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                      FOURTH AMENDMENT TO CREDIT AGREEMENT


         This Amendment is made as of the ____ day of __________, 1997, by and
between CRAGAR INDUSTRIES, INC., a Delaware corporation (the "Borrower"), and
NORWEST BUSINESS CREDIT, INC., a Minnesota corporation (the "Lender").

                                    Recitals

         The Borrower and the Lender have entered into the Credit and Security
Agreement dated as of April 14, 1995, as amended by that certain First Amendment
to Credit Agreement dated as of September 19, 1996, as amended by that certain
Second Amendment to Credit Agreement dated as of February 12, 1997, as amended
by that certain Third Amendment to Credit Agreement dated August 4, 1997
(collectively, the "Credit Agreement").

         The Lender has agreed to make certain loan advances to the Borrower and
to issue or cause to be issued certain letters of credit for the account of the
Borrower pursuant to the terms and conditions set forth in the Credit Agreement.

         The loan advances under the Credit Agreement are evidenced by the
Borrower's promissory note dated as of April 14, 1995, in the maximum principal
amount of $9,500,000.00 and payable to the order of the Lender (the "Note").

         All indebtedness of the Borrower to the Lender is secured pursuant to
the terms of the Credit Agreement and all other Security Documents as defined
therein (collectively, the "Security Documents"). Michael L. Hartzmark
("Hartzmark") has entered into that certain Support Agreement with the Borrower
and the Lender dated as of April 14, 1995.

         The Borrower has requested that certain amendments be made to the
Credit Agreement which the Lender is willing to make pursuant to the terms and
conditions set forth herein.

                                   Agreements

         NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:

Terms used in this Amendment which are defined in the Credit Agreement shall
have the same meanings as defined therein, unless otherwise defined herein.

The Credit Agreement is hereby amended as follows:

The definition of Borrowing Base is hereby deleted in its entirety and replaced
as follows:

                  "Borrowing Base" means, at any time and subject to change from
time to time in the Lender's sole discretion, the lesser of

                  (i)      the Commitment, or

                  (ii)     the sum of

                           (A)      75% of Eligible Accounts, plus
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                           (B)      The lesser of (x) the sum of the following
percentages of various classes of Eligible Inventory; (i) 55% of Raw Materials
Inventory; and (ii) 55% of Current Finished Goods Inventory; or (y)
$4,500,000.00, plus

                           (C)      An overadvance in an amount not to exceed
$1,000,000.00, which overadvance shall be reduced to $925,000.00 on October 10,
1997; to $875,000.00 on October 17, 1997; to $800,000.00 on November 7, 1997; to
$725,000.00 on November 14, 1997, to $650,000.00 on November 21, 1997; to
$575,000.00 on November 28, 1997; to $500,000.00 on December 5, 1997; to
$400,000.00 on December 12, 1997; to $300,000.00 on December 19, 1997; to
$175,000.00 on December 26, 1997; to $50,000.00 on December 31, 1997; and to
$0.00 on January 7, 1998, at which time no overadvance shall exist.

There is hereby added a new Section 6.1(p) to the Credit Agreement which
provides as follows:

                  (p)      weekly, Inventory reports.

Except as explicitly amended by this Amendment, all of the terms and conditions
of the Credit Agreement shall remain in full force and effect and shall apply to
any advance or letter of credit thereunder.

The Borrower agrees to pay the Lender, as of the date hereof, a fully earned,
non-refundable fee in the amount of $20,000.00 in consideration of the execution
by the Lender of this Amendment.

This Amendment shall be effective upon receipt by the Lender of an executed
original hereof, together with each of the following, each in substance and form
acceptable to the Lender in its sole discretion:

The Acknowledgment and Agreement of Hartzmark set forth at the end of this
Amendment, duly executed by Hartzmark.

Certificate of the Secretary of the Borrower certifying as to (i) the
resolutions of the board of directors of the Borrower approving the execution
and delivery of this Amendment, (ii) the fact that the Articles of Incorporation
and Bylaws of the Borrower, which were certified and delivered to the Lender
pursuant to the Certificate of the Borrower's Secretary dated as of April 14,
1995 in connection with the execution and delivery of the Credit Agreement
continue in full force and effect and have not been amended or otherwise
modified except as set forth in the Certificate to be delivered, and (iii)
certifying that the officers and agents of the Borrower who have been certified
to the Lender, pursuant to the Certificate of the Borrower's Secretary dated as
of April 14, 1995, as being authorized to sign and to act on behalf of the
Borrower continue to be so authorized or setting forth the sample signatures of
each of the officers and agents of the Borrower authorized to execute and
deliver this Amendment and all other documents, agreements and certificates on
behalf of the Borrower.

An updated Inventory appraisal, performed by an appraiser acceptable to Lender
and performed at no cost to Lender.

An updated Equipment appraisal, performed by an appraiser acceptable to Lender
and performed at no cost to Lender.

The Borrower hereby represents and warrants to the Lender as follows:

The Borrower has all requisite power and authority to execute this Amendment and
to perform all of its obligations hereunder, and this Amendment has been duly
executed and delivered by the Borrower and constitutes the legal, valid and
binding obligation of the Borrower, enforceable in accordance with its terms.


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The execution, delivery and performance by the Borrower of this Amendment have
been duly authorized by all necessary corporate action and do not (i) require
any authorization, consent or approval by any governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, (ii)
violate any provision of any law, rule or regulation or of any order, writ,
injunction or decree presently in effect, having applicability to the Borrower,
or the articles of incorporation or bylaws of the Borrower, or (iii) result in a
breach of or constitute a default under any indenture or loan or credit
agreement or any other agreement, lease or instrument to which the Borrower is a
party or by which it or its properties may be bound or affected.

All of the representations and warranties contained in Article 5 of the Credit
Agreement are correct on and as of the date hereof as though made on and as of
such date, except to the extent that such representations and warranties relate
solely to an earlier date.

All references in the Credit Agreement to "this Agreement" shall be deemed to
refer to the Credit Agreement as amended hereby; and any and all references in
the Security Documents to the Credit Agreement shall be deemed to refer to the
Credit Agreement as amended hereby.

The execution of this Amendment and acceptance of any documents related hereto
shall not be deemed to be a waiver of any Default or Event of Default under the
Credit Agreement or breach, default or event of default under any Security
Document or other document held by the Lender, whether or not known to the
Lender and whether or not existing on the date of this Amendment.

The Borrower hereby absolutely and unconditionally releases and forever
discharges the Lender, and any and all participants, parent corporations,
subsidiary corporations, affiliated corporations, insurers, indemnitors,
successors and assigns thereof, together with all of the present and former
directors, officers, agents and employees of any of the foregoing, from any and
all claims, demands or causes of action of any kind, nature or description,
whether arising in law or equity or upon contract or tort or under any state or
federal law or otherwise, which the Borrower has had, now has or has made claim
to have against any such person for or by reason of any act, omission, matter,
cause or thing whatsoever arising from the beginning of time to and including
the date of this Amendment, whether such claims, demands and causes of action
are matured or unmatured or known or unknown.

The Borrower hereby reaffirms its agreement under the Credit Agreement to pay or
reimburse the Lender on demand for all costs and expenses incurred by the Lender
in connection with the Credit Agreement, the Security Documents and all other
documents contemplated thereby, including without limitation all reasonable fees
and disbursements of legal counsel. Without limiting the generality of the
foregoing, the Borrower specifically agrees to pay all fees and disbursements of
counsel to the Lender for the services performed by such counsel in connection
with the preparation of this Amendment and the documents and instruments
incidental hereto. The Borrower hereby agrees that the Lender may, at any time
or from time to time in its sole discretion and without further authorization by
the Borrower, make a loan to the Borrower under the Credit Agreement, or apply
the proceeds of any loan, for the purpose of paying any such fees,
disbursements, costs and expenses and the fee required under paragraph 4 hereof.

This Amendment and the Acknowledgment and Agreement of Hartzmark may be executed
in any number of counterparts, each of which when so executed and delivered
shall be deemed an original and all of which counterparts, taken together, shall
constitute one and the same instrument.


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         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.

                  CRAGAR INDUSTRIES, INC., a Delaware corporation



                           By ___________________________________

                                    Its _______________________________


                  NORWEST BUSINESS CREDIT, INC., a Minnesota corporation



                           By ___________________________________

                                    Its _______________________________



                    ACKNOWLEDGMENT AND AGREEMENT OF HARTZMARK


         The undersigned, Michael L. Hartzmark, having entered into that certain
Support Agreement dated as of April 14, 1995, with Cragar Industries, Inc. (the
"Borrower") and Norwest Business Credit, Inc. (the "Lender"), hereby (i)
acknowledges receipt of the foregoing Amendment; (ii) consents to the terms and
execution thereof; (iii) reaffirms his obligations to the Lender pursuant to the
terms of said Support Agreement; and (iv) acknowledges that the Lender may
amend, restate, extend, renew or otherwise modify the Credit Agreement and any
indebtedness or agreement of the Borrower, or enter into any agreement or extend
additional or other credit accommodations, without notifying or obtaining the
consent of the undersigned and without impairing the obligations of the
undersigned under said Support Agreement.



                                            ______________________________
                                            Michael L. Hartzmark


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