-recurring gains) after deducting all charges
which  should be  deducted  before  arriving  at the net income  (loss) for such
period and after  deducting  the  Provision  for Taxes for such  period,  all as
determined in accordance  with GAAP;  provided,  that, (a) the net income of any
Person that is not a  wholly-owned  Subsidiary  or that is accounted  for by the
equity method of  accounting  shall be included only to the extent of the amount
of dividends or  distributions  paid or payable to such Person or a wholly-owned
Subsidiary of such Person; (b) the effect of any change in accounting principles
adopted  by such  Person  or its  Subsidiaries  after the date  hereof  shall be
excluded; and (c) the net income (if positive) of any wholly-owned Subsidiary to
the extent that the declaration or payment of dividends or similar distributions
by such  wholly-owned  Subsidiary  to such  Person or to any other  wholly-owned
subsidiary of such Person is not at the time permitted by operation of the terms
of its charter or any agreement,  instrument,  judgment, decree, order, statute,
rule or governmental regulation applicable to such wholly-owned Subsidiary shall
be excluded.  For the purpose of this  definition,  net income excludes any gain
(but not loss) together with any related  Provision for Taxes for such gain (but
not loss) realized upon the sale or other disposition of any assets that are not
sold  in  the  ordinary  course  of  business  (including,  without  limitation,

                                       5
<PAGE>

dispositions  pursuant  to sale and  leaseback  transactions)  or of any Capital
Stock of such Person or a Subsidiary of such Person and any net income  realized
as a result of changes in accounting  principles or the  application  thereof to
such Person.
(xii)
(xiii) "KWS  Supplemental  Revolving  Loans"  shall  mean  the  loans  hereafter
made by Lender to or for the benefit of Borrower on a revolving basis (involving
advances, repayments and readvances) as set forth in Section 5 hereof.
(xiv)
(xv) "KWS  Supplemental  Revolving Loan Termination Date" shall mean the earlier
to occur of (A) Lender's determination that, as of the end of any fiscal quarter
of KWS, the Fixed Charge  Coverage  Ratio of KWS for such fiscal quarter is less
than 1.0 to 1.00 or (B) March 1, 2002.
(xvi)
(xvii) "Revolving Loan Limit" shall mean $55,000,000.
(xviii)
2.     Amendments to Definitions.
3.
(a)  All  references  to the  term  "Guarantor"  and  "Guarantors"  in the  Loan
Agreement  and the other  Financing  Agreements  shall be  deemed  and each such
reference  is hereby  amended to  include,  in addition  and not in  limitation,
Acquisition, and upon the effectiveness of the KWS Merger, all references in the
Loan Agreement (i) to the term "Guarantor" and "Guarantors"  shall be deemed and
each such  reference  is hereby  amended  to  include,  in  addition  and not in
limitation, KWS, as the surviving corporation of the KWS Merger, and (ii) to the
term  "Acquisition"  shall  be  deemed  references  to  KWS,  as  the  surviving
corporation  of the KWS Merger.
(b)
(c) All  references  to  the  term  "Financing Agreements" in the Loan Agreement
shall be deemed  and each  such  reference  is hereby  amended  to  include,  in
addition and not in limitation,  this Amendment No. 5, and all other agreements,
documents and instruments at any time executed  and/or  delivered by Borrower or
any other person in connection with any of the foregoing,  as the same now exist
or  may  hereafter  be  amended,  modified,  supplemented,   extended,  renewed,
restated, or replaced.
(d)
(e) All references to the term "Loans" in any of the Financing  Agreements shall
be deemed and each such reference is hereby amended to include,  in addition and
not in limitation,  the KWS Supplemental Revolving Loans, except, that, the term
"Loans" as used in Sections 1.4, 1.31, 1.50, 1.69,  2.1(a),(c) and (e), 2.2 (a),
(c) and (e) and 3.1(a) and 3.4 shall only mean those the loans now or  hereafter
made by Lender to or for the benefit of Borrower on a revolving basis (involving
advances, repayments and readvances) as set forth in Section 2.1 hereof.
(f)
(g) All references to the term "Obligations" in any of the Financing  Agreements
shall be deemed  and each  such  reference  is hereby  amended  to  include,  in
addition and not in  limitation,  the  obligations of Borrower to Lender arising
pursuant  to or  in  connection  with  the  KWS  Supplemental  Revolving  Loans,

                                       6
<PAGE>

including  principal,  interest,  fees,  costs,  expenses  and other  charges in
respect  thereof.
(h)
(i) The  references in Sections  1.33(a)(ii)  and Section
2.2(c) to the  "Maximum  Credit" is hereby  deleted in its entirety and the term
"Revolving Loan Limit"  substituted  therefor.
(j)
(k) Section  1.41  of  the  Loan  Agreement  is  hereby  deleted in its entirety
and the following substituted therefor:
(l)
                  "  1.41  "Guarantor   Availability"  shall  mean,  as  to  any
                  Guarantor,   at  any  time,  the  amount  equal  to:  (a)  the
                  applicable  percentage for such Guarantor set forth in Section
                  2.1(a)  multiplied  by the Net Amount of Eligible  Accounts of
                  such  Guarantor,  plus (b) the applicable  percentage for such
                  Guarantor set forth in Section 2.1(a)  multiplied by the Value
                  of the  Eligible  Inventory of such  Guarantor,  minus (c) the
                  Availability  Reserves  allocated by Lender to such Guarantor,
                  except,   that,  in  the  case  of   Acquisition,   "Guarantor
                  Availability"  shall  include,  in  addition  to  and  not  in
                  limitation of clauses (a) through (c) above, the amount of the
                  KWS Supplemental Revolving Loan Limit then in effect."

(a) Section  1.47  of  the  Loan  Agreement  is  hereby  amended  to include the
following additional clause (g) thereto:
(b)
                  "and (g) the  promissory  note dated  March __, 2000 issued by
                  Acquisition and payable to Borrower."

1. Consent to KWS Merger.  Subject to the terms and conditions contained herein,
Lender hereby confirms and agrees that it consents to the KWS Merger pursuant to
the terms of the KWS Merger Agreements (as in effect on the date hereof).
2.
(a) Loans.  Sections  2.1(a)(viii) and (ix) of  the  Loan  Agreement  are hereby
deleted and replaced in their entirety as follows:
(b)
                    "(viii)  forty  (40%)  percent of the Value of the  Eligible
                    Inventory  of the Leer  Retail  Division  of TAG,  provided,
                    that,  Lender  may at any time  after the date  hereof  upon
                    written notice to Borrower increase such percentage to sixty
                    (60%) percent of the Value of such Eligible Inventory, plus

                    (ix) eighty-five (85%) percent of the Net Amount of Eligible
                    Accounts of Acquisition, plus"

(a) Section  2.1 (a) of  the  Loan  Agreement  is  hereby amended to include the
following additional sections (x) and (xi) as follows:

                                       7
<PAGE>
(b)
                    "(x)  sixty  (60%)  percent  of the  Value  of the  Eligible
                    Inventory of Acquisition, minus

                    (xi) any Availability Reserves."

(a) Section  2.1 (c)  is  hereby  amended  by  adding the following  sentence at
the end of the Section:
(b)
                    "  Notwithstanding  anything  to the  contrary  herein,  the
                    aggregate amount of the Loans based on Eligible Inventory of
                    Acquisition   outstanding  at  any  time  shall  not  exceed
                    $1,000,000."

(a) Section  2.1(d)  of  the  Loan  Agreement  is hereby deleted in its entirety
and replaced as follows:
(b)
                    "(d) Except in Lender's discretion, (i) the aggregate amount
                    of the Loans made pursuant to Section  2.1(a) hereof and the
                    Letter  of  Credit  Accommodations  outstanding  at any time
                    shall not  exceed the  Revolving  Loan  Limit,  and (ii) the
                    aggregate   amount   of   Loans   and   Letter   of   Credit
                    Accommodations  outstanding at any time shall not exceed the
                    Maximum Credit. In the event that the outstanding  amount of
                    any component of the Loans,  or the aggregate  amount of the
                    outstanding  Loans  and  Letter  of  Credit  Accommodations,
                    exceed the amounts available under the lending formulas, the
                    sublimits for Letter of Credit  Accommodations  set forth in
                    Section 2.2(d) or the Maximum  Credit,  as applicable,  such
                    event shall not limit,  waive or otherwise affect any rights
                    of Lender in that  circumstance or on any future  occasions.
                    Borrower shall, upon demand by Lender,  which may be made at
                    any time or from time to time,  immediately  repay to Lender
                    the entire amount of any such  excess(es)  for which payment
                    is demanded."

(a) The phrase "in each case pursuant to and in accordance with the Intercompany
Loan  Documents  as in effect on the date  hereof"  set forth in Section 2.4 and
elsewhere in the Loan Agreement and the other  Financing  Agreements of the Loan
Agreement is hereby  deemed to include the  Intercompany  Loan  Documents by and
between Borrower,  as lender and Acquisition,  as borrower,  each dated March 8,
2000.
(b)

                                       8
<PAGE>

2. KWS Supplemental Revolving Loans.
3.
(a) In addition to the loans, advances and Letter of Credit Accommodations which
may be made by Lender to Borrower  pursuant to the Loan  Agreement and the other
Financing  Agreements,  subject to and upon the terms and  conditions  contained
herein,  and in the other  Financing  Agreements,  Lender agrees to make the KWS
Supplemental  Revolving Loans to Borrower from time to time in amounts requested
by  Borrower,  up to the  amount  at  any  time  outstanding  equal  to the  KWS
Supplemental Revolving Loan Limit as then in effect.

(a) Except in Lender's discretion, Borrower shall not have any right to request,
and Lender shall not make, any KWS Supplemental Revolving Loans in excess of the
KWS Supplemental  Revolving Loan Limit or after the KWS  Supplemental  Revolving
Loan Termination  Date and the amount of outstanding KWS Supplemental  Revolving
Loans shall not, at any time, exceed the KWS Supplemental  Revolving Loan Limit.
The KWS Supplemental Revolving Loans shall be secured by all the Collateral.
(b)
(c)  Notwithstanding  anything to the contrary  contained herein or in the other
Financing  Agreements,   (i)  on  each  date  when  any  reduction  to  the  KWS
Supplemental Revolving Loan Limit becomes effective,  Borrower agrees absolutely
and unconditionally to automatically and without notice or demand make a payment
in respect of the KWS  Supplemental  Revolving  Loans in an amount  equal to the
excess, if any, of the aggregate unpaid principal amount of the KWS Supplemental
Revolving Loans over the KWS Supplemental  Revolving Loan Limit as so reduced in
immediately  available  funds  and (ii)  unless  sooner  demanded  by  Lender in
accordance with terms of the Financing Agreements,  Borrower further agrees that
all outstanding and unpaid Obligations  arising pursuant to the KWS Supplemental
Revolving  Loans  (including,  but not limited to,  principal,  interest,  fees,
costs,  expenses  and other  charges in respect  thereof  payable by Borrower to
Lender)  shall  automatically,  without  notice or  demand,  be  absolutely  and
unconditionally  due and payable,  and  Borrower  shall pay to Lender in cash or
other immediately available funds all such Obligations,  on the KWS Supplemental
Revolving Loan Termination Date.  Interest shall accrue at the Interest Rate set
forth in Section 5(d) below and be due,  until and  including  the next Business
Day, if the amount so paid by Borrower to the bank account  designated by Lender
for such purpose is received in such bank account after 12:00 p.m. New York City
time.
(d)
(i) The term  "Interest  Rate"  shall  mean  with  respect  to KWS  Supplemental
Revolving  Loans,  a rate of one (1%)  percent  per annum in excess of the Prime
Rate.  Notwithstanding the foregoing,  "Interest Rate" shall mean the rate equal
to two (2%)  percent per annum in excess of the  interest  rate  otherwise  then
payable by Borrower on KWS  Supplemental  Revolving  Loans, at Lender's  option,
without  notice,  for  the  period  on and  after  the  date of  termination  or
non-renewal of the Loan Agreement, or the date of the occurrence of any Event of
Default and for so long as such Event of Default is  continuing as determined by
Lender and at any time and to the extent the outstanding principal amount of the
KWS  Supplemental  Revolving Loans in excess of the KWS  Supplemental  Revolving
Loan Limit then in effect.
(ii)

                                       9
<PAGE>

(iii)  Acknowledgment.  Acquisition  hereby expressly agrees to perform,  comply
with and be bound by all terms,  conditions  and covenants of the Loan Agreement
and the other Financing  Agreements  applicable to all Guarantors and as applied
to Acquisition, as a Guarantor, with the same force and effect as if Acquisition
had  originally  executed and been an original  Guarantor  signatory to the Loan
Agreement and the other Financing Agreements,  and agrees that Lender shall have
all rights,  remedies and interests,  including,  without  limitation,  security
interests in and to the Collateral granted pursuant to Section 7 below, the Loan
Agreement and the other  Financing  Agreements,  with respect to Acquisition and
its  properties  and  assets  with the same  force and effect as Lender has with
respect  to  the  other  Guarantors  and  their  assets  and  properties  as  if
Acquisition had originally executed and had been an original Guarantor signatory
to the Loan Agreement and the other Financing Agreements.
(iv)
2.  Collateral.
3.
(a) Without  limiting the provisions of Section 6 hereof,  Section 5 of the Loan
Agreement and the other  Financing  Agreements,  as collateral  security for the
payment and performance of all Obligations,  Acquisition hereby grants to Lender
a continuing  security  interest and lien upon, and a right of set-off  against,
and hereby  assigns to Lender,  as security,  all of the following  property and
interests in property, whether now owned or hereafter acquired:

(i) Receivables;
(ii)
(iii) all  present and future  contract  rights and other  general  intangibles,
including, but not limited to, tax and duty refunds, registered and unregistered
patents,  trademarks,  service marks, copyrights,  trade names, applications for
the  foregoing,  trade  secrets,  goodwill,  processes,   drawings,  blueprints,
customer lists,  licenses,  whether as licensor or licensee, and also including,
but not  limited to,  choses in action and other  claims in  connection  with or
related to the Receivables or any of the other Collateral;
(iv)
(1) all  present  and  future  chattel  paper,  documents and instruments  which
evidence or relate to  Receivables  or Inventory  and including all documents of
title  or  which  evidence  or  relate  to  indebtedness   arising  pursuant  to
Receivables or any of the other Collateral (including,  without limitation,  the
Intercompany  Notes or any  promissory  notes or  instruments  which at any time
evidence  indebtedness  of any  Affiliate  of  Acquisition  arising  from loans,
advances or other financial accommodations made or provided by Acquisition to or
for the benefit of such  Affiliate  with  proceeds of the Loans or in connection
with  the  Letter  of  Credit  Accommodations  and  promissory  notes  or  other
instruments  which evidence  indebtedness of any account debtor or other obligor
in respect of any Receivables);
(2)
(B) all  present  and  future  monies,  securities,  credit  balances, deposits,
deposit accounts,  documents,  instruments and other property of Acquisition now
or  hereafter  held or  received  by or in transit to Lender or its  affiliates,
whether for safekeeping, pledge, custody, transmission, collection or otherwise,
all present and future monies,  securities,  credit balances and deposits at any
bank or other financial institution  constituting proceeds of Receivables or any

                                       10
<PAGE>

of the other  Collateral or  constituting  proceeds of loans,  advances or other
financial  accommodations made or provided by Lender or its Affiliates to or for
the benefit of Acquisition or its Affiliates or constituting  proceeds of loans,
advances or other financial accommodations made or provided by Acquisition to or
for the benefit of any  Affiliate  with  proceeds of the Loans or in  connection
with the Letter of Credit Accommodations or held or deposited in or delivered to
any deposit  account or other account used in connection  with the collection of
Receivables  or any of the  other  Collateral,  or  containing  proceeds  of the
Receivables or any of the other Collateral,  or containing  proceeds of Loans or
Letter of Credit  Accommodations made or provided by Lender or its Affiliates to
or for the  benefit of  Acquisition  or its  Affiliates,  or  proceeds of loans,
advances or other financial accommodations made or provided by Acquisition to or
for the benefit of any  Affiliate  with  proceeds of the Loans or in  connection
with the Letter of Credit  Accommodations,  and all right, title and interest of
Acquisition in or to any deposit account or other account maintained at any bank
or other  financial  institution  used in connection  with the collection of the
Receivables  or any of the  other  Collateral,  or  containing  proceeds  of the
Receivables or any of the other Collateral,  or containing  proceeds of Loans or
Letter of Credit  Accommodations made or provided by Lender or its Affiliates to
or for the  benefit of  Acquisition  or its  Affiliates,  or  proceeds of loans,
advances or other financial accommodations made or provided by Acquisition to or
for the benefit of any  Affiliate  with  proceeds of the Loans or in  connection
with the Letter of Credit Accommodations;
(C)
(D) all  present  and  future  liens,  security   interests,  rights,  remedies,
title and  interest  in, to and in  respect of  Receivables  or any of the other
Collateral, including, without limitation, rights and remedies under or relating
to guaranties,  contracts of suretyship,  letters of credit and credit and other
insurance related to the Receivables or any of the other  Collateral,  rights of
stoppage in transit,  replevin,  repossession,  reclamation and other rights and
remedies  of an unpaid  vendor,  lienor or secured  party,  goods  described  in
invoices, documents, contracts or instruments,  credit card sales drafts, credit
card sales  slips or charge  slips or  receipts  and other  forms of daily store
receipts with respect to, or otherwise representing or evidencing Receivables or
other  Collateral,  including,  without  limitation,  returned,  repossessed and
reclaimed  goods,  deposits by and property of account  debtors or other persons
securing the obligations of account debtors,  and security  interests granted by
Affiliates of Acquisition to  Acquisition  to secure  Indebtedness  arising from
loans,   advances  or  other  financial   accommodations  made  or  provided  by
Acquisition to or for the benefit of such Affiliate or otherwise;
(E)
(v)  Inventory;
(vi)
(vii)  all  leases  and  rental  agreements   for   personal   property  between
Acquisition,  as lessor  (whether by origination or derivation)  and any and all
persons or parties as lessee(s),  and all rentals,  purchase option amounts, and
other sums due thereunder; and all inventory, goods and property subject to such
leases  and  rental  agreements  and all  accessions,  parts and tools  attached
thereto or used  therewith  and all of the  residual or  reversionary  rights of
Acquisition therein;
(viii)
(ix) Records;  and

                                       11
<PAGE>

(x)
(xi) all products and proceeds of the foregoing, in any form, including, without
limitation,  insurance proceeds and all claims against third parties for loss or
damage  to  or  destruction   of  any  or  all  of  the  foregoing.
(xii)
(b) Notwithstanding anything to the contrary contained in Section 7(a)above, the
types or items of  Collateral  shall not include any rights or  interests in any
contract, lease, permit, license, charter or license agreement covering personal
property, as such, if under the terms of such contract,  lease, permit, license,
charter or license agreement,  or applicable law with respect thereto, the valid
grant of a security  interest or lien therein to Lender is  prohibited  and such
prohibition  has not been or is not waived or the  consent of the other party to
such contract, lease, permit, license, charter or license agreement has not been
or is not otherwise  obtained or under applicable law such prohibition cannot be
waived; provided, that, the foregoing exclusion shall in no way be construed (i)
to apply if such prohibition is unenforceable  under Section 9-318 of the UCC or
other applicable law or (ii) so as to limit, impair or otherwise affect Lender's
unconditional  continuing  security  interests  in and liens  upon any rights or
interests  of  Acquisition  in or to monies  due or to become due under any such
contract,  lease,  permit,  license,  charter or license  agreement  (including,
without limitation, any Accounts or other Receivables).
(c)
(d) Without  limiting  the  foregoing, or  the  other Collateral pursuant to the
Loan  Agreement  or any of the other  Financing  Agreements,  in order to induce
Lender to make loans and advances and provide other financial  accommodations to
Borrower under the Loan Agreement,  and as additional collateral for the payment
and performance when due of all Obligations of Borrower and Acquisition,  as the
case may be,  Acquisition  hereby  pledges  and  assigns to Lender and grants to
Lender a security interest in, all of its now existing and hereafter arising (i)
rights,  remedies,  claims  for  monies,  indemnification  claims and claims for
damages or other relief pursuant to or in respect of the KWS Merger  Agreements,
(ii) rights, remedies, claims for monies,  indemnification claims and claims for
damages or other relief  under or in respect of the  documents  and  instruments
referred to in the KWS Merger Agreements,  and (iii) all proceeds,  collections,
recoveries and rights with respect to the  foregoing.  Nothing set forth herein,
and no act taken by Lender  pursuant to the pledges,  assignments  and grants of
security  interests set forth herein shall constitute an assumption by Lender of
any obligation or liability of Acquisition pursuant to or in connection with the
KWS Merger Agreements or otherwise.
(e)
2. Payments. Notwithstanding anything to the contrary  set forth in Section  6.4
of the Loan  Agreement,  Lender shall apply payments  received or collected from
Borrower or Guarantors or for the account of Borrower or Guarantors  (including,
without limitation,  the monetary proceeds of collections or of realization upon
any  Collateral or any other  property  which is security for the  Obligations),
first, to all Obligations  (other than the outstanding  principal  amount of the
KWS Supplemental Revolving Loans) which are then due and payable, second, to all
Obligations (other than the outstanding principal amount of the KWS Supplemental
Revolving  Loans)  which  are  not  then  due and  payable,  and  third,  to the
outstanding  principal amount of the KWS Supplemental  Revolving Loans,  except,
that, (i) on the first day of each calendar  month,  (ii) upon the occurrence of
an Event of Default or act, condition or event which with notice,  lapse of time

                                       12
<PAGE>

or both would  constitute an Event of Default,  shall exist or have occurred and
be  continuing,  (iii) during the period on and after the date of termination or
non-renewal  of the Loan  Agreement,  and (iv) to the extent that the  aggregate
principal amount of the KWS Supplemental Revolving Loans at any time outstanding
is in excess of the KWS Supplemental Revolving Loan Limit then in effect, Lender
may apply payments  received or collected from Borrower or Guarantors or for the
account of Borrower or Guarantors (including,  without limitation,  the monetary
proceeds of  collections  or of  realization  upon any  Collateral  or any other
property which is security for the Obligations), first, to such Obligations that
are then due and payable and then in such order or manner as Lender determines.
3.

4. References in Section 9 of the Loan  Agreement. The  phrase ",Revolving  Loan
Limit"  is  hereby  inserted  after  the  term  "sublimits"  each  time the term
sublimits  appears  in  Sections  9.7(b)(ii),   9.9(g)(vii),   9.9(h)(vi),   and
9.9(m)(vii) of the Loan Agreement.
5.
6. Priority of Liens.  The first sentence of Section  8.4 of the Loan  Agreement
is hereby  deleted  and the following substituted therefor:
7.
                  "The security interests and liens granted to Lender under this
                  Agreement and the other Financing Agreements  constitute valid
                  and perfected  first priority liens and security  interests in
                  and upon the Collateral  except with respect to any assets and
                  properties of  Acquisition  which are included  within the KWS
                  Term Loan Collateral."

1.  Sales of Assets.
2.
(a) Section 9.7(b)(ii) is  hereby amended to include the following at the end of
the Section:
(b)
                  "; provided, that, in the case of Acquisition, Acquisition may
                  only dispose of Equipment and Real Property  constituting  KWS
                  Term Loan  Collateral in accordance  with the terms of the KWS
                  Term  Loan  Documents,  except,  that,  as  at  any  time  the
                  outstanding  Loans exceed the amount of the Loans available to
                  Borrower  based on the lending  formulas  set forth in Section
                  2.1  hereof,  subject  to  any  then  applicable  Availability
                  Reserves,   sublimits   and  the   Maximum   Credit,   or  the
                  intercompany   loans  by  Borrower  to  KWS  pursuant  to  the
                  Intercompany Loan Documents exceeds the Guarantor Availability
                  of KWS (less the KWS Supplemental Revolving Loan Limit then in
                  effect),  the Net  Available  Proceeds  from such  disposition
                  equal to such Loans  which  exceed the  amounts  available  to
                  Borrower  or  KWS  shall  be  paid   directly  to  Lender  for
                  application  to the  Obligations  in such  order and manner as
                  Lender shall determine;"

                                       13
<PAGE>

(a) The first  parenthetical in Section 9.7(b)(vii) is hereby amended to include
the  phrase  "and  Acquisition,  so long  as the  KWS  Term  Loan  has not  been
indefeasibly paid in full, except with respect sales of KWS Term Loan Collateral
in accordance with the KWS Term Loan Documents" after the term "Morgan" appears.
(b)
(c) Section 9.7(b)(viii) is hereby amended to include the following  at  the end
of such Section:
(d)
                  "provided,  further, that, in the case of Acquisition, so long
                  as the KWS Term Loan has not been  indefeasibly  paid in full,
                  Acquisition may only sell less than all or  substantially  all
                  of its assets (other than Capital Stock) constituting KWS Term
                  Loan   Collateral  in  accordance   with  the  KWS  Term  Loan
                  Documents;"

1.  Encumbrances. Section 9.8(e) is  hereby  amended to include the following at
the end of such Section:
2.
                  "except,  that,  so long as the KWS  Term  Loan  has not  been
                  indefeasibly paid in full,  Acquisition may not grant any such
                  purchase money security  interests or purchase money mortgages
                  unless such liens are permitted  pursuant to the KWS Term Loan
                  Documents;"

1.   Indebtedness.
2.
(a)  Section 9.9(a) is hereby amended to  include  the  following  at the end of
such Section:
(b)
                    "and the  Indebtedness  owing by  Acquisition  to  Lender in
                    respect of the KWS Term Loan and KWS Term Loan Documents;"

(a) The  definition  of  "Refunding  Indebtedness"  in Section  9.9(q) is hereby
amended to include the indebtedness and  "Obligations"  (as such term is defined
in the KWS Term Loan  Documents)  of KWS to Lender under and pursuant to the KWS
Term Loan Documents.
(b)
2. Events of Default. Section 10.1(i) is hereby amended to include the following
at the end of the Section:
3.
                     "or Event of Default under the KWS Term Loan Documents;"

1. Amendments to Schedules and Exhibits.  Schedules 1.20,  1.35, 1.48, 6.3, 8.1,
8.4, 8.8, 8.9, 9.9 and 9.10 to the Loan  Agreement  are hereby  supplemented  to
include the  information  with  respect to  Acquisition  and KWS as set forth as

                                       14
<PAGE>

indicated  on  Schedule  B  annexed  hereto  and  the  Information  Certificates
delivered by Acquisition  and KWS in accordance  with Section 20(b) hereof shall
constitute its Information  Certificate for purposes of Section 1.45 of the Loan
Agreement.
2.
3. KWS Term Loan. Notwithstanding anything to the contrary set forth in the Loan
Agreement,  Lender  hereby  consents  to the  making of the KWS Term Loan on the
terms and conditions set forth in the KWS Term Loan Documents.
4.
5. Representations,  Warranties  and  Covenants.   In addition to the continuing
representations,  warranties  and  covenants  heretofore  or  hereafter  made by
Borrower or Guarantors  to Lender  pursuant to the other  Financing  Agreements,
Borrower and  Guarantors  hereby  represent,  warrant and  covenant  with and to
Lender  as  follows  (which   representations,   warranties  and  covenants  are
continuing  and shall  survive the  execution  and delivery  hereof and shall be
incorporated into and made a part of the Financing Agreements):
6.
(i) The KWS  Merger is valid and  effective  in  accordance  with the KWS Merger
Agreements,  and  the  corporation  statutes  of the  state  of  Texas  and  KWS
Manufacturing  Company,  Inc. shall be the surviving corporation pursuant to the
KWS Merger.
(ii)
(iii)  All  actions  and  proceedings  required  by the KWS  Merger  Agreements,
applicable law and regulation  (including,  but not limited to,  compliance with
Hart-Scott-Rodino Anti-Trust Improvement Act of 1976 as amended) have been taken
and the  transactions  required  thereunder  have been duly and validly taken an
consummated.
(iv)
(v) No court of competent  jurisdiction  has issued any injunction,  restraining
order or other order which prohibits  consummation of the transactions described
in the KWS Merger  Agreements  and no government  action or proceeding  has been
threatened or commenced seeking any injunction, restraining order or other order
which seeks to void or otherwise  modify the  transactions  described in the KWS
Merger Agreements.
(vi)
(vii)  Contemporaneously with the KWS Merger,  KWS,  as survivor pursuant to the
KWS Merger,  shall continue to be and shall be directly and primarily  liable in
all respects for all of the Obligations and the Obligations are  unconditionally
owing to Lender,  without offset, defense or counterclaim of any kind, nature or
description whatsoever.  The security interests in and liens upon the assets and
properties of Acquisition in favor of Lender shall continue upon such assets and
properties  to which KWS shall  succeed  pursuant  to the KWS  Merger,  and such
security interests and liens and their perfection and priority shall continue in
all respects in full force and effect.  Without  limiting the  generality of the
foregoing,  the KWS Merger shall in no way limit, impair or adversely affect the
Obligations,  howsoever arising, or any security interests or liens securing the
same.
(viii)
(ix) The loans and the  investments of Borrower and MIC in  Acquisition  and the
other  arrangements  of  Borrower  and the other  Guarantors  with  Acquisition,
contemplated  herein do not violate any law or regulation or any order or decree
of any court or governmental  instrumentality in any respect and do not and will

                                       15
<PAGE>

not  conflict  with or result in the breach of, or  constitute  a default in any
respect  under,  any  agreement,  document  or  instrument  to  which  Borrower,
Acquisition or any other  Guarantor is a party or may be bound, or result in the
creation  or  imposition  of any  lien,  charge or  encumbrance  upon any of the
property  of  Borrower,  Acquisition  or any  other  Guarantor  or  violate  any
provision  of  the  Certificate  of   Incorporation   or  By-Laws  of  Borrower,
Acquisition or any other Guarantor.
(x)
(xi) Borrower and  Acquisition  have  delivered,  or caused to be delivered,  to
Lender,  true, correct and complete copies of the KWS Merger  Agreements.
(xii)
(b) After  giving  effect to the KWS Merger,  all of the issued and  outstanding
shares of Capital Stock of KWS shall be directly and beneficially owned and held
by MIC and all of such shares have been duly  authorized  and are fully paid and
non-assessable, free and clear of all claims, liens, security interests, pledges
and encumbrances of any kind, except as permitted in the Loan Agreement.
(c)
(d) This Amendment has been duly authorized,  executed and delivered by Borrower
and  Guarantors,  and the agreements and  obligations of Borrower and Guarantors
contained herein constitute legal, valid and binding obligations of Borrower and
Guarantors  enforceable against Borrower and Guarantors in accordance with their
respective terms.
(e)
(f) Neither the execution and delivery of this Amendment,  nor the modifications
to the Financing  Agreements  contemplated  by this Amendment  shall violate any
applicable  law or  regulation,  or any  order  or  decree  of any  court or any
governmental  instrumentality  in any respect or does or shall  conflict with or
result in the  breach of, or  constitute  a default in any  respect  under,  any
indenture,  including,  without limitation, the Senior Indenture or any material
mortgage,  deed of trust,  security agreement,  agreement or instrument to which
Borrower or any  Guarantor is a party or may be bound,  or violate any provision
of the organizational documents of Borrower or Guarantors.
(g)
(h) All of the representations and warranties set forth in the Loan Agreement as
amended hereby, and the other Financing Agreements,  are true and correct in all
material respects,  except to the extent any such  representation or warranty is
made as of a specified date, in which case such representation or warranty shall
have been true and correct as of such date.
(i)
(j) No Event of  Default  exists  on the date of this  Amendment  (after  giving
effect to the amendments to the Loan Agreement provided in this Amendment).
(k)
(l) KWS has become a Restricted Subsidiary and Subsidiary Guarantor under and in
accordance with the terms of the Senior Note Indenture.
(m)
(n) Each of Acquisition,  and KWS Manufacturing Company, Inc. (immediately prior
to the KWS Merger) is solvent,  and KWS,  after giving effect to the KWS Merger,
will  continue  to be  solvent  after the  assumption  of the  Obligations,  the
creation of the security  interests of Lender and the  consummation of the other

                                       16
<PAGE>

transactions contemplated hereunder, is able to pay its debts as they mature and
has (and has reason to believe it will continue to have) sufficient capital (and
not  unreasonably  small capital) to carry on its business and all businesses in
which  it is  about  to  engage.  The  assets  and  properties  of KWS at a fair
valuation and at their present fair salable value are, and will be, greater than
the Indebtedness of KWS, and including  subordinated and contingent  liabilities
computed  at the  amount  which,  to the best of KWS's and the other  Borrowers'
knowledge and to the best of Guarantors'  knowledge,  represents an amount which
can reasonably be expected to become an actual or matured liability.
(o)
(p) Borrower and KWS shall deliver, or cause to be delivered,  to Lender, within
ninety (90) days from the date  hereof,  an opening  balance  sheet of KWS after
giving effect to the  transactions  contemplated  by this  Agreement and the KWS
Merger  Agreements,  together with a certificate,  dated on such date, signed by
the Chief  Financial  Officer of KWS certifying  that such opening balance sheet
has been  prepared in  accordance  with GAAP and presents  fairly the  financial
condition  of KWS as of that  date.
(q)
(i)  Loans.  Subject to the terms and conditions  contained  herein and the Loan
Agreement,  Lender  hereby  consents  to the  intercompany  loan by  Borrower to
Acquisition  as of the date  hereof with the  proceeds  of the KWS  Supplemental
Revolving Loans as described in Section 5 hereof and the  intercompany  loans by
Borrower to  Acquisition on and after the date hereof from time to time with the
proceeds  of the  Loans as  described  in  Section  2.4 of the  Loan  Agreement;
provided, that, the intercompany loans by Borrower to Acquisition as of the date
hereof are and shall be evidenced by the promissory  note dated the date hereof,
issued by  Acquisition  in favor of  Borrower,  the  original  of which shall be
endorsed,  assigned and  delivered to Lender to hold as part of the  Collateral,
each of the intercompany  loans by Borrower to Acquisition after the date hereof
shall be evidenced by the Intercompany Note, and in no event, except in Lender's
discretion,  shall  the  total  amount of the  Indebtedness  of KWS to  Borrower
evidenced  by or arising  under the  Intercompany  Note at any time  outstanding
exceed the Guarantor Availability with respect to KWS.
(ii)
7.  Amendment Fee. In  consideration  of this  Amendment,  Borrower shall pay to
Lender or Lender, at its option,  may charge the account of Borrower  maintained
by Lender an  amendment  fee in the  aggregate  amount of $35,000,  which fee is
fully  earned as of the date  hereof and may,  at  Lender's  option,  be charged
directly to Borrower's loan account maintained by Lender.
8.
9. Conditions Precedent.  The making of the KWS Supplemental Revolving Loans and
the  effectiveness  of the consents and  amendments  set forth herein,  shall be
subject to the receipt by Lender of each of the following, in form and substance
satisfactory to Lender:
10.
(a) an  original  of  this Amendment, duly authorized, executed and delivered by
Borrower and Guarantors;
(b)

                                       17
<PAGE>

(c)  Lender  shall  have received, in form and substance satisfactory to Lender,
the other KWS Amendment Agreements, each duly authorized, executed and delivered
by the parties thereto;
(d)
(e)  Lender  shall  have received, in form and substance satisfactory to Lender,
evidence that the KWS Merger Agreements have been duly executed and delivered by
and to the appropriate  parties thereto and the transactions  contemplated under
the  terms  of the KWS  Merger  Agreements  have  been  consummated  prior to or
contemporaneously with the execution of this Amendment;
(f)
(g)  Lender  shall  have received, in form and substance satisfactory to Lender,
all  releases,  terminations  and such other  documents as Lender may request to
evidence and  effectuate the  termination  by the KWS Existing  Lenders of their
respective  financing  arrangements  with KWS and the termination and release by
each of them of any interest in and to any assets and  properties  of KWS,  duly
authorized,  executed and delivered by each of them, including,  but not limited
to, UCC termination statements for all UCC financing statements previously filed
by each of them, as secured party and KWS, as debtor;
(h)
(i)  Lender  shall  have received, in form and substance satisfactory to Lender,
evidence  that all  required  consents or  approvals  of any persons  other than
Lender to the KWS Merger,  and the loans and  investments by Borrower and MIC in
Acquisition  and the other  arrangements  of Borrower  and the  Guarantors  with
Acquisition and KWS contemplated herein have been obtained;
(j)
(k)  Lender  shall  have received, in form and substance satisfactory to Lender,
evidence  that (i) the  Articles  of Merger  with  respect  to the merger of KWS
Holding Company,  Inc., and KWS Manufacturing  Co., Inc. has been filed with the
Secretary of State of Texas and such merger is valid and effective in accordance
with the terms and provisions of the applicable  corporate statutes of the State
of Texas,  and (ii) the  Articles of Merger  with  respect to the KWS Merger has
been filed with the  Secretary of State of Texas and the KWS Merger is valid and
effective  in  accordance  with  the  terms  and  provisions  of the  applicable
corporate statutes of the State of Texas;
(l)
(m)  Lender  shall  have received the originals of the Intercompany Note made by
Acquisition,  as duly  authorized,  executed and delivered by Acquisition and as
duly endorsed and assigned by Borrower to Lender;
(n)
(o)  Lender shall have received, in form and substance satisfactory to Lender, a
fully executed copy of the Third Supplemental  Indenture,  dated on or about the
date hereof,  to the Senior Note  Indenture  pursuant to which  Acquisition  has
become a Subsidiary  Guarantor and  Restricted  Subsidiary (as each such term is
defined in the Senior Note Indenture);
(p)
(i)  Lender has received evidence, in form and substance satisfactory to Lender,
that, on or before the date hereof,  MIC has made a cash equity  contribution to

                                       18
<PAGE>

Acquisition, in immediately available funds in an amount not less than $750,000,
and JBPCO has made a loan, in the principal  amount of $810,000 to  Acquisition,
each of which has been used to pay a portion  of the cash  consideration  due to
Mr.  Floyd W. Watkins  and/or  repay the  existing  debt of KWS prior to the KWS
Merger in accordance with the terms of the KWS Merger Agreements;
(ii)
(q)  Lender shall  have  received, in form and substance satisfactory to Lender,
the KWS Term Loan Documents, duly authorized,  executed and delivered by KWS and
the other Persons or parties thereto;
(r)
(s)  all representations  and  warranties  contained  herein  and  in  the Loan
Agreement shall be true and correct in all material respects;
(t)
(u)  Lender  shall have received evidence, in form and substance satisfactory to
Lender, that Lender has valid perfected and first priority security interests in
and liens upon the  Collateral  of KWS and  Acquisition  and any other  property
which is  intended  to be  security  for the  Obligations,  subject  only to the
Permitted Liens;
(v)
(w)  Lender  shall  have  completed a field review of the Records and such other
information  with respect to the Collateral of Acquisition as Lender may require
to determine  the amount of Loans  available  to Borrower,  the results of which
shall be satisfactory to Lender,  not more than three (3) Business Days prior to
the date hereof;
(x)
(y)  Lender  shall have  received, in form and substance satisfactory to Lender,
the collateral assignment by Borrower to Lender of all right, title and interest
of Borrower under or pursuant to the  Intercompany  Loan  Documents  relating to
Acquisition and granting Lender such other rights with respect thereto as Lender
may  require,   duly   authorized,   executed  and  delivered  by  Borrower  and
acknowledged  and agreed to by Acquisition  (including any waiver of defenses by
Acquisition as against Lender as assignee of Borrower);
(z)
(aa)   Lender   shall  have  received  evidence  of  insurance  and  loss  payee
endorsements  with respect to the Collateral of  Acquisition  required under the
Financing Agreements,  in form and substance reasonably  satisfactory to Lender,
and certificates of insurance policies and/or endorsements naming Lender as loss
payee with respect to such Collateral; and
(bb)
(cc)   Lender shall have received, in form and substance satisfactory to Lender,
the opinion letter of counsel to Borrower, Acquisition and KWS (as the surviving
corporation  of the KWS Merger) with respect to the KWS Merger  Agreements,  the
KWS  Merger,  the KWS  Amendment  Agreements,  Senior  Note  Indenture,  and the
security  interest and liens of Lender with respect to the  Collateral  and such
other matters as Lender may request;
(dd)
(ee)   Lender  shall have received the fee referred to in Section 19 hereof; and
(ff)
(gg)   after  giving  effect to the amendments to the Loan Agreement provided in
this  Amendment,  no Event of Default shall exist or have occurred and no event,
act or  condition  shall have  occurred or exist which with notice or passage of

                                       19
<PAGE>

time or both would constitute an Event of Default.
(hh)
11.  Additional  Events  of Default. The parties hereto acknowledge, confirm and
agree  that  the  failure  of  Borrower  or any  Guarantor  to  comply  with the
covenants,  conditions and agreements contained herein shall constitute an Event
of Default  under the  Financing  Agreements  (subject  to the  applicable  cure
period,  if any, with respect  thereto  provided for in the Loan Agreement as in
effect on the date hereof).
12.
13.  Notices.  For purposes of Section 12.2 of the Loan Agreement, notices shall
be sent to Acquisition at its offices  located at 1100 Louisiana  Street,  Suite
5400,  Houston,  Texas  77002,  and upon the  effective  date of the KWS  Merger
notices to  Acquisition  shall be sent to KWS at 3041  Conveyor  Drive,  Joshua,
Texas 76058.
14.
15.  Effect  of this Amendment.  Except for the specific amendment expressly set
forth herein, no other changes or modifications to the Financing Agreements, and
no waivers of any provisions  thereof are intended or implied,  and in all other
respects the Financing Agreements are hereby specifically ratified, restated and
confirmed by all parties hereto as of the date hereof. To the extent of conflict
between the terms of this  Amendment  and the other  Financing  Agreements,  the
terms of this  Amendment  shall  control.  The Loan Agreement and this Amendment
shall be read and construed as one agreement.
16.
17.  Governing Law.  The rights and obligations hereunder of each of the parties
hereto shall be governed by and  interpreted  and determined in accordance  with
the internal laws of the State of New York (without  giving effect to principles
of conflicts of laws).
18.
19.  Binding  Effect.  This  Amendment  shall  be  binding upon and inure to the
benefit  of each of the  parties  hereto  and their  respective  successors  and
assigns.
20.
21.  Counterparts. This Amendment may be executed in any number of counterparts,
but all of such  counterparts  shall  together  constitute  but one and the same
agreement.  In making  proof of this  Amendment,  it shall not be  necessary  to
produce or account for more than one  counterpart  thereof signed by each of the
parties hereto.
22.
23.
24.
25.
26.
                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       20
<PAGE>

         Please sign in the space  provided  below and return a  counterpart  of
this  Amendment,  whereupon  this  Amendment,  as so agreed to and  accepted  by
Lender, shall become a binding agreement among Borrower, Guarantors and Lender.

                                      Very truly yours,

                                      J.B. POINDEXTER & CO., INC.

                                      By:

                                      Title:

AGREED AND ACCEPTED:

CONGRESS FINANCIAL CORPORATION

By:

Title:

ACKNOWLEDGED AND CONSENTED TO:

EFP CORPORATION

By:

Title:

LOWY GROUP, INC.

By:

Title:

MAGNETIC INSTRUMENTS CORP.

By:

Title:

                                       21
<PAGE>

                       [SIGNATURES CONTINUE ON NEXT PAGE]

                    [SIGNATURES CONTINUED FROM PREVIOUS PAGE]

MORGAN TRAILER MFG. CO.

By:

Title:

TRUCK ACCESSORIES GROUP, INC.

By:

Title:

RAIDER INDUSTRIES INC.

By:

Title:

KWS ACQUISITION CORP.

By:

Title:

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