
                                  EXHIBIT 10.48
                                  -------------

                       ACTION PERFORMANCE COMPANIES, INC.
                             2401 West First Street
                              Tempe, Arizona 85281


                                                                January 16, 1997



Hasbro, Inc.
1027 Newport Avenue
Pawtucket, Rhode Island  02886-1059

Gentlemen:

                  We have entered into a License  Agreement with you. Each of us
contemplated  executing  a  warrant  and  a put  agreement  in  connection  with
executing the License  Agreement.  As a result of various factors,  however,  we
mutually  determined prior to executing the License Agreement that we would sell
to you and you would  purchase  from us shares of our Common  Stock on the terms
set forth  herein in lieu of the warrant and put. The  following  sets forth our
mutual understandings regarding the purchase of shares of our Common Stock.

                  1. Sale of the Shares. We will sell to you, upon the terms and
conditions hereinafter set forth, free and clear of all liens, pledges,  claims,
and encumbrances of every kind,  nature and  description,  and you will purchase
from us,  187,500  shares (the  "Shares")  of common  stock,  par value $.01 per
share, of Action Performance Companies, Inc. (the "Company").

                  2.  Purchase  Price.  You will pay to us the sum of $14.50 for
each Share purchased hereunder,  and we will cause our transfer agent to deliver
to you the certificates representing the Shares.

                  3. Representations, Warranties, and Agreements of the Company.
To induce you to enter into this Agreement,  the Company  represents,  warrants,
and agrees as follows:

                         (a) Status and Authority of the Company. The Company is
a corporation  duly organized,  validly  existing and in good standing under the
laws of the state of Arizona and has the power to own its assets and  properties
and to carry on its business as it is now being conducted.

                         (b) Power of the  Company  to  Execute  Agreement.  The
Company has full power and  authority  to  execute,  deliver,  and perform  this
Agreement, and this Agreement is the legal and binding obligation of Company and
is enforceable against it in accordance with its terms.

                         (c)  Agreement  Not  in  Breach  of  Other   Agreements
Affecting  the  Company.  The  execution  and  delivery of this  Agreement,  the
consummation of the transactions hereby contemplated, and the fulfillment of the
terms  hereof  will not  result in the  breach of any term or  provision  of, or
constitute a default under,  or conflict with, or cause the  acceleration of any
obligation  under, any agreement or other instrument of any description to which
the Company is a part or by which the Company is bound, or any judgment, decree,
order,  or  award  of  any  court,  governmental  body,  or  arbitrator,  or any
applicable laws, rule or regulation.

                         (d) Status of Shares to be  Purchased.  When issued and
paid for, the Shares will be duly and validly authorized and issued,  fully paid
and non-assessable and authorized for trading on the Nasdaq National Market.

                  4. Buyer's  Representations,  Warranties,  and Agreements.  To
induce the Company to enter into this  Agreement,  you represent,  warrant,  and
agree as follows:
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Hasbro, Inc.
January 15, 1997
Page 2


                         (a) Power of the Buyer to Execute  Agreement.  You have
full power to execute,  deliver, and perform this Agreement,  and this Agreement
is  your  legal  and  binding  obligation  and  is  enforceable  against  you in
accordance with its terms.

                         (b) Agreement Not in Breach of Other  Instruments.  The
execution  and  delivery  by you of  this  Agreement,  the  consummation  of the
transactions  contemplated  hereby, and the fulfillment of the terms hereof will
not result in the breach of any term or  provision  of, or  constitute a default
under, or conflict with, or cause the acceleration of any obligation  under, any
agreement or other  instrument of any description to which you are a party or by
which you are bound,  or any  judgment,  decree,  order,  or award of any court,
governmental  body, or  arbitrator,  or any  applicable  law, rule or regulation
binding upon you.

                  5. Further  Representations,  Warranties,  and  Agreements  of
Buyer. You further represent, warrant, and agree as follows:

                         (a)  Ability  to  Bear  Risk;  Business  and  Financial
Knowledge and Experience.  You can bear the economic risk of the purchase of the
Shares,  and you have  sufficient  knowledge  and  experience  in  business  and
financial  matters as to be capable of  evaluating  the merits and risks of your
purchase of the Shares.

                         (b) Knowledge  Respecting the Company.  You (i) know or
have had the  opportunity  to acquire all  information  concerning the business,
affairs, financial condition,  plans, and prospects of the Company that you deem
relevant  to make a fully  informed  decision  respecting  the  purchase  of the
Shares,  (ii) have been encouraged and have had the opportunity to rely upon the
advice of your legal counsel and  accountants and other advisers with respect to
the  purchase  of the  Shares;  and (iii) have had the  opportunity  to ask such
questions  and receive  such  information  and answers  respecting,  among other
things, the business,  affairs, financial condition, plans, and prospects of the
Company and the terms and  conditions of your purchase of the Shares as you have
requested so as to more fully understand your  investment.  Without limiting the
foregoing,  you  acknowledge  that you have been provided with or have access to
the Company's  Annual Report on Form 10-KSB for the fiscal year ended  September
30,  1996,  the  Company's  Proxy  Statement  dated  January 29,  1996,  and the
Company's 1995 Annual Report to Shareholders.

                         (c) No  Distribution.  You are acquiring the Shares for
your own account without a view to public  distribution or resale,  and you have
no  contract,  undertaking,  agreement,  or  arrangement  to  transfer,  sell or
otherwise  dispose of any  Shares or any  interest  therein to any other  person
except pursuant to the registration  statement referred to in Section 6 below or
any other applicable exemption under the Securities Act of 1933, as amended (the
"1933 Act").

                         (d) Shares to be Restricted.  You  understand  that the
Shares will be "restricted  securities" within the meaning of Rule 144 under the
1933 Act and that the  certificates  evidencing the Shares will contain a legend
to this effect.

                         (e) No  Registration.  You  understand  that the Shares
have not been  registered  under the 1933 Act, the Arizona  Securities  Act (the
"Arizona  Act"), or the securities  laws of any other  jurisdiction  and must be
held indefinitely  without any transfer,  sale, or other disposition  unless the
Shares are subsequently  registered under the 1933 Act, the Arizona Act, and the
securities  laws of any other  applicable  jurisdictions  or, in the  opinion of
counsel for the Company, registration is not required under such acts or laws as
the result of an available exemption.

                  6. Other Agreements.

                         (a) Registration of the Shares.  Promptly following the
execution of this  Agreement,  we will file and use our best efforts to cause to
become effective a registration statement under the 1933 Act
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Hasbro, Inc.
January 15, 1997
Page 3


covering  the  Shares  for  resale  under  the  1933  and all  applicable  state
securities  laws.  We will  use our best  efforts  to  cause  such  registration
statement to remain  effective for three years after the date of this Agreement.
In addition, we agree to

                                    (i)   Furnish   to  you   copies   of   such
registration  statement  and  any  amendments  or  supplements  thereto  and any
prospectus  forming a part  thereof  prior to filing,  which  documents  will be
subject to the review of your counsel (but not approval of such counsel,  except
with respect to any  statement  in the  registration  statement  that relates to
you).

                                    (ii)  Notify  you  promptly  after  we  have
received  notice  of the  time  when  such  registration  statement  has  become
effective  or  any  supplement  to  any  prospectus   forming  a  part  of  such
registration statement has been filed.

                                    (iii)  Prepare and file with the  Securities
and Exchange  Commission (the "SEC"),  and promptly notify you of the filing of,
such  amendments  and  supplements  to  such  registration   statement  and  the
prospectus  used  in  connection  with  such  registration  statement  as may be
necessary  to comply  with the  provisions  of the 1933 Act with  respect to the
disposition of the Shares covered by such registration statement.

                                    (iv)  Advise  you  promptly  after  we  have
received notice or obtained  knowledge thereof of the issuance of any stop order
by the SEC suspending the  effectiveness of any such  registration  statement or
the  initiation or  threatening  of any proceeding for that purpose and promptly
use our best  efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued.

                                    (v) Furnish to you such numbers of copies of
such  registration  statement,  each amendment and supplement  thereto,  and the
prospectus,   including  a  preliminary  prospectus,   in  conformity  with  the
requirements  of the 1933 Act, and such other  documents  as you may  reasonably
request in order to facilitate the disposition of the Shares.

                                    (vi) Prepare and promptly file with the SEC,
and promptly  notify you of the happening of any event  requiring the filing and
the filing of, any  amendment or supplement  to such  registration  statement or
prospectus as may be necessary to correct any statements or omissions if, at the
time when a prospectus  relating to the Shares is required to be delivered under
the 1933 Act, any event has occurred as the result of which any such  prospectus
must be  amended  in  order  that it does not make  any  untrue  statement  of a
material fact or omit to state a material fact  necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading.

                                    (vii) In case you are  required to deliver a
prospectus  at a time when the  prospectus  then in effect may no longer be used
under the 1933 Act,  prepare  promptly upon request such amendment or amendments
to such registration statement and such prospectus as may be necessary to permit
compliance with the requirements of the 1933 Act.

                                    (viii) If any of our similar  securities are
then listed on any securities  exchange or the NASDAQ National  Market,  we will
cause the Shares  covered by such  registration  statement  to be listed on such
exchange or the NASDAQ National Market.

                         (b)  Buyer's  Obligations.  It  shall  be  a  condition
precedent to our  obligations to take any action  pursuant to Subsection 6(a) of
this Agreement that you shall:

                                    (i) Furnish to us such information regarding
yourself,  the Shares,  the intended method of sale or other disposition of such
Shares,  and such other  information as may reasonably be required to effect the
registration of the Shares.
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Hasbro, Inc.
January 15, 1997
Page 4



                                    (ii)   Notify   us,   at  any  time  when  a
prospectus relating to Shares covered by a registration statement is required to
be delivered  under the 1933 Act, of the  happening of any event with respect to
you as a result of which the prospectus included in such registration statement,
as then in effect,  includes an untrue  statement of a material fact or omits to
state a material  fact  required to be stated  therein or  necessary to make the
statements  therein  not  misleading  in the  light  of the  circumstances  then
existing.

                         (c) Expense of Registration.  We shall bear and pay all
expenses  incurred in connection with  registration,  filings or  qualifications
pursuant to Section  6(a),  including  (without  limitation)  all  registration,
filing,  and  qualification  fees,  Blue Sky fees and  expenses,  printers'  and
accounting  fees,  costs of listing on any exchange or the NASDAQ Stock  Market,
costs  of  furnishing  such  copies  of  each  preliminary   prospectus,   final
prospectus,  and  amendments  thereto as you  reasonably  request,  and fees and
disbursements of our counsel.

                         (d)  Indemnification.  In  the  event  any  Shares  are
included in a registration statement under this Agreement:

                                    (i) We will indemnify and hold harmless you,
your officers and directors,  any  underwriter  (as defined in the 1933 Act) for
you and each person,  if any, who  controls you or such  underwriter  within the
meaning of the 1933 Act or the Securities  Exchange Act of 1934, as amended (the
"1934 Act"),  against any losses,  claims,  damages,  or  liabilities  (joint or
several) to which such person or persons may become  subject under the 1933 Act,
the 1934 Act or any  state  securities  law,  insofar  as such  losses,  claims,
damages,  or  liabilities  (or actions in respect  thereof)  arise out of or are
based  upon  any  of  the   following   statements,   omissions  or   violations
(collectively,  a  "Violation"):  (y) any untrue  statement  or  alleged  untrue
statement  of  a  material  fact   contained  in  the   registration   statement
contemplated  hereby,  including any preliminary  prospectus or final prospectus
contained therein or any amendments or supplements  thereto, or (z) the omission
or alleged  omission  to state  therein a material  fact  required  to be stated
therein or necessary to make the statements therein not misleading,  and we will
reimburse  you and each such officer or  director,  underwriter  or  controlling
person for any legal or other  expenses  reasonably  incurred  by such person or
persons in connection  with  investigating  or defending  any such loss,  claim,
damage,  liability, or action;  provided,  however, that the indemnity agreement
contained in this Section  6(d)(i) shall not apply to amounts paid in settlement
of any such loss,  claim,  damage,  liability,  or action if such  settlement is
effected  without our consent (which shall not be  unreasonably  withheld),  nor
shall we be liable in any such loss, claim, damage,  liability, or action to the
extent  that it arises out of or is based upon (A) a  violation  that  occurs in
reliance upon and in conformity with written information furnished expressly for
use  in  connection  with  such  registration  by  you or  such  underwriter  or
controlling  person,  as the  case  may be,  or (B) the  failure  of you or such
underwriter, or controlling person, as the case may be, to deliver a copy of the
registration  statement or the  prospectus,  or any  amendments  or  supplements
thereto,  after we have furnished such person with a sufficient number of copies
of the same.

                                    (ii) You will  indemnify  and hold  harmless
us, each of our officers and directors, and each person, if any, who controls us
within the meaning of the 1933 Act, any underwriter and any other holder selling
securities in such registration statement or any of its directors or officers or
any person who controls such holder,  against any losses,  claims,  damages,  or
liabilities  (joint  or  several)  to  which  we or an such  officer,  director,
controlling  person,  or underwriter or controlling  person may become  subject,
under the 1933 Act, the 1934 Act or any state  securities  law,  insofar as such
losses,  claims,  damages,  or liabilities (or actions in respect thereto) arise
out of or are based upon and in conformity with written information furnished by
you expressly for use in connection  with the  registration  statement;  and you
will reimburse any legal or other expenses reasonably incurred by us or any such
officer, director,  controlling person, underwriter or controlling person, other
holder, officer, director or controlling person in connection with investigating
or defending  any such loss,  claim,  damage,  liability,  or action;  provided,
however,  that the indemnity  agreement contained in this Section 6(d)(ii) shall
not  apply to  amounts  paid in  settlement  of any such  loss,  claim,  damage,
liability or action if such settlement is effected  without your consent (not to
be  unreasonable  withheld).  Notwithstanding  anything to the  contrary  herein
contained,
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Hasbro, Inc.
January 15, 1997
Page 5


your indemnity obligation,  shall be limited to the net proceeds received by you
from the offering out of which the indemnity obligation arises.

                                    (iii)   Promptly   after   receipt   by   an
indemnified  party under this Section 6(d) of notice of the  commencement of any
action  (including any governmental  action),  such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section  6(d),  deliver  to the  indemnifying  party  a  written  notice  of the
commencement  thereof  and the  indemnifying  party  shall  have  the  right  to
participate in, and, to the extent the  indemnifying  party so desires,  jointly
with any other indemnifying party similarly notified, assume the defense thereof
with counsel mutually  satisfactory to the parties;  provided,  however, that an
indemnified party shall have the right to retain its own counsel,  with the fees
and expenses to be paid by the indemnified party. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such  indemnifying  party of any  liability to
the indemnified  party under this Section 6(d), unless such failure actually and
materially  prejudices  the  ability  of the  indemnifying  party to defend  the
action.

                                    (iv) The  indemnification  provided  by this
Section 6(d) shall be a continuing  right to  indemnification  and shall survive
the  registration and sales of any of the Shares hereunder and the expiration or
termination of this Agreement.

                         (e) Resale of the  Shares.  For a period of four months
after the date of this Agreement,  which we believe will be a sufficient  period
to permit the registration statement referred to above to become effective,  you
will not resell,  transfer, or otherwise dispose of any of the Shares. After the
end of the  four-month  period,  you will  give us a right of first  refusal  to
repurchase  the Shares  prior to any sale by you with the  purchase  price to be
equal to the  purchase  price  negotiated  by you in the  event of a  negotiated
transaction  or the then  market  price  thereof  in the  event of a sale in the
public  securities  market.  The right of first refusal shall be available for a
period of two business days (ten  business  days if Section 6(f) is  applicable)
after notice by you of your desire to resell the Shares. Subject to the previous
sentence,  we will  endeavor in good faith to respond as soon as possible to any
notice from you with  either a waiver or exercise of our right of first  refusal
hereunder.

                         (f) Price  Protection.  We will  reimburse  you for any
loss that you may incur as a result of the sale by you of any of the Shares at a
price less that  $14.50 per Share,  plus  interest  at a rate equal to the prime
rate of Wells  Fargo  Bank  N.A.  plus one  percent  from time to time in effect
during the  period  from the date of payment  for the  Shares  through  the sale
thereof during the one-year  period  commencing on the later of four months from
the date of this Agreement and the effective date of the registration statement.
To minimize any  potential  loss,  however,  you agree to resell the Shares only
through a broker-dealer  selected by us and reasonably  acceptable to you to the
extent you will request us to protect you against any such loss.

                  7. Further  Assurances.  You and the Company shall execute and
deliver all such other  instruments  and take all such other action as either of
us may  reasonably  request  from  time to  time  in  order  to  effectuate  the
transactions provided for herein.

                  8. Miscellaneous.

                         (a) Binding Nature of Agreement;  No  Assignment.  This
Agreement  shall be binding upon and inure to the benefit of you and the Company
and the respective heirs,  personal  representatives,  successors and assigns of
you and the  Company,  except  that  neither  you nor the  Company may assign or
transfer any rights or obligations  under this  Agreement  without prior written
consent of the other.

                         (b)  Entire  Agreement.  This  Agreement  contains  the
entire  understanding  between you and the Company  with  respect to the subject
matter hereof and supersedes all prior and contemporaneous
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Hasbro, Inc.
January 15, 1997
Page 6


agreements and  understandings,  inducements or conditions,  express or implied,
oral or written, except as herein contained.

                         (c) 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.

                  If the foregoing is  satisfactory  and you wish to acquire the
Shares  subject  to the terms and  conditions  set  forth  herein,  would you so
indicate by signing and returning a signed copy of this letter to us.

                                         Very truly yours,

                                         ACTION PERFORMANCE COMPANIES, INC.



                                         By:___________________________________


ACCEPTED AND APPROVED:

HASBRO, INC.


By:_______________________________
