
                            ASSET PURCHASE AGREEMENT



                          DATED AS OF NOVEMBER 7, 1996



                                      AMONG



                       ACTION PERFORMANCE COMPANIES, INC.,


                             SII ACQUISITION, INC.,


                             SPORTS IMAGE, INC., AND


                              R. DALE EARNHARDT AND


                               TERESA H. EARNHARDT



<PAGE>
                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                                Page
                                                                                                                ----
<S>                                                                                                              <C>
SECTION 1
TRANSFER OF ASSETS..............................................................................................  1
         1.1        Purchase and Sale of Assets.................................................................  1
         1.2        Assumption of Liabilities...................................................................  1

SECTION 2
PURCHASE PRICE..................................................................................................  2
         2.1        Purchase Price..............................................................................  2
         2.2        Allocation of Purchase Price................................................................  2

SECTION 3
REPRESENTATIONS AND WARRANTIES..................................................................................  2
         3.1        Representations and Warranties of Seller....................................................  2
                    (a)    Due Incorporation, Good Standing, and Qualification..................................  2
                    (b)    Corporate Authority..................................................................  2
                    (c)    Capital Stock........................................................................  3
                    (d)    Options, Warrants, and Rights........................................................  3
                    (e)    Subsidiaries.........................................................................  3
                    (f)    Financial Statements.................................................................  3
                    (g)    No Material Change...................................................................  3
                    (h)    Title to Properties..................................................................  3
                    (i)    Litigation...........................................................................  4
                    (j)    Rights and Licenses..................................................................  4
                    (k)    No Violation.........................................................................  4
                    (l)    Taxes................................................................................  4
                    (m)    Accounts Receivable..................................................................  4
                    (n)    Contracts............................................................................  4
                    (o)    Compliance with Law and Other Regulations............................................  4
                    (p)    Insurance............................................................................  5
                    (q)    Articles, Bylaws, and Minute Books...................................................  5
                    (r)    Employees............................................................................  5
                    (s)    Intent and Access....................................................................  5
                    (t)    Accuracy of Statements...............................................................  5
         3.2        Representations and Warranties of Buyer.....................................................  5
                    (a)    Due Incorporation, Good Standing, and Qualification..................................  5
                    (b)    Corporate Authority..................................................................  5
                    (c)    Capital Stock........................................................................  6
                    (d)    Options, Warrants, and Rights........................................................  6
                    (e)    Subsidiaries.........................................................................  6
                    (f)    Financial Statements.................................................................  6
                    (g)    No Material Change...................................................................  6
                    (h)    Title to Assets and Properties.......................................................  7
                    (i)    Litigation...........................................................................  7
                    (j)    Rights and Licenses..................................................................  7
                    (k)    No Violation.........................................................................  7
                    (l)    Taxes................................................................................  7
</TABLE>
                                                    i
<PAGE>
<TABLE>
<S>                                                                                                              <C>
                    (m)    Accounts Receivable..................................................................  7
                    (n)    Contracts............................................................................  8
                    (o)    Compliance with Law and Other Regulations............................................  8
                    (p)    Insurance............................................................................  8
                    (q)    Articles, Bylaws, and Minute Books...................................................  8
                    (r)    Employees............................................................................  8
                    (s)    SEC Reports..........................................................................  8
                    (t)    Accuracy of Statements...............................................................  8
                    (u)    Status of Buyer Common Stock Being Issued............................................  9
         3.3        Survival of Representations and Warranties..................................................  9

SECTION 4
COVENANTS TO SELLER.............................................................................................  9
         4.1        Covenants of Seller.........................................................................  9
                    (a)    Complete Liquidation and Dissolution.................................................  9
                    (b)    Filing of Tax Returns................................................................  9
                    (c)    Dividends............................................................................  9
                    (d)    Change of Corporate Name.............................................................  9
         4.2        Further Assurances..........................................................................  9

SECTION 5
GENERAL......................................................................................................... 10
         5.1        Costs and Indemnity Against Finders......................................................... 10
         5.2        Controlling Law............................................................................. 10
         5.3        Notices..................................................................................... 10
         5.4        Binding Nature of Agreement; No Assignment.................................................. 10
         5.5        Entire Agreement............................................................................ 10
         5.6        Paragraph Headings.......................................................................... 10
         5.7        Counterparts................................................................................ 10
</TABLE>
                                       ii
<PAGE>
                            ASSET PURCHASE AGREEMENT


                  AGREEMENT   dated  as  of  November  7,  1996,   among  ACTION
PERFORMANCE  COMPANIES,  INC., an Arizona corporation  ("Buyer");  SPORTS IMAGE,
INC., a North Carolina corporation ("Seller"); SII ACQUISITION, INC., an Arizona
corporation  ("Designated  Subsidiary");  and R. DALE  EARNHARDT  and  TERESA H.
EARNHARDT (together "Shareholder").

                  Buyer  desires to  acquire,  and Seller  desires to  transfer,
substantially all of the assets, properties, rights, and goodwill of Seller upon
the terms and conditions set forth in this Agreement.

                  To facilitate the transactions  contemplated hereby, Buyer has
formed  Designated  Subsidiary,  which is a wholly owned subsidiary of Buyer and
has  not conducted any business  activities  prior to the date of this Agreement
(the "Closing Date"). Shareholder owns all the capital stock of Seller.

                  NOW,  THEREFORE,  in  consideration of the premises and of the
mutual covenants set forth herein, the parties agree as follows:

                                   SECTION 1
                               TRANSFER OF ASSETS

                  1.1 Purchase and Sale of Assets. Based upon and subject to the
representations,   warranties,   covenants,  agreements,  and  other  terms  and
conditions set forth in this Agreement, Seller hereby sells, conveys, transfers,
assigns, and delivers, and Designated Subsidiary hereby purchases, acquires, and
accepts, as provided herein, all of the assets, properties, rights, and goodwill
of Seller of every kind and description,  wherever located,  including,  without
limitation,  (a) all  assets  and  properties,  tangible  or  intangible,  real,
personal or mixed, (b) notes and accounts  receivables,  (c) computer equipment,
(d) office and warehouse equipment, (e) vehicles, (f) reserves, (g) prepayments,
(h) inventories,  (i) deposits, (j) bank accounts, (k) cash and securities,  (l)
claims and rights under contracts, agreements, leases, and commitments of Seller
of whatever nature  (including all agreements and contract  arrangements with R.
Dale Earnhardt),  (m) the name "Sports Image,  Inc., (n) all computer  programs,
data bases, records,  systems, and processes and all know how, information,  and
trade secrets relating thereto, and (o) all books and records of Seller relating
to Seller's  business.  The assets,  properties,  rights, and goodwill conveyed,
transferred,  assigned,  and delivered by Seller are sometimes herein called the
"Transferred  Assets" and shall include,  without limitation,  all of the assets
and  properties  shown on or  reflected  in the  Balance  Sheet of  Seller as at
September  30, 1996 (the "Base  Balance  Sheet")  and all assets and  properties
acquired by Seller after the date of the Base  Balance  Sheet and to the Closing
Date.  There is,  however,  excluded  from the  assets and  properties  sold and
purchased pursuant to this Agreement,  (i) any assets and properties disposed of
by Seller  since  September  30, 1996 in the ordinary  course of business,  (ii)
Seller's  corporate  franchises,  stock  record  books,  corporate  record books
containing the minutes of meetings of directors and shareholders, and such other
records  as  have  to  do  exclusively  with  Seller's   organization  or  stock
capitalization, and (iii) Seller's tax and employee records.

                  1.2 Assumption of Liabilities.  Designated  Subsidiary  hereby
assumes,  and Buyer shall cause  Designated  Subsidiary to pay or discharge when
due, all debts, obligations,  and liabilities of Seller reflected and accrued on
the Base  Balance  Sheet or  incurred  and  accrued  after  the date of the Base
Balance  Sheet  in  the  ordinary  course  of  business  and  all  other  debts,
obligations,  and  liabilities  of Seller  specifically  listed in the  Seller's
Disclosure Schedule described in Section 3.1; provided, however, that Designated
Subsidiary  does  not  assume,  and  Buyer  shall  have no  obligation  to cause
Designated Subsidiary to pay or discharge when due, any debts,  obligations,  or
liabilities  of Seller (a) that are in existence on the date of the Base Balance
Sheet and do not appear thereon or in the Seller's Disclosure Schedule, (b) that
arise under agreements and commitments that have not been assigned to Designated
Subsidiary pursuant to this Agreement, (c) the existence of which would conflict
with or  constitute  a breach  of any  representation,  warranty,  covenant,  or
agreement made by Seller in this  Agreement,  except to the extent  disclosed in
the Seller's  Disclosure  Schedule,  (d) that arise in connection with lawsuits,
which are not  reflected in the Base  Balance  Sheet or as described in Seller's
Disclosure  Schedule,  brought  against Seller based on any  circumstances  that
occurred on or prior to the Closing Date, (e) that arise by reason of or for any
default,  breach,  or penalty of or by Seller under any agreement or commitment,
which  are not  reflected  in the  Base  Balance  Sheet or as  described  in the
Seller's Disclosure Schedule,  (f) that related to any federal,  state, or local
income,
<PAGE>
sales, personal property, transfer, or other taxes, if any, which may be imposed
on Seller in connection with the transactions  contemplated by this Agreement or
the liquidation and dissolution of Seller,  or (g) that arise in connection with
negotiating the terms of this Agreement, effecting the transactions contemplated
by this Agreement,  and liquidating or dissolving Seller, including the fees and
expenses of Seller's  legal  counsel,  accountants,  and other  consultants  and
advisers.

                                    SECTION 2
                                 PURCHASE PRICE

                  2.1 Purchase  Price.  The purchase  price for the  Transferred
Assets  acquired  pursuant to Section  1.1, in  addition  to the  assumption  of
liabilities  pursuant  to  Section  1.2,  is  an  amount  equal  to  $30,000,000
consisting of (a) a promissory note of Buyer or Designated  Subsidiary ("Buyer's
Promissory  Note") in the  principal  amount of  $24,000,000  due and payable on
January 2, 1997 together with interest on the unpaid principal balance at a rate
of 8% per  annum,  plus  (b)  $6,000,000  in  shares  of  Common  Stock of Buyer
("Buyer's  Common  Stock")  valued at $14.875 per share,  less any  dividends or
other  distributions  to the shareholders of Seller paid between the date of the
Base Balance Sheet and the Closing Date that exceed the amount of  Shareholder's
tax obligation for Seller through October 31, 1996, which amount,  if any, shall
be deducted from the promissory note portion of the purchase price.

                  2.2 Allocation of Purchase Price.  Buyer and Seller agree that
the total  purchase  price  (including  liabilities  assumed) for the assets and
properties  purchased  pursuant to this  Agreement  shall be  allocated to those
assets and  properties  as set forth in Exhibit A as  prepared  by Buyer,  which
shall be attached to this Agreement within 60 days after the date hereof.  Buyer
and Seller agree that the allocation set forth in Exhibit A shall have been made
in accordance with the requirements of Section 1060 of the Internal Revenue Code
of  1986,  as  amended  and  any  applicable  Treasury  Regulations  promulgated
thereunder.  Buyer  and  Seller,  each at its own  expense,  also  agree to file
appropriate   forms  with  the  Internal   Revenue  Service  setting  forth  the
information  required to be furnished to the Internal Revenue Service by Section
1060 and the applicable Treasury  Regulations  thereunder.  In consideration for
agreeing to such allocation and the structure of the  transactions  contemplated
hereby,  Buyer shall cause  Designated  Subsidiary  to pay to or to the order of
Seller,  not later  than 90 days after the end of each year  during the  15-year
period  following the date of this  Agreement,  an amount equal to the lesser of
(a) 10% of the federal tax savings for such year  resulting  from tax deductible
good will relating to the transaction contemplated hereby or (b) $66,000.

                                    SECTION 3
                         REPRESENTATIONS AND WARRANTIES

                  3.1  Representations and Warranties of Seller and Shareholder.
Except as  otherwise  set forth in the  Seller  Disclosure  Schedule  heretofore
delivered  by Seller to and  acknowledged  as  received  by  Buyer,  Seller  and
Shareholder  jointly and severally represent and warrant to Buyer and Designated
Subsidiary as follows:

                           (a)   Due   Incorporation,    Good   Standing,    and
Qualification.  Seller is a corporation duly organized, validly existing, and in
good standing under the laws of the jurisdiction of its  incorporation  with all
requisite  corporate power and authority to own,  operate,  and lease its assets
and  properties and to carry on its business as now being  conducted.  Seller is
not  subject  to any  material  disability  by reason of the  failure to be duly
qualified as a foreign  corporation  for the transaction of business or to be in
good  standing  under  the  laws  of any  jurisdiction.  Seller  has  heretofore
delivered to Buyer a list setting forth, as of the date of this Agreement,  each
jurisdiction in which Seller is qualified to do business.

                           (b)  Corporate  Authority.  Seller has the  corporate
power  and  authority  to  enter  into  this  Agreement  and to  carry  out  the
transactions  contemplated  hereby.  The Board of Directors and  shareholders of
Seller have duly  authorized the execution,  delivery,  and  performance of this
Agreement. No other corporate proceedings on the part of Seller are necessary to
authorize  the  execution  and  delivery  by  Seller  of this  Agreement  or the
consummation by Seller of the transactions  contemplated  hereby. This Agreement
has been duly  executed and delivered by, and  constitutes a legal,  valid,  and
binding  agreement of, Seller and  Shareholder,  enforceable  against Seller and
Shareholder in accordance with its terms,  except that (i) such  enforcement may
be subject to
                                        2
<PAGE>
bankruptcy, insolvency, reorganization, moratorium, or other similar laws now or
hereafter  in effect  relating  to  creditors'  rights,  and (ii) the  remedy of
specific  performance and injunctive and other forms of equitable  relief may be
subject to equitable  defenses and to the  discretion  of the court before which
any proceeding therefore may be brought.

                           (c) Capital Stock. As of the date hereof,  Seller has
an  authorized  capital stock  consisting of 10,000,000  shares of Common Stock,
$.10 par value,  of which 500,000 shares are issued and  outstanding  and all of
which are owned by Shareholder,  free and clear of all claims,  liens,  charges,
and encumbrances.  All of the issued and outstanding  shares of capital stock of
Seller  have  been  validly  authorized  and  issued  and  are  fully  paid  and
nonassessable.

                           (d) Options,  Warrants,  and Rights.  Seller does not
have  outstanding  any  options,  warrants,  or other  rights  to  purchase,  or
securities  or  other  obligations  convertible  into or  exchangeable  for,  or
contracts,  commitments,  agreements,  arrangements, or understandings to issue,
any shares of its capital stock or other securities.

                           (e) Subsidiaries.  Seller has no subsidiaries. Seller
does not  own,  directly  or  indirectly,  any  capital  stock  or other  equity
securities of any corporation or have any direct or indirect equity or ownership
interest in any corporation or other business.

                           (f) Financial Statements. The Balance Sheet of Seller
as of December 31, 1995 and September 30, 1996, and the Statements of Income and
Retained Earnings and Cash Flows of Seller for the year ended December 31, 1995,
and the nine months  ended  September  30, 1996,  have been  compiled by Gregg &
Company,  P.A.,  certified public  accountants.  All of the foregoing  financial
statements  have been prepared in accordance  with standards  established by the
American  Institute of  Certified  Public  Accountants,  which were applied on a
consistent basis, are correct and complete,  and present fairly, in all material
respects,  the  consolidated  financial  position,  results of  operations,  and
changes in financial position of Seller as of their respective dates and for the
periods indicated.  Seller does not have any material liabilities or obligations
of a type that would be included in a balance sheet prepared in accordance  with
generally  accepted  accounting  principles,  whether  related to tax or non-tax
matters, accrued or contingent,  due or not yet due, liquidated or unliquidated,
or  otherwise,  except as and to the extent  disclosed  or reflected in the Base
Balance Sheet or Seller's  Disclosure Schedule or incurred since the date of the
Base Balance Sheet in the ordinary course of business.

                           (g) No Material  Change.  Since  September  30, 1996,
there has not been and there is not threatened  (i) any material  adverse change
in the business, assets,  properties,  financial condition, or operating results
of Seller,  (ii) any loss or damage (whether or not covered by insurance) to any
of the assets or properties of Seller,  which materially  affects or impairs its
ability to conduct its  business,  or (iii) any mortgage or pledge of any assets
or  properties  of Seller,  or any  indebtedness  incurred by Seller  other than
indebtedness,  not material in the aggregate, incurred in the ordinary course of
business.

                           (h)  Title  to   Properties.   Seller  has  good  and
marketable  title  to  all of its  real  and  personal  assets  and  properties,
including  all assets and  properties  reflected  in the Base  Balance  Sheet or
acquired  subsequent to September 30, 1996, except assets or properties disposed
of subsequent to that date in the ordinary  course of business.  Such assets and
properties  are  subject  to  no  mortgage,   indenture,  pledge,  lien,  claim,
encumbrance,  charge,  security  interest,  or title retention or other security
arrangement,  except for liens for the  payment  of  federal,  state,  and other
taxes, the payment of which is neither delinquent nor subject to penalties,  and
except  for other  liens  and  encumbrances  incidental  to the  conduct  of the
business of Seller or the ownership of its assets or properties,  which were not
incurred in connection  with the borrowing of money or the obtaining of advances
and  which do not in the  aggregate  materially  detract  from the  value of the
assets or  properties  of Seller or  materially  impair  the use  thereof in the
operation of its business,  except in each case as disclosed in the Base Balance
Sheet. All leases pursuant to which Seller leases any substantial amount of real
or personal property are valid and effective in accordance with their respective
terms.  Seller owns or has the right to use all assets and properties  necessary
to conduct its business as currently conducted.
                                        3
<PAGE>
                           (i)   Litigation.   There  are  no  actions,   suits,
proceedings,  or other  litigation  pending  or,  to the  knowledge  of  Seller,
threatened  against  Seller,  at law or in equity,  or before or by any federal,
state, municipal, or other governmental department,  commission,  board, bureau,
agency,  or  instrumentality  that,  if  determined  adversely to Seller,  would
individually or in the aggregate have a material adverse effect on the business,
assets,  properties,  operating results,  prospects, or condition,  financial or
otherwise, of Seller.

                           (j) Rights and Licenses. Seller is not subject to any
material  disability  or  liability  by reason of its  failure  to  possess  any
trademark, trademark right, trade name, trade name right, or license.

                           (k) No Violation.  The execution and delivery of this
Agreement and the consummation of the transactions  contemplated hereby will not
violate or result in a breach by Seller of, or  constitute a default  under,  or
conflict with, or cause any  acceleration of any obligation with respect to, (i)
any provision or restriction of any charter, bylaw, loan, indenture, or mortgage
of Seller,  or (ii) any provision or restriction of any lien,  lease  agreement,
contract,  instrument,  order, judgment, award, decree, ordinance, or regulation
or any  other  restriction  of any kind or  character  to which  any  assets  or
properties of Seller is subject or by which Seller is bound.

                           (l)  Taxes.  Seller  has  filed all  federal,  state,
foreign,  local,  and any other tax returns and reports required to be filed and
has paid in full all taxes and assessments,  if any, shown due thereon (together
with  all  interest,  penalties,   assessments,  and  deficiencies  assessed  in
connection  therewith  due  through the date  hereof).  All such tax returns are
accurate  and  complete  in all  material  respects.  No  claims  for  taxes  or
assessments  are  being  asserted  or  threatened  against  Seller.  Seller  has
furnished to Buyer a list of all tax returns  filed for it.  Seller has duly and
validly  filed  elections for S  corporation  status under the Internal  Revenue
Code; none of such elections have been revoked or terminated; and neither Seller
nor  any  shareholder  of  Seller  has  taken  any  action  that  would  cause a
termination of such S elections.

                           (m) Accounts  Receivable.  The accounts receivable of
Seller have been  acquired in the  ordinary  course of  business,  are valid and
enforceable, and are fully collectible,  subject to no known defenses, set-offs,
or counterclaims,  except to the extent of the reserve reflected in the books of
Seller or in such other amount that is not material in the aggregate.

                           (n) Contracts.  Seller is not a party to (i) any plan
or contract providing for bonuses, pensions, options, stock purchases,  deferred
compensation,  retirement  payments,  or  profit  sharing,  (ii) any  collective
bargaining or other contract or agreement with any labor union, (iii) any lease,
installment  purchase  agreement,  or other contract with respect to any real or
personal property used or proposed to be used in its operations,  excepting,  in
each case, items included within aggregate amounts disclosed or reflected in the
Base Balance Sheet, (iv) any employment  agreement or other similar  arrangement
not terminable by it upon 30 days or less notice without  penalty to it, (v) any
contract or agreement for the purchase of any commodity,  material, fixed asset,
or equipment in excess of $100,000,  (vi) any contract or agreement  creating an
obligation  of $100,000 or more,  (vii) any  contract or  agreement  that by its
terms does not terminate or is not  terminable by it upon 30 days or less notice
without penalty to it, (viii) any loan agreement,  indenture,  promissory  note,
conditional  sales  agreement,  or other similar type of  arrangement,  (ix) any
material  license  agreement,  or (x) any contract that may result in a material
loss  or  obligation  to it.  All  material  contracts,  agreements,  and  other
arrangements  to which Seller is a party are valid and enforceable in accordance
with their terms;  Seller and all other  parties to each of the  foregoing  have
performed all obligations  required to be performed to date;  neither Seller nor
any such other  party is in default or in arrears  under the terms of any of the
foregoing;  and no condition  exists or event has occurred that, with the giving
of  notice or lapse of time or both,  would  constitute  a default  under any of
them.

                           (o) Compliance with Law and Other Regulations. Seller
is not  subject  to or has been  threatened  with any  material  fine,  penalty,
liability,  or  disability  as the  result of its  failure  to  comply  with any
requirement  of  federal,  state,  local,  or foreign law or  regulation  or any
requirement of any governmental body or agency having  jurisdiction over it, the
conduct of its business,  the use of its assets and properties,  or any premises
occupied by it.
                                        4
<PAGE>
                           (p)  Insurance.  Seller  maintains  in full force and
effect insurance coverage on its assets, properties,  premises,  operations, and
personnel  in such  amounts  as Seller  deems  appropriate,  all as set forth on
Seller's Disclosure Schedule.

                           (q) Articles,  Bylaws,  and Minute Books.  Seller has
heretofore  delivered  to Buyer  true and  complete  copies of the  Articles  of
Incorporation  and Bylaws of Seller as currently in effect.  The minute books of
Seller contain complete and accurate records of all meetings and other corporate
actions held or taken by the Boards of Directors (or committees of the Boards of
Directors) and shareholders of Seller since its incorporation.

                           (r)  Employees.   Seller  has  never   maintained  or
contributed  to any "employee  benefit plan," as such term is defined in Section
3(3)  of the  Employee  Retirement  Income  Security  Act of  1974,  as  amended
("ERISA"),  including, without limitation, any stock option plan, stock purchase
plan, deferred compensation plan, or other similar employee benefit plan. Seller
never contributed to any "multi-employer  pension plan," as such term is defined
in Section 3(37)(A) of ERISA.

                           (s) Intent and Access. Seller is acquiring the shares
of Buyer's Common Stock and Buyer's Promissory Note without a view to the public
distribution  or  resale  in  violation  of  any  applicable  federal  or  state
securities  laws.  Seller and Shareholder  acknowledge that Buyer's Common Stock
and Buyer's Promissory Note are not registered under the Securities Act of 1933,
as amended or any state  securities  laws and  cannot be sold  publicly  without
registration  thereunder  or an  exemption  from such  registration.  Seller and
Shareholder  understand  that  certificates  for such  shares and such note will
contain a legend with respect to the  restrictions on transfer under federal and
applicable  state  securities  laws as well as the fact that the shares and note
are  "restricted  securities"  under such  federal  and state  laws.  Seller and
Shareholder  have been  furnished  with such  information,  both  financial  and
non-financial,  with respect to the operations, business, capital structure, and
financial  position of Buyer and its subsidiaries as they believe  necessary and
have been given the  opportunity  to ask  questions of and receive  answers from
Buyer  and  its  subsidiaries  and  their  officers  concerning  Buyer  and  its
subsidiaries.   Without   limiting  the   foregoing,   Seller  and   Shareholder
specifically  acknowledge the receipt of Buyer's Form 10-K Report for the fiscal
year ended September 30, 1996,  Buyer's Form 10-Q for the nine months ended June
30, 1996,  Buyer's  Proxy  Statement  dated July 29,  1996,  Buyer's 1996 Annual
Report  to   Shareholders,   and  Buyer's   Prospectus   dated  May  29,   1996.
Notwithstanding the foregoing, Seller shall have the right to transfer a portion
of the  Shares to Joe  Mattes,  David  Furr,  and Donald  Hawk,  each of whom is
familiar  with  the  transactions  contemplated  hereby  and  each of whom is an
"accredited  investor"  under  applicable  rules of the  Securities and Exchange
Commission.

                           (t) Accuracy of  Statements.  Neither this  Agreement
nor any statement,  list, certificate,  or other information furnished by Seller
to  Buyer  in  connection  with  this  Agreement  or  any  of  the  transactions
contemplated  hereby contains an untrue statement of a material fact or omits to
state a material  fact  necessary  to make the  statements  contained  herein or
therein, in light of circumstances in which they are made, not misleading.

                  3.2   Representations  and  Warranties  of  Buyer.  Except  as
otherwise set forth in the Buyer  Disclosure  Schedule  heretofore  delivered by
Buyer to Seller,  and except as disclosed in any  document  heretofore  filed by
Buyer with the Securities and Exchange Commission ("SEC"),  Buyer represents and
warrants to Seller as follows:

                           (a)   Due   Incorporation,    Good   Standing,    and
Qualification.  Buyer  and  each  of  its  subsidiaries  are  corporations  duly
organized,  validly  existing,  and in good  standing  under  the  laws of their
jurisdictions of incorporation with all requisite  corporate power and authority
to own,  operate,  and lease their assets and  properties  and to carry on their
business as now being  conducted.  Neither Buyer nor any of its  subsidiaries is
subject to any material disability by reason of the failure to be duly qualified
as a  foreign  corporation  for the  transaction  of  business  or to be in good
standing  under the laws of any  jurisdiction.  As used in this  Agreement  with
reference to Buyer, the term "subsidiaries" shall include all direct or indirect
subsidiaries of Buyer including Designated Subsidiary.

                           (b)  Corporate   Authority.   Buyer  and   Designated
Subsidiary  have the corporate  power and authority to enter into this Agreement
and carry out the transactions contemplated hereby. The Boards
                                        5
<PAGE>
of  Directors  of Buyer  and  Designated  Subsidiary  have duly  authorized  the
execution,  delivery,  and  performance of this  Agreement.  No other  corporate
proceedings on the part of Buyer or Designated  Subsidiary,  including a meeting
of Buyer's  shareholders,  are necessary to authorize the execution and delivery
by Buyer of this Agreement or the consummation by Buyer or Designated Subsidiary
of the transactions  contemplated  hereby. This Agreement has been duly executed
and delivered  by, and  constitutes a legal,  valid,  and binding  agreement of,
Buyer and Designated Subsidiary, enforceable against them in accordance with its
terms,   except  that  (i)  such  enforcement  may  be  subject  to  bankruptcy,
insolvency,  reorganization,  moratorium, or other similar laws now or hereafter
in effect  relating  to  creditors'  rights,  and (ii) the  remedy  of  specific
performance and injunctive and other forms of equitable relief may be subject to
equitable  defenses  and to  the  discretion  of  the  court  before  which  any
proceeding therefore may be brought.

                           (c) Capital Stock.  As of the date hereof,  Buyer has
authorized  capital stock consisting of 25,000,000  shares of Common Stock, $.01
par value, of which 12,669,769 shares are issued and outstanding,  and 5,000,000
shares of  Preferred  Stock,  no par  value,  of which no shares  are issued and
outstanding.  As of such  date,  1,044,553  shares of Buyer  Common  Stock  were
reserved  for  issuance  upon the  exercise  of  outstanding  stock  options and
warrants. All of the issued and outstanding shares of capital stock of Buyer and
each of its subsidiaries  have been validly  authorized and issued and are fully
paid and nonassessable.

                           (d) Options,  Warrants, and Rights. Neither Buyer nor
any of its subsidiaries has outstanding any options,  warrants,  or other rights
to purchase, or securities or other obligations convertible into or exchangeable
for, or contracts,  commitments,  agreements,  arrangements or understandings to
issue, any shares of their capital stock or other  securities,  other than those
referred to in Section 3.2(c).

                           (e) Subsidiaries.  The outstanding  shares of capital
stock of the subsidiaries of Buyer owned by Buyer or any of its subsidiaries are
owned free and clear of all claims, liens, charges, and encumbrances. Buyer does
not own, directly or indirectly, any capital stock or other equity securities of
any corporation or have any direct or indirect  equity or ownership  interest in
any corporation or other business.

                           (f) Financial  Statements.  The Consolidated  Balance
Sheets of Buyer and its  subsidiaries as of September 30, 1994 and September 30,
1995 and the Consolidated Statements of Operations,  the Consolidated Statements
of Shareholders' Equity, and the Consolidated  Statements of Cash Flows of Buyer
and its  subsidiaries  for the three years ended  September  30,  1995,  and all
related  schedules and notes to the  foregoing,  have been reported on by Arthur
Andersen LLP, independent public accountants, and the Consolidated Balance Sheet
of Buyer and its subsidiaries as of June 30, 1996 and the Consolidated Statement
of Operations,  the  Consolidated  Statement of  Shareholders'  Equity,  and the
Consolidated  Statement of Cash Flows of Buyer and its subsidiaries for the nine
months ended June 30, 1996 have been prepared by the Company without audit.  All
of the foregoing  financial  statements  have been  prepared in accordance  with
generally  accepted  accounting  principles,  which were applied on a consistent
basis  (except as  described  therein),  are correct and  complete,  and present
fairly, in all material respects, the financial position, results of operations,
and  changes of  financial  position of Buyer and its  subsidiaries  as of their
respective  dates and for the periods  indicated.  Neither  Buyer nor any of its
subsidiaries has any material liabilities or obligations of a type that would be
included in a balance  sheet  prepared in  accordance  with  generally  accepted
accounting  principles,  whether related to tax or non-tax  matters,  accrued or
contingent, due or not yet due, liquidated or unliquidated or otherwise,  except
as and to the extent disclosed or reflected in the Consolidated Balance Sheet of
Buyer and its subsidiaries as of June 30, 1996, or incurred since June 30, 1996,
in the ordinary course of business or as contemplated by this Agreement.

                           (g) No Material  Change.  Since June 30, 1996,  there
has not been and there is not threatened (i) any material  adverse change in the
business, assets, properties, financial condition, or operating results of Buyer
or its  subsidiaries  taken as a whole,  (ii) any loss or damage (whether or not
covered  by  insurance)  to any of the  assets  or  properties  of  Buyer or its
subsidiaries, which materially affects or impairs their ability to conduct their
business,  or (iii) any mortgage or pledge of any material  amount of the assets
or properties of Buyer or any of its subsidiaries,  or any indebtedness incurred
by Buyer or any of its subsidiaries,  other than  indebtedness,  not material in
the aggregate, incurred in the ordinary course of business.
                                        6
<PAGE>
                           (h) Title to  Assets  and  Properties.  Buyer and its
subsidiaries  have good and marketable title to all of their respective real and
personal assets and properties, including all assets and properties reflected in
the  Consolidated  Balance  Sheet of Buyer and its  subsidiaries  as of June 30,
1996,  or acquired  subsequent  to June 30, 1996,  except  assets or  properties
disposed of  subsequent  to that date in the ordinary  course of business.  Such
assets and  properties  are subject to no  mortgage,  indenture,  pledge,  lien,
claim,  encumbrance,  charge,  security  interest,  or title  retention or other
security  arrangement,  except for liens for the payment of federal,  state, and
other  taxes,  the  payment  of which  is  neither  delinquent  nor  subject  to
penalties, and except for other liens and encumbrances incidental to the conduct
of the business of Buyer and its  subsidiaries  or the ownership of their assets
or properties, which were not incurred in connection with the borrowing of money
or the  obtaining  of  advances,  and which do not in the  aggregate  materially
detract from the value of the assets or properties of Buyer and its subsidiaries
taken as a whole or materially  impair the use thereof in the operation of their
respective  businesses,  except in each case as  disclosed  in the  Consolidated
Balance Sheet as of June 30, 1996. All leases  pursuant to which Buyer or any of
its subsidiaries  lease any substantial  amount of real or personal property are
valid and effective in accordance with their respective terms. Buyer and each of
its  subsidiaries  own or have  the  right  to use  all  assets  and  properties
necessary to conduct their business as currently conducted.

                           (i)   Litigation.   There  are  no  actions,   suits,
proceedings,  or  other  litigation  pending  or,  to the  knowledge  of  Buyer,
threatened  against Buyer or any of its  subsidiaries,  at law or in equity,  or
before or by any federal, state,  municipal,  or other governmental  department,
commission,  board,  bureau,  agency,  or  instrumentality  that,  if determined
adversely to Buyer or its subsidiaries,  would  individually or in the aggregate
have a material adverse effect on the business,  assets,  properties,  operating
results,  prospects,  or  condition,  financial or  otherwise,  of Buyer and its
subsidiaries taken as a whole.

                           (j) Rights and Licenses. Neither Buyer nor any of its
subsidiaries is subject to any material disability or liability by reason of its
failure to possess any trademark, trademark right, trade name, trade name right,
or license.

                           (k) No Violation.  The execution and delivery of this
Agreement and the consummation of the transactions  contemplated hereby will not
violate  or  result  in a  breach  by Buyer or any of its  subsidiaries  of,  or
constitute a default under,  or conflict with, or cause any  acceleration of any
obligation  with respect to, (i) any  provision or  restriction  of any charter,
bylaw, loan, indenture, or mortgage of Buyer or any of its subsidiaries, or (ii)
any provision or restriction of any lien, lease agreement, contract, instrument,
order,  judgment,   award,  decree,   ordinance,  or  regulation  or  any  other
restriction  of any kind or character to which any assets or properties of Buyer
or  any  of  its  subsidiaries  is  subject  or by  which  Buyer  or  any of its
subsidiaries is bound.

                           (l) Taxes.  Buyer has duly filed in correct  form all
Tax Returns relating to the activities of Buyer and its subsidiaries required or
due to be  filed  (with  regard  to  applicable  extensions)  on or prior to the
Closing  Date.  All such Tax Returns are  accurate  and complete in all material
respects, and Buyer has paid or made provision for the payment of all Taxes that
have been incurred or are due or claimed to be due from it by federal, state, or
local taxing  authorities  for all periods ending on or before the Closing Date,
other than Taxes or other charges that are not delinquent or are being contested
in good faith and have not been finally  determined  and have been  disclosed to
Seller.  The amounts set up as reserves  for Taxes on the books of Buyer and its
subsidiaries are sufficient in the aggregate for the payment of all unpaid Taxes
(including any interest or penalties thereon), whether or not disputed, accrued,
or  applicable.  No  claims  for taxes or  assessments  are  being  asserted  or
threatened  against  Buyer  or any of its  subsidiaries.  For  purposes  of this
Agreement,  the term "Taxes" shall mean all taxes,  charges,  fees,  levies,  or
other  assessments,  including,  without  limitation,  income,  gross  receipts,
excise,  property,  sales,  transfer,  license,  payroll,  and franchise  taxes,
imposed  by the United  States,  or any state,  local or foreign  government  or
subdivision  or  agency  thereof  and  any  interest,   penalties  or  additions
attributable  thereto, and the term "Tax Return" shall mean any report,  return,
or other  information  required to be supplied to a taxing authority or required
by a taxing authority to be supplied to any other person.

                           (m) Accounts  Receivable.  The accounts receivable of
Buyer  and its  subsidiaries  have  been  acquired  in the  ordinary  course  of
business,  are valid and enforceable,  and are fully collectible,  subject to no
known defenses,  setoffs, or counterclaims,  except to the extent of the reserve
reflected  in the books of Buyer and its  subsidiaries  or in such other  amount
that is not material in the aggregate.
                                        7
<PAGE>
                           (n)   Contracts.   Neither   Buyer  nor  any  of  its
subsidiaries  is a party  to (i) any plan or  contract  providing  for  bonuses,
pensions, options, stock purchases, deferred compensation,  retirement payments,
or profit sharing, (ii) any collective bargaining or other contract or agreement
with any labor union, (iii) any lease,  installment purchase agreement, or other
contract  with respect to any real or personal  property  used or proposed to be
used in its operations excepting,  in each case, items included within aggregate
amounts  disclosed or reflected in the  Consolidated  Balance Sheet of Buyer and
its  subsidiaries  as of June 30, 1996,  (iv) any employment  agreement or other
similar  arrangement  not  terminable by it upon 30 days or less notice  without
penalty to it, (v) any contract or agreement for the purchase of any  commodity,
material,  fixed asset, or equipment in excess of $100,000, (vi) any contract or
agreement  creating an  obligation  of $100,000 or more,  (vii) any  contract or
agreement  that by its terms does not terminate or is not  terminable by it upon
30 days or less  notice  without  penalty  to it,  (viii)  any  loan  agreement,
indenture,  promissory note, conditional sales agreement,  or other similar type
of arrangement,  (ix) any material license  agreement,  or (x) any contract that
may result in a material  loss or  obligation  to it.  All  material  contracts,
agreements,  and other arrangements to which Buyer or any of its subsidiaries is
a party are valid and  enforceable in accordance  with their terms;  Buyer,  its
subsidiaries,  and all other parties to each of the foregoing have performed all
obligations  required to be performed  to date;  neither  Buyer,  nor any of its
subsidiaries,  nor any such other  party is in  default or in arrears  under the
terms of any of the  foregoing;  and no  condition  exists or event has occurred
that,  with the giving of notice or lapse of time or both,  would  constitute  a
default under any of them.

                           (o)  Compliance  with  Law  and  Other   Regulations.
Neither Buyer nor any of its  subsidiaries  is subject to or has been threatened
with any material fine, penalty,  liability,  or disability as the result of its
failure to comply with any requirement of federal,  state, local, or foreign law
or  regulation  or any  requirement  of any  governmental  body or agency having
jurisdiction  over it, the  conduct of its  business,  the use of its assets and
properties, or any premises occupied by it.

                           (p)  Insurance.  Buyer  and each of its  subsidiaries
maintains  in  full  force  and  effect  insurance  coverage  on  their  assets,
properties,  premises,  operations, and personnel in such amounts as Buyer deems
appropriate.

                           (q) Articles,  Bylaws,  and Minute  Books.  Buyer has
heretofore  delivered  to Seller  true and  complete  copies of the  Articles of
Incorporation  and Bylaws of Buyer and  Designated  Subsidiary  as  currently in
effect. The minute books of Buyer and Designated Subsidiary contain complete and
accurate  records of all meetings and other  corporate  actions held or taken by
the  Boards  of  Directors  (or  committees  of the  Boards  of  Directors)  and
shareholders  of Buyer and its  subsidiaries,  as the case may be,  since  their
respective incorporations.

                           (r)   Employees.   Neither   Buyer  nor  any  of  its
subsidiaries has ever maintained or contributed to any "employee  benefit plan,"
as such term is defined in Section 3(3) of ERISA, including, without limitation,
any stock option plan, stock purchase plan, deferred compensation plan, or other
similar employee  benefit plan,  other than Buyer's Stock Option Plans.  Neither
Buyer nor any of its subsidiaries  has ever  contributed to any  "multi-employer
pension plan," as such term is defined in Section 3(37)(A) of ERISA.

                           (s) SEC Reports.  Buyer's report on Form 10-K for the
fiscal  year ended  September  30,  1995 filed with the SEC and all  reports and
proxy statements filed by Buyer thereafter pursuant to Section 13(a) or 14(a) of
the Securities Exchange Act of 1934,  including Buyer's Form 10-Q Report for the
quarter ended June 30, 1996, do not contain a misstatement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the  statements  therein not  misleading  as of the time the document was filed.
Since the filing of such report on Form 10-K, no other report,  proxy statement,
or other  document  has been  required to be filed by Buyer  pursuant to Section
13(a) or 14(a) of the Securities Exchange Act of 1934 that has not been filed.

                           (t) Accuracy of  Statements.  Neither this  Agreement
nor any statement, list, certificate, or other information furnished by Buyer to
Seller in connection with this Agreement or any of the transactions contemplated
hereby  contains  an untrue  statement  of a  material  fact or omits to state a
material fact necessary to make the statements  contained herein or therein,  in
light of the circumstances in which they are made, not misleading.
                                        8
<PAGE>
                           (u) Status of Buyer  Common Stock Being  Issued.  The
shares of Buyer's  Common  Stock issued in partial  payment for the  Transferred
Assets are validly authorized and issued, fully paid, nonassessable,  authorized
for  trading on the Nasdaq  National  Market,  and free of  preemptive  or other
similar  rights,  but  subject to the resale  restrictions  required by Rule 144
promulgated pursuant to the Securities Act of 1933, as amended ("Rule 144").

                  3.3 Survival of  Representations  and Warranties.  Each of the
representations  and warranties  contained in this  Agreement  shall survive the
consummation of the transactions  contemplated by this Agreement irrespective of
any  investigations  or inquiries  made by any party or any  knowledge  that any
party  may  possess,  and  each  party  shall  be  entitled  to rely  upon  such
representations and warranties irrespective of any investigations, inquiries, or
knowledge.

                                    SECTION 4
                               COVENANTS TO SELLER

                  4.1 Covenants of Seller.  Seller further agrees,  unless Buyer
otherwise agrees in writing, subsequent to the Closing Date:

                           (a)  Complete  Liquidation  and  Dissolution.  Seller
shall  completely  liquidate and dissolve as promptly as  practicable  after the
Closing  Date,  and in  connection  therewith,  Seller shall  distribute  to its
shareholders  all of its assets and  properties  (including  the Buyer's  Common
Stock and Buyer's  Promissory  Note issued pursuant to Section 2.1) after paying
outstanding   obligations  and  liabilities  not  being  assumed  by  Designated
Subsidiary and providing  adequate  reserves so that Designated  Subsidiary will
have no  responsibilities  to Seller's creditors except as specifically  assumed
pursuant to Section 1.2.

                           (b) Filing of Tax Returns. As promptly as practicable
after  the  Closing  Date,  Seller  shall  file all  federal,  state,  and local
corporate  and income tax  returns for its last  fiscal  year and  covering  the
period from the end of its last fiscal year to the date of its  liquidation  and
dissolution.

                           (c) Dividends.  Nothing in this Agreement shall limit
the ability or right of Seller to declare or pay  dividends to its  shareholders
subsequent to the Closing Date.

                           (d) Change of Corporate  Name.  Seller shall promptly
change its  corporate  name to a name that does not  include  the words  "Sports
Image."

                  4.2 Further  Assurances.  From time to time,  on and after the
Closing  Date,  as and when  requested by Buyer or  Designated  Subsidiary,  the
proper officers and directors of Seller as of the Closing Date shall, for and on
behalf and in the name of Seller or  otherwise,  execute  and  deliver  all such
deeds, bills of sale, assignments, and other instruments and shall take or cause
to be taken such further or other actions as Buyer or Designated  Subsidiary may
deem  necessary or desirable in order to confirm of record or otherwise to Buyer
or  Designated  Subsidiary  title to and  possession  of all of the  Transferred
Assets and  otherwise  to carry out fully the  provisions  and  purposes of this
Agreement. In addition,  Seller shall give Buyer access to all records of Seller
not  purchased  hereunder,  and Buyer shall give Seller access to all records of
Buyer to the extent relevant to the transactions contemplated hereby.
                                       9
<PAGE>
                                    SECTION 5
                                     GENERAL

                  5.1 Costs and  Indemnity  Against  Finders.  Each party hereto
shall  be  responsible  for  its own  costs  and  expenses  in  negotiating  and
performing  this  Agreement and hereby  indemnifies  and holds the other parties
harmless  against any claim for  finders'  fees based on alleged  retention of a
finder by it.

                  5.2 Controlling Law. This Agreement and all questions relating
to its validity, interpretation,  performance, and enforcement shall be governed
by and  construed  in  accordance  with  the  laws  of  the  state  of  Arizona,
notwithstanding any Arizona or other conflict-of-law provisions to the contrary.

                  5.3  Notices.  All  notices,  requests,   demands,  and  other
communications  required or permitted  under this Agreement  shall be in writing
and shall be deemed to have been duly given,  made and received  when  delivered
against  receipt or when  deposited  in the United  States  mails,  first  class
postage prepaid, addressed as set forth below:

<TABLE>
<S>                                                           <C>
          If to Buyer or Designated Subsidiary:               If to Seller or Shareholder:

          2401 West First Street                              5301 West WT Harris Boulevard
          Tempe, Arizona  85281                               Charlotte, North Carolina  28269
          Attention:  Fred W. Wagenhals                       Attention:  R. Dale Earnhardt

          with a copy given in the manner                     with a copy given in the manner
          prescribed above, to:                               prescribed above, to:

          O'Connor, Cavanagh, Anderson,                       Gray, Layton, Drum, Kersh, Solomon,
            Killingsworth & Beshears, P.A.                      Sigmon & Furr, P.A.
          One East Camelback Road                             516 South New Hope Road
          Phoenix, Arizona  85012                             Gastonia, North Carolina  28053
          Attention:  Robert S. Kant, Esq.                    Attention:  David Furr, Esq.
</TABLE>

          Any party may alter the address to which  communications or copies are
to be sent by giving  notice to such  other  parties  of  change of  address  in
conformity with the provisions of this paragraph for the giving of notice.

          5.4 Binding Nature of Agreement;  No Assignment.  This Agreement shall
be  binding  upon and  inure to the  benefit  of the  parties  hereto  and their
respective  heirs,  successors,  and  assigns,  except that no party may assign,
delegate, or transfer its rights or obligations under this Agreement without the
prior written consent of the other parties hereto.  Any assignment,  delegation,
or transfer made in violation of this Section 5.4 shall be null and void.

          5.5 Entire Agreement. This Agreement contains the entire understanding
among  the  parties  hereto  with  respect  to the  subject  matter  hereof  and
supersedes   all   prior   and   contemporaneous   agreements,   understandings,
inducements,  and  conditions,  express or implied,  oral or written,  except as
herein  contained.  The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms hereof.
This  Agreement  may not be modified or amended  other than by an  agreement  in
writing.

          5.6 Paragraph  Headings.  The paragraph headings in this Agreement are
for  convenience  only; they form no part of this Agreement and shall not affect
its interpretation.

          5.7  Counterparts.  This  Agreement  may be  executed  in two or  more
counterparts,  each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
                                       10
<PAGE>
          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.


                                              ACTION PERFORMANCE COMPANIES, INC.



                                              By:_______________________________
                                                      President


[Corporate Seal]                              By:_______________________________
                                                      Secretary




                                              SII ACQUISITION, INC.



                                              By:_______________________________
                                                      President


[Corporate Seal]                              By:_______________________________
                                                      Secretary




                                              SPORTS IMAGE, INC.



                                              By:_______________________________
                                                       President


[Corporate Seal]                              By:_______________________________
                                                       Secretary




                                              __________________________________
                                              R. Dale Earnhardt


                                              __________________________________
                                              Teresa H. Earnhardt
                                       11
